Italian bank woes suggest the Greek disease is spreading through Europe.
PURE SPECULATION: Robin Bromby From: The Australian. June 27, 2011
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Uranium oversold
FORTUNATELY, even in tough times, people like to be able to switch on lights, watch TV and run their aircon.
And in energy, one sector seems to have been oversold: uranium. Certainly the spot price of uranium continues to weaken.
There was talk during the week that BHP Billiton (BHP) had gone off the idea of developing its Yeelirrie project in Western Australia (it denied this), while also in that state Canada's Mega Uranium has postponed the next stage of its Lake Maitland uranium project. Yet a study by Citigroup of the top 400 mining projects around the world shows only 11 possible new uranium mine developments (other than Olympic Dam's expansion) and the analysts concluded there could be a looming supply crunch.
The uranium ranks keep getting thinner, as uranium companies diversify into something they consider more appealing to punters. Some have rebadged -- Atomic Resources became Intra Energy Corp (IEC) -- or gone in for corporate plastic surgery: Alara Uranium emerging as a less forbidding Alara Resources (AUQ).
But others are plugging on. Resource Star (RSL) and Globe Metal & Mining (GBE) last week increased by 30 per cent their inferred resource at Livingstonia in Malawi to 2720 contained tonnes of uranium, while Forte Energy (FTE) has doubled its resources in Mauritania to 6760 tonnes.
One of the more persistent uranium plays is Thundelarra Exploration (THX), which has just picked up the other 30 per cent of the Allamber project from Excelsior Gold (EXG), which used to be Atom Energy. About 70 per cent of all spending at THX is on uranium, the company believing the nuclear energy story is as strong as ever (as do we). Fortunately, it doesn't have to worry about raising cash with its present strong bank balance.
Allamber is in the Pine Creek area and the aim there is to find a small but high-grade resource worth developing.
THX's other main hope is Ngalia, 300km from Alice Springs. It's hard work with lots of sand cover and drilling has been difficult due to underground water, and the company might need a partner with deep pockets.
In the meantime, THX is positioning itself to take advantage of what it sees as the inevitable restoration of confidence in uranium.
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