Uranium: Mineral of the Moment

JOHANNESBURG (Business Day) — Uranium has definitely been in the spotlight this week.
The U.K. government released its Energy Review, which, as expected, gave the go-ahead to building new nuclear power stations. JSE- and Toronto-listed uranium company sxr Uranium One [TSX:SXR] announced it was negotiating two separate acquisitions of uranium mills and properties in the U.S. Reuters reported that a new investment fund, Geiger Counter, was launched in the U.K. this week to invest specifically in uranium companies.

Locally, Nedbank Capital said it had arranged an R850 million ($119 million) financing facility for the development, construction and operation of the Langer Heinrich platinum mine in Namibia by Australian company Paladin Resources.
As uranium prices benefit from the mineral’s attraction as an alternative energy source to high-priced oil, ironically, oil prices have surged again recently on fears about Iran’s uranium enrichment programme. Fears about Iran’s plans highlight the fact that even 20 years after uranium mines closed because oil was considered safer and more economical as a source of energy, discussions about exploiting uranium energy are usually accompanied by lengthy justification.
Because it is identified with weaponry or as a source of highly toxic waste material, uranium continues to raise unease in the public mind, while for investors it has become a superb buying opportunity.
In the past six months, Paladin’s [TSX:PDN] shares have doubled to A$4.59 ($3.45) on the Australian Stock Exchange, while Uranium One’s have risen from C$5.91 to $10 on TSX.
Recent Activity
On Monday, SXR said it had reached an agreement to purchase Rio Tinto’s Sweetwater Uranium Mill and associated Green Mountain uranium properties after an offer of an immediate $110 million in cash and shares.
In its latest deal, Uranium One said it had signed an exclusivity agreement with U.S. Energy to buy the mothballed Shootaring mill and uranium properties in Utah, Wyoming, Arizona and Colorado.
Also this week, Geiger Counter Limited, a new fund to concentrate on investing in uranium and nuclear power opportunities, launched Monday on the London Stock Exchange [LSE:GCL] and Channel Islands Stock Exchange [CISX:GCL].
This coincides with the release of Britain’s energy plan yesterday, saying nuclear power could make a “significant contribution” to the country’s needs as it seeks to reduce dependence on imported fuel.
Furthermore, there has been a flurry of takeover activity in the junior uranium market of late: Mega Uranium [TSXv:MGA] has intends to buy out Australia’s Redport Ltd. [ASX:RPT]; Crosby Partners, and investment bank, has made an offer for Marathon Resources [ASX:MTN]; Paladin Resources [TSX:PDN] is bidding for Valhalla Uranium [ASX:VUL].
By Viwe Tlaleane,
Source: Resource Investor

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