article in the australia today

Will uranium burn investors again?

TALK about an atomic nucleus splitting and producing vast numbers of electrons of energy.

That seems to be what is happening in the uranium sector. Just take A-Cap Resources - no news this week, but here was a stock that closed at 40c on Tuesday and then 52c on Wednesday.

No news, either, from Atom Energy but that did not stop its shares climbing 28 per cent on Tuesday, then another 25 per cent Wednesday. This is a company that has very greenfields exploration in the Northern Territory and there is nothing going on with the project in Utah. This company has also just raised $485,107.

There’s been nothing lately from United Uranium but that stock jumped 15 per cent on Monday.

It is interesting to note that there has not been the same market action when it comes to companies actually making announcements.

Thundelarra Exploration got a very modest bump after its announcement that it had secured the right to earn 70 per cent of an additional four tenements in the Ngalia Basin in the Northern Territory in a deal with Alara Resources, one of the more low profile uranium hunters.

Thundelarra now has 3300 square kilometres of prospective uranium ground under its control. More importantly, this company’s tenements are as close as 5km to the high grade Bigrlyi deposit being advanced by Energy Metals and Paladin Energy.

Nor was there much market traction for NGM Resources with the news that Paladin had increased its shareholding in the company (and its uranium in Niger) to 16.7 per cent.

Shares in Adelaide Resources actually fell on news that this company had begun drilling at its Cleve uranium target on South Australia’s Eyre Peninsula.

What does all this tell us?

Unfortunately, it suggests that uranium is once again in hype, that it is a return to buy on the rumour, sell on the news.

While the long term outlook for uranium is good, there has been nothing of substance to light such a big fire under this sector, or to ginger up prices in early stage explorers.

Are investors going to get burned a second time?