Which ura­nium?

The Ind­aba is good chance to run com­par­a­tive tests

Finweek English Edition - - Mining indaba -

WITH URA­NIUM cur­rently all the rave, the Min­ing Ind­aba pro­vides fer­tile ground to com­pare south­ern Africa’s three most in­flu­en­tial ura­nium pro­duc­ers: sxr Ura­nium One, First Ura­nium and Pal­adin Re­sources. All are at­tend­ing.

The price of ura­nium is ex­pected to push through US$100/lb this year. Com­pare that to the $20/lb level of around three to four years ago. A com­bi­na­tion of poor ex­plo­ration, ex­hausted in­ven­to­ries and the grow­ing in­ter­est in al­ter­na­tive en­ergy has helped im­prove de­mand for the metal.

Ac­cord­ing to Re­source Cap­i­tal Re­search, the mar­ket val­u­a­tion of Cana­dian ura­nium ju­niors was up 143% last year and 186% for their Aus­tralian coun­ter­parts. There­fore, Ura­nium One’s 140% per­for­mance on the JSE was “av­er­age” for its sec­tor and an ar­gu­ment could be made that the counter will con­tinue to track its peer group.

The price of ura­nium is ex­pected to push through $100 per pound

this year.

By the time this is pub­lished, Ura­nium One should have started pro­duc­tion from its Do­min­ion One mine. The miner, which re­cently joined Ura­nium One on the Toronto Stock Ex­change, is still gath­er­ing in­for­ma­tion on its re­sources. Pal­adin Re­sources, op­er­at­ing in Namibia, has ar­guably the most ad­vanced projects in south­ern Africa.

Pal­adin Re­sources’ Langer Heinrich Ura­nium project in Namibia is pro­duc­ing ura­nium and a bank­able fea­si­bil­ity study is near­ing com­ple­tion for its Kayelek­era project in Malawi. It also re­cently bought Val­halla Ura­nium.

Con­vert­ing from ex­plo­ration into pro­duc­tion means a lot to ura­nium hope­fuls, as it pro­vides an im­por­tant up­lift in share rat­ings. Ura­nium One hopes to start match­ing Pal­adin Re­sources. Merely in­hab­it­ing the ura­nium mar­ket gen­er­ates value, as First Ura­nium saw when it was able to raise $203m at its Toronto de­but. Key is­sues for south­ern Africa’s ura­nium pro­duc­ers will there­fore be: • Im­prov­ing their re­sources base. • Be­com­ing a pro­ducer or near-term pro­ducer as quickly

as pos­si­ble. • The abil­ity to com­pete in the merger and ac­qui­si­tion mar-

ket. • Re­main­ing low-cost to stay com­pet­i­tive when the sup­ply

deficit nar­rows in years hence.

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