The past couple of weeks have been hot for uranium and uranium stocks. With the price of uranium hitting $45 per lb. you have to go all the way back to 2012 to fetch that sort of price. Prices still have a long way to go to reach the high of $140 per lb. back in 2007, however a close 50% jump in prices in the past few weeks might be a sign of things to come.
So what’s really causing this price spike in uranium anyways? Well one thing that is happening out there is back in early March Sprott Asset Management entered into a definitive agreement with Uranium Participation Corporation TSX: U in which UPC shareholders will become unitholders of the Sprott Physical Uranium Trust which is a newly-formed entity managed by Sprott Asset Management.
This new Sprott fund is busy buying up physical uranium on a daily basis. The fund started buying the commodity on the spot market in mid-August and has amassed over 24 million pounds of uranium, sometimes buying more than 500,000 pounds in a single day. Of course this is great for the juniors and even the producers of uranium as they are seeing new 52 week highs in their stock prices.
Of course the majors are usually the first to benefit with rallies like we’ve seen the past few weeks. Miners like Cameco TSX-CCO have seen a 50% rise in share price in the past few weeks. Denison Mines TSX-DML another larger player has almost doubled in price in the last couple weeks. This rally is helping some of the juniors as well and if prices hold up I’m thinking we will see lots of activity in the drilling and exploration end this coming winter as a lot of uranium exploration takes place in areas like northern Saskatchewan where some of the highest grae uranium is mined in the world.
A quick look at some of the smaller explorers like Fission Uranium TSX-V:FCU that have also seen stock prices hit new highs are getting investor attention. Fission Uranium has 100% ownership of the PLS Property, which comprises 17 mineral claims totaling 31,039 ha located on the southwest margin of the Athabasca Basin. The property is accessible by all-weather Highway 955 which continues north through the area of the UEX-AREVA Shea Creek deposits to the past producing Cluff Lake uranium mine.
Skyharbour TSX-V:SYH has seen it’s stock price double in the past few weeks. It’s also working in the Athabasca Basin with six drill-ready projects consisting of over 240,000 hectares. One of the properties, the Moore Project is an advanced-stage uranium exploration property with high grade uranium mineralization at the Maverick Zone with drill results returning up to 6.0% U3O8 over 5.9 metres including 20.8% U3O8 over 1.5 metres at a vertical depth of 265 metres. The company has several other properties that all merrit eploration.
UEX Corp TSX-V:UEX is another junior worth a look. The company has four projects. The West Bear Cobalt-Nickel project is a shallow, open-pit amenable and very high-grade cobalt-nickel deposit in the eastern Athabasca Basin that remains open in all directions for expansion. The Christie Lake property in the eastern Athabasca Basin located only 9 km northeast and along strike of the McArthur River Mine, the world’s largest uranium mine. The Horseshoe and Raven deposits and the Shea Creek property which is host to one of the largest undeveloped uranium resources in the Athabasca Basin.
This wraps up a very short write up on what’s happening in the uranium end of things here. I’ll be doing some more research on some of these juniors and hopefully be able to have more information dug up in the near future.
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