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Uranium price hits four-year low

Nick Sas, The West Australian June 7, 2013, 7:29 am

A new wave of nervousness swept through WA's already under-pressure uranium explorers yesterday after the uranium spot price hit a four-year low.

The price fell below the $40 a pound threshold for the first time since April 2009, closing at $39.87 a pound.

Despite industry assurances of a price rebound over the past 12 months, uranium has failed to get any traction.

The price has not pushed through the $45/lb mark since December 14.

The lethargic price places further pressure on local uranium explorers such as Toro Energy, which is looking for a strategic partner to help fund its $269 million Wiluna project.

If funding is found, Wiluna will become WA's first uranium mine.

A hearty increase in the spot price is needed to force WA's fledgling uranium sector into first gear, with Canadian giant Cameco indicating a price of more than $70/lb is needed before it can give the green light to its massive Yeelirrie or Kintyre deposits.

Some analysts have predicted the much-awaited turn will come this time next year.

Perth-based producer Paladin Energy is slightly insulated from spot price fluctuations through its supply contracts with energy companies. It reported an average realised price of $55/lb for the March quarter.

However, its share price has still suffered under the weight of the record lows for yellowcake. Paladin shares hit an eight-year low of 70.5¢ in April, before recovering slightly over the past six weeks.
Paladin closed down 0.5¢ at 99¢ yesterday.