rampant uranium price to continue into 2008

Rampant uranium price to continue into 2008

Wednesday, 20 December 2006
Paul Garvey

THE current boom in uranium prices is nowhere near slowing, says Resource Capital Research, with the group forecasting a rise in the price of uranium to $US90 per pound by mid-2007 and $115/lb by late 2008.

The price of uranium this week cracked through the $70/lb mark for the first time, with Ux Consulting putting the price of uranium oxide at $72.50.

However, RCR says that despite a 64% rise in the price of uranium over the past six months, uranium can add another 37% by the middle of next year.

RCR's bullish outlook for uranium is driven by the impact of delays at Cameco's developing Cigar Lake underground project in Canada, which earlier this year was affected by severe flooding.

In addition, the number of planned and proposed nuclear power plants has also continued to grow, with RCR saying an additional 70 reactors had been added since May to the 153 facilities already in the pipeline. There are currently 442 reactors in operation worldwide.

In RCR's latest Uranium Sector Review, the researchers said its selection of 65 Australian uranium junior stocks had outperformed its selection of 92 Canadian uranium explorers, with the market valuation of the Australian basket improving by 186% compared to Canada's 143%.

RCR's research also identified the big spenders among Australia's uranium explorers, with Equinox Minerals, Paladin Resources and Energy Resources Australia filling the first three positions, respectively.

Among the junior stocks, PepinNini Minerals has the biggest uranium exploration budget for 2007, ahead of Wildhorse Energy, Southern Gold and Energy Metals.