Yellowcake Bucks Up.
We’re not calling the bottom of the market here. But we saw two signs of life in uranium this past month.
Firstly, Avalon Minerals is planning to sell some uranium asset as an IPO. Basically, it thinks it can get more value out of them in the public market than tucked away in its balance sheet. It wouldn’t do that unless it thought the market was on the up.
The uranium price bottomed out at about US$56 per pound about a month ago. This week it’s trading at US$65. Yet Paladin (ASX:PDN) and Energy Resources of Australia (ASX:ERA) are each trading well below their yearly highs. Investors are looking for assets with safe, long-term profiles at the moment. That’s not uranium companies. But the hard asset itself might see demand. And that’s good for the companies.
