PERTH (miningweekly.com) – The market valuation of Australian uranium miners with one or more projects had surged by 173% over the past 12 months, a new Resource Capital Research (RCR) report indicates, noting that this performance was better than that achieved by their uranium counterparts in Canada.

The market valuation of Australian companies was up 6% over the past month, 8% over the past three months, and 173% over the past 12 months. This compared favourably against Canadian companies, which were up 6% over the past month, 16% over the past three months, and up 136% over the past 12 months.

However, RCR’s March quarter report also indicated that, over the past month, shares in the uranium mining majors had been mixed across both territories.

US RENAISSANCE

The authors, John Wilson, Tony Parry and Trent Allen, also argue that the US uranium mining industry appears to be on the “cusp of a Renaissance”.

They note that, while, in the past, analysts, policymakers, and other observers have expressed doubt that the US could ever serve as a viable source of uranium, activity is picking up pace.

In fact, they assert that the US uranium recovery industry is on the verge of a breakout that could significantly increase domestic uranium production.

Given that the international community is on the verge of a significant increase in the construction and operation of new nuclear reactor units, it is critical that the US becomes an active participant in fuelling these facilities, RCR added.

Currently, there were 436 nuclear power reactors in operation and 53 under construction, and a further 469 new nuclear reactors were planned or proposed globally as of February, 2010. This was up from 376 planned or proposed reactors at December, 2008.

A total of 67 new reactors are scheduled to be commissioned by 2016.

“Based on current conditions in the uranium recovery and related regulatory communities in both the short-and-long term, it is reasonable to conclude that the US is becoming fertile ground for international investment in new and existing uranium recovery projects.”

RCR noted that the short-term progress in the US uranium market could be seen in the imminent licensing of several newly proposed in situ leach uranium recovery (ISR) projects, additional ISR project licence applications, and some proposed new conventional uranium recovery projects.

Further, potential conventional uranium recovery projects also are being considered, including the proposal of the first new conventional uranium mill in over three decades, and the one actively operating a conventional uranium mill is ramping up its operations. For new or existing conventional uranium mills to prosper, conventional mining projects will be required, RCR stated.

The researcher noted that the long-term future of the domestic uranium industry lies in the development of new uranium recovery projects in States historically known to have significant uranium reserves. The State where there should be significant focus on is New Mexico.

“Even though the initial stages of this licensing process’ development were difficult, it appears that the process has stabilised and has become more predictable for potential licence applicants.”

“With that said and with the impending worldwide shortfall of primary uranium production in the coming years, it is time for the investment community to take a hard look at potential US uranium producers,” RCR said.

Meanwhile, the report offers a uranium price outlook for the next three to six months of between US$40/lb and US$45/lb.

“In the absence of unexpected exogenous shocks, we anticipate no strong drivers to influence the market outlook through 2010,” the authors wrote.

The uranium spot price was currently trading at US$41,25/lb, down 8% from the US$45/lb of three months ago and well below the US$52,50/lb recorded in December 2008.

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