The Conversation (0)
Sep. 09, 2010 11:25AM PST
The spot market price of uranium jumped 5.5 percent over the past week to about $48 per pound, an increase of approximately $2.50 since the end of August. Several analysts suggest the upward pressure on the price is the result of a combination of increased demand by non-end-users and relatively few current sellers.
The spot market price of uranium jumped 5.5 percent over the past week to about $48 per pound, an increase of approximately $2.50 since the end of August. The rapid spot price rise appreciation was reflected in the price differential of TradeTech and Ux Consulting with a two business day publishing lag. TradeTech raised its spot price Friday to $46.75 per pound up $1.25 from August 31, while Ux raised its price Tuesday to $48 per pound, reflecting a $3.00 increase from August 30.
Several analysts suggest the upward pressure on the price is the result of a combination of increased demand by non-end-users and relatively few current sellers. As a result, the spread between willing buyers and willing sellers widened this week, and several buyers extended their time horizon for delivery into the first quarter of 2011. According to several sources, Argentina’s Combustibles Nucleares Argentinos S.A. (CONUAR) is said to be looking to buy about 520,000 pounds of uranium for delivery next year.
A total of eight transactions were concluded during the first three days of September. Producers and intermediaries were the buyers in the majority of the transactions with all eight transactions concluded at successively higher prices above $45.50.
Fourth quarter spot price forecasts of $50 per pound may be realized sooner than anticipated as end-user demand could remain strong with utilities filling any remaining uranium requirements they may have in 2011. Over 30 million pounds of uranium has sold in the spot market this year, and sales targets for 2010 may have already been met.
Australia Mining Tax
Concern over the uncertainty of Australia’s controversial mining tax is likely to last well into 2011 after the national election, which has resulted in the country’s first minority government since World War Two.
The 30 percent tax on big iron ore and coal mines is a primary focus of Prime Minister Julia Gillard’s second-term agenda and follows closely on the heels of a previous tax proposal (RSPT) on mining companies from the former administration.
Australia’s Uranium Association, which represents producers such as Energy Resources of Australia Limited (ASX:ERA), Rio Tinto (NYSE:RTP) and BHP Billiton (NYSE:BHP), said it was concerned the new government and the Greens might look to widen the mining tax to uranium projects.
Exports from Australia, the world’s third-largest uranium producer behind Kazakhstan and Canada, are forecast to grow to along with rising international demand for nuclear power as nations seek to cut carbon emissions. The country is also host to the world’s largest uranium reserves, and investors and mining interests could benefit significantly from policy changes to enable export to India.
The Greens have long opposed uranium mining, nuclear power, and nuclear weapons. The ruling Labor Party in 2007 abolished its traditional opposition to new uranium mines, although approval for new projects rests at the state level of government.
Australian Future Context
Laws for the new tax are unlikely to be ready before February 2011, and only after a committee headed by former BHP Billiton chairman Don Argus consults mining companies on details of how the tax will work. This committee was due to report by the end of the year, but its work was interrupted by the elections. Treasurer Wayne Swan said on Wednesday he expected the detailed legislation would be six months away. Points of reference include negotiations on the taxing point and valuation of the commodity, and definitions about projects and eligible expenditure. The committee will also endeavor to establish a method of determining which projects are exempt from the tax due to profits of less than $46 million and how the new tax will work to credit payments of state-based mining royalties.
Featured Energy Investing Stocks
Investor Insight
Generation Uranium offers investors high-leverage exposure to a potential major discovery in Canada’s underexplored and resource-rich Thelon Basin, led by a management team with a proven track record of securing high-value exits.
Overview
Generation Uranium (CSE:GEN, OTCQB:GENR, FRA:W85) is a Canadian exploration company focused on wealth creation through discovery within the uranium sector. The company’s primary strategy is to build a high-caliber exploration team that can rapidly test and drill high-potential targets, de-risking projects for potential takeover by larger producers. Currently centered in the prolific Thelon and Angikuni Basins of Nunavut, the company is also actively evaluating additional project acquisitions in the Athabasca Basin to expand its portfolio.
