* Robin Bromby * From: The Australian * June 14, 2011 1:49PM
THE forces driving the global growth of nuclear energy are the same now as they were before the Japanese disaster.
That was the word sent out recently to shareholders by Toro Energy (TOE). The letter continued: ?Energy demand and the desire for internal energy security from a low-carbon, base-load supply will mean continued growth in the industry.?
Your correspondent last week asked one of Australia?s uranium veterans about the outlook. This man was working on uranium projects here in the 1970s onwards and, while he?s moved on to other ventures, he takes a close interest in the uranium sector. And he visits China regularly.
On one such recent visit he asked a senior official whether China would maintain its planned nuclear reactor construction program. Not only did the official confirm this, but did so in a way that left our man with the impression that Beijing has even more ambitious nuclear energy plans up its sleeve. As we have pointed out, China has no alternative; it desperately needs far more base-load power and, while ambitious, its wind energy building program will still be at the mercy of the breezes.
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And it looks as if we might actually soon see a uranium IPO -- in fact, two of them.
Excelsior Gold (EXG) announced this morning it was divesting its Northern Territory uranium interests. Excelsior first listed in 2007 as a uranium explorer called Atom Energy. This was at the time of the uranium frenzy when more than 250 listed companies were either uranium plays or tried to add to their appeal by diversifying into the search for yellowcake.
The company now has its Kalgoorlie North gold project and has passed on its uranium ground to two unlisted companies, Parker Resources and Freshwater Minerals, which plan to list on the ASX by the end of September. If those IPOs get away, then the uranium story is back on track.
Which it should be. Despite the Fukushima crisis, the spot price for uranium is still more than 30 per cent higher than during its 2010 lows.
Meanwhile, Toro announced today the former Woodside Petroleum and Alcoa executive Vanessa Guthrie would manage the development of the company?s Wiluna uranium project which is due to begin production in 2013. She will be responsible for shepherding the $270 million project through final state and federal approvals and building and commissioning the mine.
Also today, Uranex (UNX) reported what it calls further high grade uranium intersections from its Mkuju project in Tanzania. The latest drill results included 85m at 0.047 per cent U3O8, 42m at 0.06 per cent and 9m at 0.089 per cent. A second aircore rig starts work this week, with the diamond drilling rig due at Mkuju next month.
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WHILE there was no argument over our recent report on the geothermal sector -- that it was kneecapped by the Rudd government decision to abandon the emissions trading scheme and that the new carbon tax will be set too low to make geothermal competitive -- two companies make the point that their projects have a better than average chance.
Petratherm (PTR) has its Paralana flagship project in South Australia along with others in Spain and China. MD Terry Kallis said his company stands out from its peers because it targets shallow ?hot spots?, has a lower risk and lower cost heat engineering technology and has received substantial federal grants to enable it progressing to commercial demonstration stage. He says Paralana has successfully drilled a 4km-deep well at Paralana and has a portfolio of projects covering the spectrum of geothermal technologies - including district heating (Madrid), conventional volcanic geothermal (Canary Islands), hot sedimentary aquifer (East Gippsland) as well as Paralana.
Panax Geothermal (PAX) has diversified into Indonesia and is getting close to drilling at its 45 per cent-owned Sokoria project on Flores Island. As the company points out, the economics between Australia and Indonesia are quite different. A well in Australia typically costs between $US12m and $US14 but in Indonesia it?s about $US5m. The key is depth -- at least 4000m here or far more against 2000m in Indonesia.
The writer implies no investment recommendation and this report contains material that is speculative in nature. Investors should seek professional investment advice.
ACB Price at posting:
19.0¢ Sentiment: Hold Disclosure: Held
