Energy

Uranium Investing

The two countries signed an industrial cooperation agreement on nuclear waste recycling. Meanwhile, a potential partnership between AREVA and CNNC could alter the landscape of the uranium industry.

As usual, this week was filled with exciting uranium news. Of particular interest is the potential partnership between AREVA (EPA:AREVA) and China National Nuclear (CNNC), a deal that could alter the landscape of the uranium industry. 
On Monday, the two companies signed a memorandum of understanding that could see CNNC take a minority stake in the French nuclear power company; the deal doesn’t include AREVA’s reactor business, which is being sold to EDF (EPA:EDF). The announcement follows CNNC’s purchase of an unknown number of AREVA shares in May.
Reactions to the deal have been positive so far. “Recapitalization could have significant ramifications on AREVA’s mining business, with likely positive spill-over into the sector,” Dundee Capital Markets analyst David Talbot said in a research note. “Increased funding may escalate exploration/development spending, or M&A activity.”
“Enhanced security of supply tensions may spur long term contracting, as a minority interest may result in future uranium deliveries being largely redirected to France and China. This could reduce available supply for the rest of the world and increase competition between nuclear utilities,” he added.


Another significant deal was struck between France and China this week when the two countries signed an industrial cooperation agreement on nuclear waste recycling during French President Francois Hollande’s visit to Beijing on Monday. The deal could be worth $22 billion.
Talbot sees the recycling agreement as positive, but not as significant as the potential of CNNC gaining a stake in AREVA, which added to the aforementioned concerns regarding further industry tension and security of supply risks.

Uranium news: Anfield sells interest in Wate project to Energy Fuels

Anfield Resources (TSXV:ARY,OTCQB:ANLDF) announced that it has closed a transaction with a subsidiary of Energy Fuels (TSX:EFR,NYSEMKT:UUUU) for the sale of its 50-percent interest in the Wate breccia pipe in a $1.1-million cash-and-stock transaction. Energy Fuels now owns and controls a 100-percent interest in the Wate project.
“We are extremely pleased to acquire Anfield’s interest in the nearly-permitted Wate Project. The Wate Project is a well-known, high-grade breccia pipe deposit that fits nicely into our existing uranium portfolio. Due to their high-grades, these deposits generally represent the lowest-cost sources of uranium production in our portfolio,” Energy Fuels President and CEO Stephen Antony said in a press release.

Uranium news: Berkeley updates PFS

Berkeley Energy (ASX:BKY) announced on Wednesday that an updated prefeasibility study (PFS) that includes the high-grade Zona 7 deposit has transformed the economics of its Salamanca project. The project now has a net present value of US$871.3 million with an internal rate of return of 93 percent based on a discount rate of 8 percent and a long-term uranium price of US$65 per pound.
“We believe that the potential exists for further discoveries of Zona 7 style deposits and are finalising an exploration programme to commence in the New Year which will follow up a number of near surface, high grade drill intersections, located within ten kilometres of the plant that have not yet been fully evaluated,” Berkeley Managing Director Paul Atherley said.
A definitive feasibility study should be completed by May 2016, while construction at the Salamanca project is expected to start mid-2016.
In Talbot’s opinion, the project is a good one. “We like Salamanca and believe the mine will be built. AU$11.1 million cash suggests there is likely enough to last until construction. Project financing is likely required shortly to remain on schedule. Part of Salamanca’s appeal is its low capital intensity,” he said in a research note.
 
Securities Disclosure: I, Kristen Moran, hold no direct investment interest in any company mentioned in this article. 
Editorial Disclosure: Anfield Resources and Energy Fuels are clients of the Investing News Network. This article is not paid-for content. 
Related reading:
Uranium News: Fission Retail Shareholder Group Prepares for Proxy Fight
Uranium News: China Connects Reactor; Uranium Resources, Anatolia Energy Get Merger Approval
Uranium News: Japan Restarts Second Reactor, Denison and Fission Terminate Plan to Merge

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