Uranium companies UEX, Mega Uranium, U3O8 and NexGen Energy all saw major share price gains after Cameco announced plans to cut output.
The S&P/TSX Composite Index (INDEXTSI:OSPTX) closed last Friday (November 10) down 0.27 percent, at 16,039.26 points after reaching record high earlier in the week.
In what’s been described as the biggest catalyst for the uranium market since the 2011 Fukushima nuclear disaster, major miner Cameco (TSX:CCO,NYSE:CCJ) announced plans to cut production midway through last week.
The news sparked uranium market optimism, with many suggesting that the cuts could be the catalyst needed to finally kick the uranium market back into gear. Unsurprisingly, five of the top-gaining mining stocks on the TSX last week were uranium companies:
Here’s a look at what moved the share prices of those companies last week.
AuRico Metals’ share price jumped 39.06 percent to close last week at $1.78 after announcing that it will be acquired by Centerra Gold (TSX:CG). Centerra will pay $310 million for AuRico, the companies announced in a joint statement last Tuesday (November 7).
AuRico is developing the Kemess property in BC. The asset hosts the feasibility-stage Kemess underground gold–copper project, the Kemess East project and the infrastructure from the past-producing Kemess South mine. Centerra already operates a mine in BC, the Mount Milligan property, and holds other assets in North America and around the world.
Uranium exploration and development company UEX saw its share price spike 38.24 percent last week to end at $0.24. It has a portfolio of projects in Saskatchewan’s Athabasca Basin, and the Christie Lake project, in which it holds a 30-percent stake, is 9 kilometers northeast of Cameco’s McArthur River mine.
The company’s share price boost last week was likely driven partially by news of Cameco’s production cuts. That said, it’s worth noting that UEX also announced last week that it is looking at opportunities to enhance shareholder value through the West Bear cobalt–nickel prospect at its Hidden Bay project.
Mega Uranium’s share price leaped 37.93 percent last week to finish at $0.19. The company’s goal is to become a mid-tier uranium producer through the development of its projects in Australia — those include the Ben Lomond and Georgetown properties. Mega has not released any news since June, when it closed a private placement for aggregate gross proceeds of $1.25 million.
U3O8 is focused mainly on uranium, but also has an interest in other clean energy metals, including vanadium, nickel and phosphate, as well as rare earths. Its projects are in South America, and include the Laguna Salada, Berlin and Kurupung deposits; they are located in Argentina, Colombia and Guyana, respectively. Last week, its share price rose 30.91 percent to end at $0.44.
The company’s most recent news came on November 2, when it closed a private placement for gross proceeds of $517,000; U3O8 also received a $1-million unsecured operating line of credit from founder, director and shareholder Keith Barron at that time.
NexGen Energy saw a share price rise of 23.08 percent to close last week at $2.95. It holds over 259,000 hectares of land in the Athabasca Basin, with key assets including the high-grade Arrow deposit, the Harpoon and Bow discoveries and the Cannon area; all of those are located at the company’s Rook I property. NexGen last released news midway through October.
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Data for 5 Top TSX Stocks articles is retrieved each Friday at 10:30 a.m. PST using The Globe and Mail’s market data filter. Only companies with a market capitalization greater than $50 million prior to the week’s gains are included. Companies within the mining and precious metals sectors are considered.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.