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June 2009
For years, as memories of Chernobyl and Three Mile Island resonated in the public’s mind, uranium lost much of its luster. With the fall of the Soviet Union, the Western markets suddenly became �ooded with Russian yellowcake and the bottom fell out of the price of the metal, reaching lows of $7 per pound. This absurdly low price caused many mines to be completely unfeasible and exploration essentially stopped for over 10 years. Slowly but surely, a massive shortfall in annual production had been created.
Uranium has enjoyed something of a renaissance in the last seven years though. Now with massive emerging markets, such as China and India, looking to greatly increase their electrical capabilities, they have made nuclear a priority. The enormous environmental toll taken by using coal for electrical generation has become all too clear. As the world strives for more carbon-free sources of power generation, other conventional methods need to pick up the slack. Forms of ‘renewable’ energy are not yet �scally competitive nor capable of meeting the current electrical needs of the world. Nuclear is once again in the public’s mind, but this time in a much more positive light.
The price in the uranium spot market has risen from $7 in 2002 to as much as $137 in June 2007 (though now settled at $49 as of May 25, 2009). This enormous increase has brought exploration of uranium back into the market’s consciousness. Over $1.5 billion have been raised from Canadian markets in the last three years for exploration programs across the world, looking for sites that will help �ll the production gap that is still widening. While the disarmament of nuclear weapons has �lled much of this shortfall so far, it’s not a practice that can continue inde�nitely.
Europe and North America have a long established history of nuclear use, but national development programs have been stalled until recently. Along with the massive planned expansions in China, Japan and India, several new reactors are in the development stage in America, Canada, the United Kingdom, Germany and France as well. These developments create an enormous supply pressure that will be felt strongly.
North American utilities have become extremely cautious in the midst of the ongoing recession, feeling it unwise to make long-term agreements to purchase uranium. Asian buyers, on the other hand, have been aggressively trying to secure as many long-term agreements as necessary with hedged pricing going forward. Asian nuclear consortiums have been actively buying into strategic development joint ventures to further secure supply. We might well be facing another price spike given the potential supply crunch. Many analysts predict a near-term spot price of $60-$75 per pound and �ve-to-ten year price of $100-$250.
For more information about the Canadian Financing Bulletin contact us at 1-800-504-3588 or [email protected]
www.canadianfinancing.com
May-
06
Jun-0
6
Jul-
06
Aug
-06
Sep
-06
Oct-
06
No
v-0
6
Dec-0
6
Jan-0
7
Feb
-07
Mar-
07
Ap
r-0
7
May-
07
Jun-0
7
Jul-
07
Aug
-07
Sep
-07
Oct-
07
No
v-0
7
Dec-0
7
Jan-0
8
Feb
-08
Mar-
08
Ap
r-0
8
May-
08
Jun-0
8
Jul-
08
Aug
-08
Sep
-08
Oct-
08
No
v-0
8
Dec-0
8
Jan-0
9
Feb
-09
Mar-
09
Ap
r-0
9
15,000
14,000
13,000
12,000
11,000
10,000
9000
8000
7000
6000
5000
4000
3000
2000
1000
% R
aise
d
Ave
rag
e C
lose
(TS
X &
TS
X-V
)
Amount Raised
20%
40%
60%
80%
100%
TSX-V TSX
% of Capital Raised Used for Development and Exploration
$ R
aise
d 0
00,0
00
Ave
rag
e C
lose
(TS
X &
TS
X-V
)
May-
06
Jun-0
6
Jul-
06
Aug
-06
Sep
-06
Oct-
06
No
v-0
6
Dec-0
6
Jan-0
7
Feb
-07
Mar-
07
Ap
r-0
7
May-
07
Jun-0
7
Jul-
07
Aug
-07
Sep
-07
Oct-
07
No
v-0
7
Dec-0
7
Jan-0
8
Feb
-08
Mar-
08
Ap
r-0
8
May-
08
Jun-0
8
Jul-
08
Aug
-08
Sep
-08
Oct-
08
No
v-0
8
Dec-0
8
Jan-0
9
Feb
-09
Mar-
09
Ap
r-0
9
100
90
80
70
60
50
40
30
20
10
15,000
14,000
13,000
12,000
11,000
10,000
9000
8000
7000
6000
5000
4000
3000
2000
1000
TSX-V TSXAmount Raised $
Total Capital Raised (in $000,000)
June 2009
Please visit www.canadianfinancing.comto subscribe to our upcoming “Focus on Uranium”
Please visit www.canadianfinancing.com to subscribe to our upcoming “Focus on Uranium” For more information about the Canadian Financing Bulletin contact us at 1-800-504-3588 or [email protected]
Development Total
Exploration Total
Other
2006
2007
2008
2009
17.66%43.36%
38.30%
21.34%59.45%
84.91% 10.87%
4.22%
19.21%
38.23%
38.98%
23.47%
% of Money Raisedfor Exp. & Dev. ‘06-’09
June 2009
For years, as memories of Chernobyl and Three Mile Island resonated in the public’s mind, uranium lost much of its luster. With the fall of the Soviet Union, the Western markets suddenly became �ooded with Russian yellowcake and the bottom fell out of the price of the metal, reaching lows of $7 per pound. This absurdly low price caused many mines to be completely unfeasible and exploration essentially stopped for over 10 years. Slowly but surely, a massive shortfall in annual production had been created.
