Tuesday, May 8th, 2007
Uranium Spot Prices Surge to New Records
By Keith Kohl
Baltimore, MD--Uranium has been white hot recently. But will yellowcake's future turn out just as profitable for us as the last few years have been? The easy answer--absolutely! The demand for uranium is going to skyrocket due to the soaring nuclear industry.
I know you've thought about it before, "Just how far can the uranium bull run before being corralled?"
The notion has entered my mind a few times too.
I mean, growing over 1500% in seven years is astronomical. In fact, I've read more than a few of your concerns that $113 per pound was end. Certainly a correction was yesterday was in the stars.
Not this time.
On Monday, the weekly spot price for uranium has surged again, this time reaching $120 per pound!
Yet that record breaking price level is still trivial compared to where uranium will be in the future.
Last month, I pointed to the soaring growth of nuclear energy to drive demand. Let's face it, with over 158 nuclear reactors being built in our nearby future, producers can expect a huge demand for their uranium.
Here's the thing, uranium only constitutes roughly 5% of a nuclear plant's budget. So they can afford to pay a hefty price, even if prices were five times their current levels.
And uranium has an even brighter future.
Here's why...
Advertisement
It Turned $20,000 into $800,000 Within 2 Years
It's become the hottest stock market on the planet - responsible for some of the largest new wealth creation in this decade.
Over the past five years, it's absolutely crushed every major index. I'm talking about 8 times the returns of the Dow, NASDAQ and S&P 500. And right now three companies trading on this exchange have the potential to - once again - turn $20,000 into $800,000 or more.
What is this "secret" exchange? And what companies stand poised to skyrocket?
Click HERE for your free report
--------------------------------------------------
The world is not producing enough uranium. Producers are only supplying just 74% of the total global demand!
And trust me, the supply picture is going to get worse within the next decade. Forget for a second that Cigar Lake won't be back into production for another few years (assuming it ever does come back).
Let's focus for a second on the place we are currently getting our uranium.
You see, ever since the 90's, the U.S. has been buying uranium from Russia through the U.S.-Russian Highly Enriched Uranium (HEU) Purchase Agreement.
Russia had to do something with the 30,000 nuclear weapons they developed during the cold war, right?
The highly enriched uranium extracted from their nuclear weapons can be blended into low-enriched uranium (LEU). The LEU can then be used at commercial nuclear power plants in the U.S.
How much uranium can they possibly get?
Under the agreement, roughly 500 tons of HEU are blended down and sold. But the Russians can only blend about 30 tons per year. Furthermore, the deal will expire in 2013. If it isn't renewed (as many experts feel) the U.S. will have to look elsewhere for uranium.
But what does that mean for us?
As you know, the U.S. generates 20% of its electricity from nuclear energy. I've already pointed out how that is about to grow with the addition of new power plants.
Now take into account the fact that those plants receive half of their nuclear fuel from those Russian nukes.
Think about that for a minute.
In six years, our nuclear plants are going to scrambling to find a new source of uranium. Also remember that it can take years for new uranium mines to begin production.
That's why I love the small uranium mining companies. With the right management and a solid list of properties, the opportunity is there to make a fortune. Click here for a chance to get in on some of these uranium plays.
Everyone has been waiting for a correction in the weekly spot price of uranium at $120 a pound. And we probably will experience that correction before the end of 2007. But even with a correction on the horizon, we're going to see uranium repeatedly break record prices in the future.
On Thursday, I'm going to delve into the new spot market for uranium on the NYMEX-where spot prices are trading over $140. More importantly, we're figure out what this new market is going to mean for us.
Until next time,
Keith Kohl