The company is led by a veteran management team with nearly 30 years of experience in mineral development. CEO Michael Collins has a significant track record of building and exiting public companies, including the co-founding of Bluerock Resources, a conventional uranium producer during the 2000-2008 cycle. This expertise is paired with a focused business model that leverages modern geophysical targeting to accelerate exploration timelines and reduce costs, ensuring the company can deliver results quickly in a bullish uranium market.
Company Highlights
- Strategic Location in a Premier Uranium District: The flagship Yath Project is located in Nunavut’s Thelon Basin, contiguous to ATHA Energy’s Angilak Project, which hosts the high-grade Lac 50 deposit.
- High-Grade Discovery Potential: Historical surface sampling at the Yath Project has yielded exceptional uranium grades, including boulders testing at 9.81 percent, 3.95 percent, and 2.14 percent U3O8.
- Expert Management with Exit Experience: Led by CEO Michael Collins, the team has decades of experience in mineral exploration and a history of co-founding companies that were later acquired, such as Prime Mining and Nuclear Fuels.
- Low-Cost, Rapid Exploration Strategy: By leveraging modern geophysics and extensive historical data, the company aims for a "short road to discovery," de-risking projects quickly to maximize shareholder value.
- Bullish Market Fundamentals: Generation Uranium is well-positioned to meet the growing global demand for carbon-free nuclear power, supported by a projected supply deficit and increased interest from major tech companies seeking clean energy.
Key Project
Yath Project - Nunavut, Canada
The Yath Project is Generation Uranium’s flagship project. This 100 percent owned property covers about 120 square kilometers within the underexplored Thelon Basin in Nunavut, Canada. The project is located where the Yathkyed and Angikuni sub-basins meet, which is a region known globally for high-grade uranium potential. It sits directly along the same trend as the Angilak Project owned by ATHA Energy (TSXV:SASK, OTCQB:SASFK, FWB:XSU.F), which contains the Lac 50 deposit, one of the highest-grade uranium resources found outside of the Athabasca Basin with a historical mineral resource estimate of 43.3M lbs at an average grade of 0.69 percent U3O8.
The Yath Project is contiguous to the Lac 50 trend and is crossed by several regional faults and basin boundaries. Past exploration work has already identified high priority targets, while surface sampling in the area has produced uranium grades from boulders, with some testing at 9.81 percent, 3.95 percent, and 2.14 percent U3O8.
The company has commenced its initial field program at the site, set to define and rank drill targets. Historic showings will be combined with new anomalies from the MMT geophysics survey, preparing the project for an anticipated drill permit.
Management Team
Michael Collins - CEO & Director
Michael Collins is a professional geoscientist with nearly 30 years of experience in mineral exploration. He has co-founded several public companies, including Exploits Discovery, Prime Mining (acquired in 2025), and Nuclear Fuels (merged with Premier American Uranium in 2025). He is also currently a director of First Atlantic Nickel.
Christoph Bruening - Director
Christoph Bruening is the founder and managing partner of Value Relations GmbH, a full-service investor relations and public relations agency in Frankfurt with over 25 years of excellence, focusing on mining, exploration, biotech and health care. In addition, he has listed over 600 companies on the Frankfurt Stock Exchange and is a speaker and author of several publications, including on rare earths and uranium.
Dallas Miller - Director
Dallas Miller has been working within the international mining industry for over 15 years, working with BHP and Santos Ltd. He has experience on the ground from an operational standpoint, as well as being an integral part of raising millions of dollars in capital funding for both private and public companies in recent years.
Roger Leschuk - VP Corporate Development
Roger Leschuk has been in corporate management for over two decades, with the past 15 years dedicated to corporate development and investor relations. He has experience participating in and assisting with mergers and acquisitions, and was an investment advisor for various services such as stocks, mutual funds and tax-sheltered investments. He is a Chartered Investment Manager and a Fellow of the Canadian Securities Institute.
Monty Sutton - CFO
Monty Sutton brings over 35 years of experience in public markets and corporate governance. He previously served as CFO for Nuclear Fuels from its IPO through its acquisition.
