Industry analysts John Redstone and John Hughes of Desjardins Securities are predicting that uranium prices will begin to consolidate and settle around $60 US.
"We expect supply growth to match our most aggressive demand growth profile, keeping total inventories well above adequate levels," they wrote in a note to clients.
Ux Consulting reports spot uranium prices down $3USD to $65USD per pound.
TradeTech reports a decline of $4USD to $64USD.
Ux Consulting reports that spot uranium prices declined $2.00 U.S. per lb last week to $71.00 USD.
Uranium oxide inventories continue to build due to reduced processing capabilities. Cameco's (NYSE CCJ) processing plant remains offline and is not expected to resume production until the fourth quarter of 2008. Cameco's facility processes approximately thirty percent of the world's uranium oxide.
Excerpt from speech to Washington International Renewable Energy Conference.
.......And the truth of the matter is, you've got to be -- have a growing economy to be able to afford these technologies in the first place. So here are some ways that we're dealing with the issue of electricity. One, I strongly believe the United States must promote nuclear power here in the United States. Nuclear power -- (applause) -- if you're interested in economic growth and environmental stewardship, there's no better way to achieve both of them than through the promotion of nuclear power. Nuclear power is limitless. It's one existing source that generates a massive amount of electricity without causing air pollution or any greenhouse gases.
And yet the United States -- we haven't built any nuclear power plants in a long time. We have a promising technology available and yet we're stuck -- until recently. All of our citizens probably don't understand, but France, our ally and friend, gets nearly 80 percent of its power from nuclear power. Isn't that an amazing statistic? It's time for America to change.
My administration is working to eliminate the barriers to development of nuclear power plants. Last year we invested more than $300 million in nuclear energy technologies. We want our people to understand that this generation of nuclear power plants is safe. We want people to feel comfortable about the expansion of nuclear power.
There's regulatory uncertainty when it comes to permitting plants in the United States. You can't expect somebody to invest a lot of money and have the regulatory process at the very end stop that capital from being deployed. It makes no sense. Just like tax policy has to be certain, so does regulatory policy have to create a sense of certainty in order to get people to invest.
So in the energy bill I signed in 2005, we began to address that uncertainty with federal risk insurance for those who build nuclear power plants. This insurance protects the builders of the first six new plants against lawsuits -- we got a lot of them in America, by the way; too many lawsuits, in my judgment -- against bureaucratic obstacles and against delays beyond the -- that would cause people to hesitate to participate in this program.
We've also launched a program called Nuclear Power 2010. Sam Bodman is in charge of all these. It's a partnership between our industry and the U.S. government. Since we've started these programs, we've received six applications to build and operate new nuclear power plants in the United States. The paradigm is beginning to shift. And we anticipate that another 13 applications will be submitted this year.
Many of the construction projects will be supported by $18.5 billion in loan guarantees provided by the government. By the way, that's part of a loan-guarantee projects that we got out of Congress -- $18 billion for the nukes, $10 billion for renewable energy expansions in the United States. (Applause.) This will enable our plant owners -- guys that are applying for loans -- (laughter) -- the whole purpose is, is we want to expand our nuclear power industry. And we're taking specific actions to do it.
Speech transcript on WhiteHouse.gov
Facts from World Nuclear Association.....Mining companies produced 39,429 tons of uranium in 2006 (the most recent year for which data is available). This represents only 62 percent of the world's nuclear reactor demand.
Australia, Canada and Kazakhstan produce more than half of the world's uranium supply. In 2007 Australia and Kazakhstan posted gains in output while Canada's uranium production declined.
Cameco (NYSE CCJ) announced that it will scale back operations for a week at its Rabbit Lake mine due to increased water flow.
"Cameco Corporation announced today that underground activities at the Eagle Point mine at the Rabbit Lake operation have been temporarily reduced as a precautionary measure," Cameco stated in a press release.
Capacity of water-handling equipment at the Saskatoon, Canada mine had been reduced due to an equipment upgrade.
"Limited mining activity will continue and the mill continues to operate with a small amount of stockpiled ore. This mine has encountered similar situations in the past and dealt with them successfully," it said.
December 2007 contract $98.00
January 2008 contract $80
March 2008 contract $80
In a statement issued Tuesday, Energy Resources of Australia forecast that long term demand for uranium remains strong.
ERA, which is 68% owned by Rio Tinto, forecasts that demand will remain strong, despite recent weakness in spot prices.
Uranium long term market prices in September settled at $95 US dollars per pound. During the same period in 2006 prices were $54 USD per pound. Uranium prices have begun to rebound after 16 weeks of falling or flat prices.
