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Wednesday
Mar062013

PDAC-After Fukushima fallout, future brightens for uranium juniors

 

By Rod Nickel

TORONTO, March 5 (Reuters) - After two years of mostly falling stock prices in the uranium sector, triggered by the Fukushima-Daiichi nuclear meltdown in Japan, junior miners have become attractive acquisition targets as investors eye more bullish conditions ahead.

The tsunami-triggered meltdown led to reactors being shut in Japan andGermany, and uranium prices tumbled as demand shrank. Uranium is now around $42 a pound, well off the 2011 high of nearly $73, according to producer Cameco Corp.

Some of the uranium sector's dominant players, including Cameco and Anglo-Australian miner BHP Billiton PLC, added to the gloom by shelving projects.

Still, the uranium sector, well represented at this week's Prospectors & Developers Association Canadian mining convention in Toronto, has seen a dozen deals in the last two years, as depressed valuations create buying opportunities, said Rob Chang, an analyst at Cantor Fitzgerald.

That is more than double that in the previous three-year period.

Chang singled out several small companies as attractive investments, including Uranium Participation Corporation, Kivalliq Energy Corp, Energy Fuels Inc and Uranerz Energy Corp.

"Uranium is an area of focus as it is one of the few commodities with a price that is not above its long-term average," Chang wrote to clients recently. Uranium also has "an excellent supply and demand backdrop."

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