Uranium has enjoyed something of a renaissance in the last seven years though. Now with massive emerging markets, such as China and India, looking to greatly increase their electrical capabilities, they have made nuclear a priority. The enormous environmental toll taken by using coal for electrical generation has become all too clear. As the world strives for more carbon-free sources of power generation, other conventional methods need to pick up the slack. Forms of ‘renewable’ energy are not yet �scally competitive nor capable of meeting the current electrical needs of the world. Nuclear is once again in the public’s mind, but this time in a much more positive light.
The price in the uranium spot market has risen from $7 in 2002 to as much as $137 in June 2007 (though now settled at $49 as of May 25, 2009). This enormous increase has brought exploration of uranium back into the market’s consciousness. Over $1.5 billion have been raised from Canadian markets in the last three years for exploration programs across the world, looking for sites that will help �ll the production gap that is still widening. While the disarmament of nuclear weapons has �lled much of this shortfall so far, it’s not a practice that can continue inde�nitely.
Europe and North America have a long established history of nuclear use, but national development programs have been stalled until recently. Along with the massive planned expansions in China, Japan and India, several new reactors are in the development stage in America, Canada, the United Kingdom, Germany and France as well. These developments create an enormous supply pressure that will be felt strongly.
North American utilities have become extremely cautious in the midst of the ongoing recession, feeling it unwise to make long-term agreements to purchase uranium. Asian buyers, on the other hand, have been aggressively trying to secure as many long-term agreements as necessary with hedged pricing going forward. Asian nuclear consortiums have been actively buying into strategic development joint ventures to further secure supply. We might well be facing another price spike given the potential supply crunch. Many analysts predict a near-term spot price of $60-$75 per pound and �ve-to-ten year price of $100-$250.
For more information about the Canadian Financing Bulletin contact us at 1-800-504-3588 or [email protected]
www.canadianfinancing.com
May-
06
Jun-0
6
Jul-
06
Aug
-06
Sep
-06
Oct-
06
No
v-0
6
Dec-0
6
Jan-0
7
Feb
-07
Mar-
07
Ap
r-0
7
May-
07
Jun-0
7
Jul-
07
Aug
-07
Sep
-07
Oct-
07
No
v-0
7
Dec-0
7
Jan-0
8
Feb
-08
Mar-
08
Ap
r-0
8
May-
08
Jun-0
8
Jul-
08
Aug
-08
Sep
-08
Oct-
08
No
v-0
8
Dec-0
8
Jan-0
9
Feb
-09
Mar-
09
Ap
r-0
9
15,000
14,000
13,000
12,000
11,000
10,000
9000
8000
7000
6000
5000
4000
3000
2000
1000
% R
aise
d
Ave
rag
e C
lose
(TS
X &
TS
X-V
)
Amount Raised
20%
40%
60%
80%
100%
TSX-V TSX
% of Capital Raised Used for Development and Exploration
$ R
aise
d 0
00,0
00
Ave
rag
e C
lose
(TS
X &
TS
X-V
)
May-
06
Jun-0
6
Jul-
06
Aug
-06
Sep
-06
Oct-
06
No
v-0
6
Dec-0
6
Jan-0
7
Feb
-07
Mar-
07
Ap
r-0
7
May-
07
Jun-0
7
Jul-
07
Aug
-07
Sep
-07
Oct-
07
No
v-0
7
Dec-0
7
Jan-0
8
Feb
-08
Mar-
08
Ap
r-0
8
May-
08
Jun-0
8
Jul-
08
Aug
-08
Sep
-08
Oct-
08
No
v-0
8
Dec-0
8
Jan-0
9
Feb
-09
Mar-
09
Ap
r-0
9
100
90
80
70
60
50
40
30
20
10
15,000
14,000
13,000
12,000
11,000
10,000
9000
8000
7000
6000
5000
4000
3000
2000
1000
TSX-V TSXAmount Raised $
Total Capital Raised (in $000,000)
June 2009
Please visit www.canadianfinancing.comto subscribe to our upcoming “Focus on Uranium”
Please visit www.canadianfinancing.com to subscribe to our upcoming “Focus on Uranium” For more information about the Canadian Financing Bulletin contact us at 1-800-504-3588 or [email protected]
Development Total
Exploration Total
Other
2006
2007
2008
2009
17.66%43.36%
38.30%
21.34%59.45%
84.91% 10.87%
4.22%
19.21%
38.23%
38.98%
23.47%
% of Money Raisedfor Exp. & Dev. ‘06-’09
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