Sxr Uranium One looks for further consolidation, U.S. mine expansion
Sxr Uranium One Inc. (TSX:SXR) is looking to scoop up more of its rivals as part of an aggressive plan to produce 19.4 million pounds of uranium annually by 2012, says CEO Neal Froneman.
“We’re now well positioned to do further consolidation,” Froneman told an international mining conference Wednesday. “I’d like to assure you, this is not the end-game.”
Froneman said Sxr, which last month announced an agreement to take over UrAsia Energy Ltd. (TSX:UUU), is now looking at prospects in the United States, where it has become profitable to develop uranium deposits since prices have shot so high.
Froneman forecasts Sxr’s production will hit 7.5 million pounds in 2008.
“We believe in uranium a lot more than some of the guys who have been in the industry longer,” he said, predicting that global demand will exceed supply by 200 million pounds in 2015.
“That is a very significant difference. That is, of course, what drives the price up.”
Sxr and UrAsia’s combined market capitalization is about $5 billion, based on current uranium prices, he said.
“We’re essentially a large company with a very strong balance sheet.”
Bill Washington, an analyst with Wellington West Capital Markets Inc., endorsed expectations that demand for American uranium properties will be increasing as prices spike.
“The value for these U.S. assets is going to rise over the year,” Washington said, noting Sxr is competing with Paladin Resources Ltd. (TSE:PDN) and Denison Mines Corp. (TSE:DML) to be the next big thing.
“You can see they are fighting hard against each other,” Washington said.
But skyrocketing uranium-company shares – Sxr’s stock price has doubled in five months – are puzzling Washington, who wonders how long the party will last.
“This is a market gone crazy, and yet it’s continuing to attract retail buyers.”
Sxr traded Wednesday afternoon at $16.34 on the TSX, up 59 cents on the day, with a 52-week high and low of $18.65 and $7.17.
Information from: www.canadianbusiness.com
