An interesting post from @Fingers xed Until recently it was a...

An interesting post from @Fingers xed



Until recently it was a toss up between the gold bugs and uranium windbags who were locked in a competition to see who could clear the room quickest.
Gold bugs, of which they are many, believe that (a) the world's central banks are manipulating the gold price, or (b) there's a syndicate of commercial banks manipulating the price, or (c) there's a global conspiracy of super-rich investors manipulating the gold price.
The uranium cheer squad reckon the world is still desperately keen on nuclear power which must means that the uranium price is poised to reclaim the high ground of 2007 when it rocketed past US$130 a pound -- before crashing back to $20/lb.
Attend any mining conference and you are assured of getting an ear full from a someone who believes gold and/or uranium are dramatically undervalued.
The trick in those situations is to have an escape route, such as an urgent need to speak with someone on the other side of the room, or a sudden urge to use the lavatory.

Gold bugs, sadly for them, remain under pressure as US interest rates ratchet higher. The best they can hope for is a market-disturbing crisis, such as a monetary collapse in Europe or a breakdown in attempts to ease the nuclear crises in Korea and Iran.
Something could happen to drive gold higher, but while we wait for that something there actually does appear to be a sea-change underway in the uranium market.
After almost 10 years in the sin bin, uranium could be attracting enough support to make a significant and sustainable upward price move, an observation which will hopefully not trigger a flood "told-you-so" emails from uranium bores.
But, if you switch your mind to "open" you will see a number of interesting uranium events, including:

• The short-term price adding another 60c/lb late last week to trade at $23.25/lb, its highest since January.
• Uranium-mining hopeful Bannerman Resources getting knocked-down in a stampede of institutional investors keen to buy a piece of its A$8 million capital raising, and
• A new London-based investment fund called Yellow Cake which has a surprising connection to Australia setting out to buy 8.1 million pounds of uranium oxide (U308) in the belief that the market for uranium is "mispriced".

Interesting as the short-term price rise might be it is not the best guide to what's happening in the nuclear fuel sector where most uranium is sold under medium and long-term contracts.
However, a rise is a rise and the short-term price does appear to have found a bottom thanks to the twin effects of steady demand from the fleet of installed reactors and the commitment of some countries, such as China, to a power-future that features a reasonable nuclear contribution.
The situation with Bannerman is another pointer on the road to a uranium revival because while the small Australian company has a long way to go before committing to the development of its Etango project in Namibia the injection of fresh funds will enable it to make progress with a definitive feasibility study.
The Yellow Cake fund is, from Dryblower's view, the most significant development in uranium for some time because it serves a number of purposes, such as soaking up spare material, as well as demonstrating that some well-connected people believe it is still possible to make a profit in the uranium business.
Looking awfully like the Canadian cobalt specialist Cobalt 27, which has amassed an eye-catching 2980 tonnes of cobalt as well as management of eight cobalt-linked royalties, the London-based Yellow Cake is reported to be seeking up to US$200 million buy 8.1 million pounds of uranium, mainly from Kazakhstan's uranium business, Kazatomprom.
According to a report in London's Financial Times newspaper Yellow Cake has been negotiating an option with Kazatomprom, the world's biggest uranium producer, to buy an additional $100 million worth of uranium for the next nine years.
But, it's when you scratch the surface of London's Yellow Cake that you find something almost as interesting as the game it is playing in uranium and that's the identity of two directors:

• Alan Rule, a former director of uranium miner, Paladin Resources, and
• Alexander Downer, Australia's longest serving Foreign Minister and recently retired High Commissioner in London.

Yellow Cake's website is currently closed to anyone based in Australia, and a few other countries, for what are said to be regulatory reasons, presumably because a fund-raising is underway.
But, when the curtain is lifted on Yellow Cake and its high-powered board, which is led by Anthony Tudor St John (also known as The Lord St John of Bletso), there could be a surge of interest by investors in uranium.
The fact that Downer has tossed his hat into the uranium ring could be linked to his roots in South Australia, centre of Australian uranium mining, but it could also be another sign that the uranium tide really is turning.