Cameco Corporation — Uranium – Fuel – Electricity – Mining …South West Industrial Saskatoon, Saskatchewan, Canada (Photo credit: Wikipedia)
Cameco* (CCO : TSX : $16.84)
Paladin Energy (PDN : TSX : $0.86)
With China expected to grow its nuclear power program from the 15 currently operating reactors to 67 by 2021, of which 26 are under construction, does it surprise you that China is planning on step up (acquiring?) uranium mining projects in foreign countries?
According to the China Daily, China National Nuclear Corp. (CNNC) will speedup overseas uranium mining exploration, focusing on Australia, Africa and Central Asia, to meet growing uranium demand. Sun Qin, Chairman of CNNC, the state-owned energy company which runs more than 40% of China’s nuclear facilities, said, “We have no worries about uranium resource reserves, as we will enhance efforts on exploring the resources both at home and abroad…We will step up uranium mining projects in foreign countries…The target overseas markets include Australia, Africa
and Central Asia.”
Currently 95% of China’s uranium imports come from Kazakhstan, Namibia, Australia and Uzbekistan.
China recently reported that a large leaching sandstone-type uranium deposit had been discovered in northern China’s Inner Mongolia autonomous region. Most uranium watchers in the West shrugged their shoulders when they heard the news. With the number of publicly listed uranium companies trading at multi-year or all-time lows, does it make sense that the Chinese are willing to “explore” for new resources instead of buy? Why not look to acquire uranium mining projects around the globe? The answer may be that the Chinese believe regulatory and government approval is difficult to get in certain countries
Posted by jackbassteam on November 15, 2012
A billet of highly enriched uranium that was recovered from scrap processed at the Y-12 National Security Complex Plant. Original and unrotated. Source: http://web.em.doe.gov/takstock/phochp3a.html (Photo credit: Wikipedia)
Cameco (CCO : TSX : $22.55)
Denison Mines (DML : TSX : $1.40)
Paladin Energy (PDN : TSX : $1.45)
Uranium One (UUU : TSX : $2.47)
Since the beginning of August, shares of Cameco are up almost 13%; an increase of over $1 billion in market cap. For some time now, we have been highlighting that August is historically the seasonal low for the uranium sector and should provide excellent entry points into high-quality uranium-related equities. Magnifying the potential this year is how severely beaten down the uranium sector valuations are (started with Fukushima and continued with this year’s sell-off in resource markets) and the large number of potential bullish catalysts that are lining up for the sector over the next 6-18 months.
Adding to the enthusiasm in the sector is the need for utilities and large producers to think and plan with a long-term focus. Last week, we saw evidence of this, as two deals were announced suggesting that global utilities believe: i) Prices are very attractive at current levels; and ii) Securing future supply is an important concern.
Paladin announced that it has entered into a long-term off-take agreement with an undisclosed utility that includes a significant pre-payment of $200 million, and the United Arab Emirates (UAE) announced that it has awarded six fuel contracts valued at $3 billion for its first nuclear power plant, expected to start up by 2017. The UAE also stated that it “expects to return to the market at various times to take advantage of favourable market conditions and to strengthen its security of supply position.” Of note, the Middle East’s largest player, Saudi Arabia, has 16 nuclear reactors planned over the next 20 years.
Posted by jackbassteam on August 22, 2012