Uranium: Sky-High Prices Equals Sky-High Opportunities?
By Sara Nunnally, Market Report
One would think that with uranium still topping $133 per pound, uranium producers would be scorching hot.
Well, not so much… In the past three months, some well-known uranium mining companies have been in the slumps. Take one of our favorites, Paladin Resources, Inc. (PDN:ASX). It’s down about 18% since mid-April. Forsys Metals Corp. (FSY:TSX) is down nearly 30%.
And surprisingly, it’s Cameco Corp. (CCJ:NYSE) that has managed to eek out a slight gain of 5% or so in the last three months.
What gives?
For the answer, I want you to check out BNN.ca this afternoon. My colleague, Andrew Mickey will be discussing uranium with the Canadian Business News Network.
Back when uranium was only $113 a pound (read early May), Andrew wrote this:
“On Monday, you’ll see uranium futures traded on the [NYMEX] for the first time. However, these aren’t like the average oil or grain future contract. They will be cash settled. After all, there just isn’t enough uranium to go around to keep the power plants running, let alone enough to sit in some remote warehouse to back up a financial contract.
“But the NYMEX throwing its hat in the ring is just the sign of how popular uranium investments have become. Despite that popularity, there is a small segment that is about to get crushed.”
Andrew was talking about a number of Australian uranium stocks that happen to be staking claims in the only two territories that have refused to allow new uranium mines. (Read his full article here.)
But it seems as though problems have seeped into other uranium-producing areas. Although Paladin is looking to start mining in Australia, the company is already producing in Namibia. And Forsys is also in Namibia.
Andrew’s interview with the Canadian Business News Network is sure to provide a lot more answers on this topic. Visit www.bnn.ca to view the video.