Uranium prices remain close to multi-year low levels as the market remains oversupplied. However, the mid-to long-term fundamentals of the uranium market remain solid.
Uranium prices came under pressure after the March 2011 nuclear power plant accident in Japan. Back then prices were around $70 per pound. However, the accident at Fukushima led to the shutdown of all nuclear reactors in Japan.
Over the last two years though, the outlook for the uranium market has improved considerably. This is because of anticipated strong demand from countries like China and India. Both countries see nuclear as an important part of their energy mix.
Indeed, both countries have been looking to become energy independent and nuclear energy will play a major role in achieving this goal. Apart from China and India, the restarting of some of the nuclear reactors in Japan has also improved the outlook for the uranium market.
On the supply side, years of depressed prices have meant that miners have not invested much in new projects. Analysts
believe that the market will move into a deficit as early as 2018 as a result of this under investment in the past few years.
The robust future outlook for the uranium market augurs well for miners such as Plateau Uranium Inc. (TSX-Venture: PLU). Based in Toronto, Plateau Uranium focuses on the exploration of its properties on the Macusani Plateau in southeastern Peru.
The company controls all reported uranium resources known in Peru and mineral concessions that cover over 910 square kilometres situated near significant infrastructure.
PLU shares are moving higher in trading today. At last check, the stock was trading 5.71% higher at $0.370 on volume of 236,494, which is nearly 8 times the daily average volume of 30,221.
PLU shares are gaining momentum in trading today after the company announced a maiden lithium mineral resource estimate within four of its uranium deposits located on the Macusani Plateau in the Puno District of southeastern Peru, as well as results of initial unoptimized metallurgical tests displaying positive Lithium extraction and recoveries.
Ted O’Connor, CEO at Plateau Uranium, said that although PLU is a uranium-focused company, recognizing the presence of lithium and establishing this large initial lithium resource within only a small subset of our defined uranium resource base is significant.
O’Connor further said that lithium has the potential to add substantial value to our already robust uranium project as a prospective by-product following uranium extraction.
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