U beauty

The U spot price has hit $113/lb – even higher than we thought it would reach. The average yob probably doesn’t have much idea of the significance of the U price crossing the magic $100/lb mark, but we’re willing to punt they soon will when the media kicks into gear next week. Suffice it to say that a year ago, the U spot price was $44/lb. So right now, we’re looking at a 157% price increase in that time.

Supply is short, demand is high. That means only one thing – the U price is going to continue to rise, and so will U stocks. Just about any U stock, in all probability. Some avid pundits are even contemplating an astronomical $1,000/lb spot price.

China has 100 nuclear reactors either proposed or planned. Russia’s energy goals call for as many as 58. Toward that goal, Russia recently announced it is tripling the amount of money it will spend on nuclear power between 2008 and 2010 to $5.7 billion.

In the US, there are 28 applications for new power stations from now till 2009.

If the predicted U bubble expands exponentially with a tidal wave of despo mums and dads, the weeks to come will be *very* interesting.

Will explorers prosper as much as near producers? After the Cigar Lake and ERA fiascos, perhaps producers aren’t as glamorous. At present, the U related explorers we hold are BLR, TRF, THX, THXO, NAV, GDN, SNU, SAU, KOR and NTU. In the main, these companies’ resources are located in U friendly provinces which will further benefit from the anticipated removal of the ALP three mines policy at the end of this month.

SNU floated last week, shooting from 20c to 50.5c giving us more than double on our IPO cheapies, then dropped back by close on Thursday to 41.5c. We bought more all the way down and will sit on them, waiting for it, with its Chinese investors and very promising South Australian ground, to do an NTU in the next year or so as interest and awareness of the environmental pragmatism of exporting U compared to dirty coal takes root and waste disposal issues are addressed rationally.

An operating nuclear power plant emits zero greenhouse gases. Every 1,000-megawatt reactor saves 3.4 million tonnes of coal a year … eliminates 34,000 tonnes of polluting sulfur dioxide … and stops 11,000 tonnes of nitrogen oxide from getting into our atmosphere.

A lot of people fear nuclear power because of radiation. Well, here’s the irony – Americans living near coal-fired power plants are exposed to higher radiation doses than those living near nuclear power plants!

That’s because coal is saturated with impurities, including uranium and thorium, as well as sulfur, mercury, arsenic and other poisonous heavy metals.

Over one million people die each year from air pollution caused by coal-fired power plants. That’s more than 100 people every hour. Thousands more are born with birth defects thanks to mercury poisoning from coal pollution.

SAU, along with 39% ownership of SNU, still has its CRE Northern Territory JV on its books, so we think it’s worth hanging onto for its U alone as well, let alone its ample gold tenements. Gold, however, which has been rising again toward its usual May spike, could be eclipsed well and truly.

In the short term, BLR will probably do the best of all, given its US Wyoming dirt close to an existing mill, and a JORC on the horizon. The share price showed positive movement last week, and the U spot price should now give it the nudge it needs to break well and truly upward.

Pleasingly, NTU held well after it went ex-rights, closing at $1.545. More to come here as drilling proceeds. THX is a wild card – with its mixed bag of glittering resources and the prospect of nickel production soon, anything can happen. GDN is about to break through to its gas/oil nirvana, and U is its second suit. TRF is already a winner with its rich magnetite nearly in the bag and U results expected any time. KOR is soon to have its 2 for 1 spin off – hard to tell how high it might go this week if the market becomes manic.