2008 Uranium Forecasts Remain Bullish

Resource Capital Research of Sydney says forward indicators suggest the price will range between $90 and $100 per pound for several months, then accelerate to $125 by September 2008.

"Uranium fund sentiment and activity remain important factors in the outlook for the spot uranium price," a Resource Capital Research report indicates.


"China has announced 116 planned and proposed new nuclear power reactors, up from 63 in Jan. '07 (an increase of 84 percent), and the USA is up from 23 in Jan.'07 to 32 units (up 39 percent)," according to the report.

As of December 24, the price for a pound of U308 was at $90, up from $85 three months ago. The price peaked six months ago at $138.

Harmony Gold announced that it has sold a 60 per cent stake of a new company it formed to house uranium assets for $US252 million to Africa's biggest private equity fund, Pamodzi Resources Fund.

Harmony said it had launched the venture to take advantage of buoyant uranium prices and would retain a 40 per cent stake in the new company, which it said may be listed in the future.

The world's fifth biggest gold producer said cash from the sale would be used for capital expenditure and to pay off debt.

South Africa's Harmony wants to revive production of uranium -- which is used to fuel nuclear reactors -- as a by-product of gold mining and valued the new, unnamed firm at $US420 million.

Graham Briggs, Harmony's acting chief executive, said the new company would seek funds to build a uranium plant with an output of 500,000 tonnes of ore a month and a new gold waste site at a cost of about 1.7 billion rand ($US245.2 million).

The plant would produce 185,000 pounds of uranium yellow-cake a month or 2.2 million pounds a year, at a cash cost estimated at $US30 to 35 per pound. The yellow-cake would be exported, and there were no immediate plans for it to be enriched in South Africa, Mr Briggs said.

"It (the deal) crystallises out uranium assets and puts money into Harmony's pockets to support its existing capital projects," Mr Briggs told a teleconference.

Analysts welcomed the deal, saying it was a good step in the Harmony's stated aim of reviewing its entire operations.

Cameco Issues Statement On Rabbit Lake

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.

Uranium Futures Prices

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.

South Africa's Rand Merchant Bank (RMB) and AngloGold Ashanti (NYSE AU) are considering the sale of Nufcor International Ltd.

Nufcor is co-owned by the two entities and is in its 50th year of uranium production. Nufcor is the marketing agent for all uranium produced in South Africa.

Activists Pressure BHP On Uranium

A group of activist shareholders plan to pressure BHP Billiton to stop uranium production.

The group of shareholders is asking BHP to take a "moral stand" against the uranium trade.

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."

You are invited to visit The New Uranium Thread on the ADVFN message boards.