urg::: Equity Report on Global Uranium Companies

Len Kanaar - FoE Sydney suscon at foesyd.org.au
Fri Sep 2 07:58:34 EST 2005


Market Wire (marketwire.com)

Equity Research Report Published on Global Uranium Companies

SYDNEY, AUSTRALIA -- (MARKET WIRE) -- 09/01/2005 -- Resource Capital 
Research, an equity research company which focuses on small resource 
companies, today launched a major quarterly research report covering 
20 global uranium exploration and development companies with a focus 
on Australia, Canada and the US. Over 120 junior and mid cap 
explorers and development companies are identified with a total 
market capital exceeding US$4.2 billion.

The report reviews companies active in established uranium districts 
globally, including the Gawler Craton (Olympic Dam Uranium Mine) and 
the Frome Embayement (Beverley and Honeymoon) in South Australia, 
Arnheim (Ranger, Jabiluka) to Westmoreland in northern Australia, the 
Athabasca Basin in Canada (McClean Lake, McArthur River), the Damara 
Orogen, Namibia (Rossing, Langer Heinrich) and the Great Divide Basin 
in Wyoming, USA.

To access the free summary report go to 
http://www.rcresearch.com.au/feature. To purchase the complete 
68-page detailed report titled "Uranium Sector Review" please email 
johnwilson at rcresearch.com.au

--  Advanced exploration and development stage companies have yielded most
     consistent share price outperformance
--  Existing producers and development phase companies can take advantage
     of the stronger uranium price
--  Common exploration strategy to reduce risk is to explore in the
     vicinity of known deposits
--  Demand for uranium driven mainly from the power generation sector is
     forecast to outstrip supply for at least the next ten years,
--  Uranium prices have recently tripled to around $US 30/lb
--  Supply is constrained by a lack of new mine production and declining
     inventory
--  Political change is afoot globally


John Wilson, author of this report noted:

"After nearly 25 years in the doldrums, the uranium industry is 
undergoing a major resurgence worldwide with uranium exploration and 
property acquisition at a high level. The share prices of companies, 
many of them newly formed, with uranium assets have moved sharply 
upwards."

Advanced exploration and development stage companies have generally 
had the most consistent share price outperformance within the uranium 
sector in the past 12 months, such as Paladin (+760%), Aflease Gold 
and Uranium (+204%), Energy Metals Corp.(+368%), Western Prospector 
Group (+757%), Laramide Resources (+735%) and Summit Resources 
(+1160%).

More mature companies will be able to take advantage shorter term of 
the stronger uranium price compared with exploration stage companies 
which are higher risk plays. ERA and Cameco are the key listed pure 
uranium plays, while BHP and RIO offer diluted exposure to key 
uranium mines.

The report covers US traded companies US Energy Corp, Fronteer 
Development Group (AMEX: FRG), CanAlaska Ventures (TSX-V: CVV), and 
Western Prospector Group (TSX-V: WNP).

Among the explorers, a common strategy to reduce risk is to explore 
in the vicinity of known deposits. To this end, in Australia, 
companies are exploring for palaeochannel style uranium 
mineralisation in the vicinity of In Situ Leach (ISL) projects at the 
Beverley Uranium Mine and Honeymoon in the Frome Embayement, South 
Australia. Examples include Giralia Resources, Curnamona Energy, and 
Southern Cross. Companies active in the US include US Energy, 
Strathmore Minerals and Energy Metals Corp.

US Energy is exploring around Sheep Mountain in WY, which was 
previously in production and has announced it intends to reopen its 
Shootaring Canyon Mill in Utah over the next 2 years. Energy Metals 
Corp is focusing on development stage ISL projects in The Great 
Divide Basin, WY. It has 16 properties with historical resources 
within a 25 mile radius of Rawlins. A number of the properties went 
through feasibility in the 1970s and some achieved commercial or 
pilot plant production. A project development scoping study is 
expected to be completed first quarter 2006. Strathmore Minerals' 
most advanced projects are at Church Rock and Roco Honda in New 
Mexico with potential for ISL development. It also holds land in 
Wyoming near Cameco's Smith Ranch Highland's projects and Cogema's 
Christenson Ranch.

Almost 20 years have elapsed since the end of the last uranium 
exploration boom. In that time there have been many technological 
improvements that impact directly on the methodology of uranium 
exploration. Some of the key developments include multi element 
chemical analysis, aerial gamma ray, aerial magnetic mapping, 
hyperspectral mapping, gradient gravity and electromagnetic surveying.

The recent tripling of uranium market prices to around $US 30/lb is 
due to the decline in existing uranium fuel inventories plus a 
burgeoning demand from new international markets to satisfy nuclear 
power demand.

Demand for uranium is forecast to outstrip supply for at least the 
next ten years, driven by end users in the power generation market 
which is urgently trying to secure future supply. Much of the new 
demand for uranium will come from expanding nuclear power 
requirements of developing economies with 130 new reactors expected 
over the next 15 years (IAEA), representing nearly a 30% increase in 
reactors globally. China has announced plans to build 27 new nuclear 
reactors by 2020 and India has announced plans to build 17 new 
nuclear reactors by 2012. This rate of expansion compares with the 
USA which built over 100 nuclear power plants in 15 years between 
1965 and 1980.

Supply is constrained by a lack of new mine production and declining 
inventory. World demand for uranium is about 77,000 tonnes per year 
(169 million pounds) while mine production is currently 48,000 tonnes 
per year (106 million pounds). The balance, 29,000 tonnes per year 
(64 million pounds) comes from inventory -- primarily the down 
blending of weapons grade uranium. Mine output is expected to 
increase to 54,000 tonnes per year (119 million pounds) over the next 
3 to 5 years, leaving a significant supply gap to be filled.

Political change is afoot globally with governments speaking out in 
favour of uranium as a fuel source. There is a strong trend for 
government policies to prevail in the face of dissenting viewpoints.

Australia is scrapping the ban on uranium exports to China. Ian 
Macfarlane, Federal Resources Minister will allow new uranium mines 
in the NT, and has urged the governments of Western Australia and 
Queensland to review bans on uranium mining. An inquiry is underway 
by the House of Representatives Industry and Resources Committee into 
non-fossil fuels.

The USA is lifting restrictions on nuclear power in India. It has 
extended licenses for existing nuclear power plants. There is a more 
supportive environment for new licences with incentives for nuclear 
power in the new Energy Bill.

In Canada, British Columbia has lifted its ban on uranium exploration 
and development. Ontario has committed to closing coal plants and 
reopening select dormant nuclear plants.

"It is expected that there will be an expansion of uranium resources 
from new discoveries and the upgrade of historic resources over the 
next few years driven by investment funding, innovative exploration 
techniques against a background of new political support of mining 
opportunities in the USA and Australia to respond to increased 
international demand from nuclear power generators," Mr Wilson 
concluded.

About Resource Capital Research

Resource Capital Research (RCR) (www.rcresearch.com.au) was founded 
in 2004 and is based in Sydney. RCR provides investors with in-depth 
reports on current investment opportunities in the mining sector both 
in Australia and globally. We focus on small resource companies, 
ranging from exploration stage, through development and production. 
John Wilson the principal of the firm and analyst has eight years 
experience analysing mining companies. He worked in Sydney and on 
Wall Street for major investment banks.

The report is available at www.rcresearch.com.au. The next uranium 
sector review will be published in the December quarter.

For further information please contact:
John Wilson
Analyst, Resource Capital Research
Phone: (61- 2) 9252 9405
Email: johnwilson at rcresearch.com.au







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