July 17, 2008
Spot price continues to climb
Publisher: U3O8.biz
Author: Luke Brocki
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The spot price of uranium continues to climb thanks to strong demand
in the market. Price publisher Tradetech raised its price projection
by US$3.25 to US$63.25 a pound U3O8 late last week, reporting the
metal's spot price gained steadily through the week, as buyers eager
to cash in on new demand raised their offer prices. Eight transactions
were reported, with nine buyers still seeking several million pounds
of the material.
Rival price publisher Ux Consulting quickly followed suit, raising its
price estimate US$4 to US$64 a pound U3O8 on July 14. According to
Tradetech, investors and financial groups still make up the bulk of
the buyers in the spot market, but utilities are also starting to shop
around.
Reuters reported much of the latest price hike was fuelled by
London-listed Nufcor Uranium Ltd., one of the world's largest
uranium-holding funds, which is touring Canada and selling shares to
raise money for future uranium purchases. Nufcor already holds around
2.3 million pounds of uranium stocks, and, according to traders, it's
looking to raise some $75 million to buy more than a million pounds of
uranium.
If the proverbial price bottom is indeed behind us, several weeks of
continuous gains should attract utilities back into the spot market,
driving prices even higher. According to Tradetech, the price is set
for recovery this summer and fall, with expectations it could climb as
high as US$95 a pound U3O8.
The Western Prospector saga hit what could be its climax on the
Toronto Stock Exchange on Tuesday, with the company posting massive
gains after trading was halted in the morning session to reveal the
company could well be getting taken over. Western shares jumped 58
cents, or a whopping 80.6 per cent, to close Tuesday at C$1.30, after
its board of directors unanimously accepted a C$1.34-per-share bid by
Tinpo Holdings Industrial Company Ltd.
The cash deal, which valued Western's equity at some C$74 million,
represented an 86-per-cent premium to Western's closing price of 72
cents on July 14, 2008, and a 168-per-cent premium to Western's
closing price of 50 cents on May 9, 2008, the latter being the last
trading day before the unsolicited takeover bid by Khan Resources Inc.
Tinpo's offer beat out the Khan bid by 130 per cent. Tinpo's offer
will take the form of a takeover bid, with one of Tinpo's subsidiaries
set to acquire all of Western's outstanding shares. The offer, still
subject to regulatory approval, will be open for acceptance for at
least 35 days. Meanwhile, Khan Resources also gained on Tuesday,
climbing 24 cents, or 28.2 per cent, to C$1.09.
Finally, in global nuclear news, political leaders continued this week
to recognize the importance of nuclear power in the battle against
global warming.
In the UK, The Independent newspaper reported Prime Minister Gordon
Brown wants to accelerate the construction of at least eight nuclear
reactors and will set no limit on the number of reactors to be built
by private companies. The move trails worries of a potential energy
crisis in the UK if the country doesn't reduce its dependence on oil,
which continues to get astronomically more and more expensive.
And, over in Germany, Chancellor Angela Merkel announced a slowdown of
the country's planned phase-out of nuclear power. Merkel, like Brown,
is worried Germany will be unable to cut greenhouse gas emissions
without the help of nuclear reactors, which produce no carbon dioxide.
According to Agence France-Presse, Germany plans to take offline the
last of its nuclear reactors by 2020 under a plan approved by former
chancellor Gerhard Schroeder, but Merkel is rethinking the plan,
despite heavy fire from critics and political opponents.
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