TradeTech LLC reported Monday that spot uranium price rose $3 USD to $78 USD per pound. Spot uranium hit a high of $138 USD in June.
A group of activist shareholders plan to pressure BHP Billiton to stop uranium production.
The group, BHP Billiton Shareholders for Social Responsibilities, has received 60 signatures to support their measure. 100 signatures are needed to get the issue on the agenda of BHP's annual meeting next month.
"BHP Billiton's outstanding commercial success and market pre-eminence carries an equally large moral obligation to provide leadership on issues of uranium production and nuclear proliferation," the group's spokesman John Poppins told The Guardian newspaper.
"Claims that uranium is `carbon free' completely ignore the substantial carbon costs of its mining, processing, power station construction, protection and disposal."
December 2007 Contract
$85
January 2008 Contract
$90
February 2008 Contract
$90
The uranium bull market has dramatically increased the market caps of uranium producers. The world's largest uranium miner, Cameco Corp., is seeking to increase production while avoiding paying inflated prices for smaller uranium producers.
Other large uranium player such as Uranium One and Areva have spent billions this year making acquisitions. In contrast, Cameco is choosing to make smaller investments in joint ventures with smaller uranium prospectors. These joint ventures provide powerful leverage for Cameco, giving the company up to 70% stakes in prospective developments.
Recent Cameco investments and joint ventures:
Cameco acquired a 10% stake in Western Uranium for $20.5 million.
Cameco acquired 19.5% of UNOR inc.
$19 million investment in Cue Capital to explore for uranium in Paraguay.
Joint venture with Vena Resources to explore for uranium in Peru.
Cameco issued the following information in a press release on Thursday........
The following information provides an update on major activities at Cigar Lake since the second quarter report.
Cameco continues to make progress on its remediation plan, following the flooding of the underground development at Cigar Lake last year. The initial remediation activities included drilling holes to the source of the inflow and to a nearby tunnel, pumping concrete through the drill holes, sealing off the inflow with grout and drilling dewatering holes. Regulatory approval is required for each phase of the remediation plan.
All of the holes for pouring concrete and dewatering are now complete as well as reinforcement of the adjacent tunnel. Pouring of the concrete plug in the tunnel at the vicinity of the inflow began at the end of July and is nearly complete. Pouring cement and injecting grout into the rock fall pile and up into the location of the water inflow source has commenced and at this point it is expected to take another six to 10 weeks to complete. The effectiveness of the plug will need to be assessed and will not be known until dewatering is underway.
Cameco is also drilling a number of new diamond drill holes to assess the pore water pressure and rock quality and structure to determine if depressurization, reinforcement or other precautionary measures may be necessary in two other areas of the mine prior to dewatering. We expect this assessment to be complete by year end.
The next steps of the remediation will include dewatering the mine, verifying that the inflow is sufficiently sealed, and installing the contingency surface freezing pipes, if required. Subsequent remediation activities will include restoring underground areas and resumption of mine development and may include ground freezing in the area of the inflow. Following regulatory approval, dewatering pumps and infrastructure are now installed and electrical work is underway.
A revised production forecast will be provided after the decision is made on the timing of the second shaft completion, the mine has been dewatered and the condition of the underground development has been assessed. As previously announced, completing the second shaft as a priority item and the delay in some remediation activities would set back the planned production startup date from 2010 to 2011.
This update on Cigar Lake will replace the scheduled update for September 19 unless there are material developments to report. The next update will be available with the third quarter report.
The scientific and technical information related to Cigar Lake in this news release was prepared under the supervision of C. Scott Bishop, a professional engineer employed by Cameco as the chief mine engineer of the Cigar Lake project and a qualified person for the purpose of National Instrument 43-101.
Uranium producer Cameco has announced that it will repurchase up to 5% of the company's common shares. This represents an investment of roughly $750 million based on today's trading price.
"Cameco's strong financial position provides us with the opportunity to invest further in the nuclear industry," said Jerry Grandey, Cameco's president and CEO. "We are committed to strengthening our core asset base for the long term. And, in the near term, as attractive assets have not been available at reasonable valuations, the best investment today is repurchasing our own shares."
Cameco plans to use cash on hand to finance the stock repurchase and will purchase the shares on the open market between September 11 2007 and September 10 2008.
December 2007 Contract
$80
January 2008 Contract
$80
March 2008 Contract
$80
Ux Consulting lowered its spot price Uranium indicator to $90 (US) on Monday, down from $105 the previous week.
TradeTech continues to price spot Uranium at $105.
NYMEX Uranium futures are also under pressure with the December 2007 contracts hitting $68 per pound.
Uranium prices have been under pressure due to weak demand from speculators as well as seasonal shifts within the nuclear industry.
