Uranium miners continue surge on demand expectations
Make us a preferred source
Make us a preferred source on Google
The news: ASX-listed uranium miners are among the biggest gainers in morning trading, building on yesterday’s massive share price boon following an investment raise announcement from the world’s largest physical uranium fund.
The numbers: Deep Yellow was the biggest gaining uranium stock at 11:07am AEST, having experienced a 4.1% share price increase to $1.64.
Boss Energy’s share price had also gained 3.7% to $4.50 while Paladin Energy’s share price gained 2.3% to $7.50.
Shares in the uranium miners surged on Monday. Deep Yellow posted a 21.2% increase, Boss Energy a 17.7% increase and Paladin Energy a 15.6% increase.
The context: On Monday afternoon the Toronto-listed Sprott Physical Uranium Trust said it would raise an additional USD100 million ($154 million) through an issuance of new shares above-market price.
Citi analysts said if all the investment goes towards purchasing uranium this would raise the spot price of the energy resource.
Although the raise is only equivalent to 1.43 million pounds of uranium, a small fraction of the total annual utility demand of more than 180 million pounds, the fuel is mostly supplied through term contracts, meaning Sprott’s investment would likely affect the thinly traded spot market.
As such, Citi analysts have retained their buy position on Boss Energy and Paladin Energy.
The source: Citi research
