U.S. News

UraMin Jumps as Plans Strategic Review of Assets


Africa-focused uranium miner UraMin said it would carry out a strategic review of its assets because of recent consolidation in the sector, sending its shares up 9% on Monday.

"It looks like they're putting themselves up for sale ... this statement is a big flag to anyone else in the sector to say come and have a look at us," said one dealer.

"It's a hot sector at the moment with oil and gas having calmed down, uranium is the buzz word right now," he added.

Last week, Canadian miner Uranium One said it would acquire smaller Canadian miner UrAsia Energy to form a global group with a market size of $5 billion.

With an increase in nuclear reactors using uranium as fuel, prices for spot uranium have more than doubled over the last year to $75 per pound, up from around $7 in 2000.

UraMin said it had retained BMO Capital Markets to evaluate its mineral assets as part of the strategic review and to advise it as it moves from development to commercial production.

"UraMin is aggressively moving forward on all three of its large near-term production projects," Chief Executive Ian Stalker said in a statement.

The shares gained 9.2% to hit a high of 262p in London, valuing the company at around 562.8 million pounds ($1.1 billion).

This tracked gains of 12% in Canada on Friday under its listing on the Toronto Stock Exchange.

UraMin's main asset is its 100% owned Trekkopje project in Namibia on which a feasibility study is expected by the end of this year.

The company is expected to publish an interim study, looking at the cost of the project, before the end of the month, according to an analyst who covers the stock.

Trial production of 500,000 lbs a year is expected to start at the end of this year and full production of 3 million lbs by the end of 2008, the analyst said.