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Resource Capital Research – Uranium Sector Review, June Quarter 2010

Wednesday, June 30th, 2010

Resource Capital Research an equity research company which focuses on small and mid size resource companies, today launched its major quarterly research report covering 17 global uranium exploration and development companies.
The quarterly report typically reviews companies listed in Australia, Canada, USA and UK and active in established uranium districts globally, including Australia, Canada, USA, Argentina, Peru, Mongolia, Zambia, Tanzania, Niger and Namibia.
Key Points:
Uranium Market:
• The uranium spot price is currently trading at US$40.75/lb, down 1% from 3 months ago (US$41.25/lb).
• The Fund Implied Price (FIP) is US$40.50/lb, which compares with US$46.00/lb Jan ‘10.
• Since April 1, 2010 the FIP has traded in a range of ~US$35/lb to ~US$46/lb, with the low of US$35/lb coinciding with equity market weakness in April.
• The long term contract uranium price is US$58.00/lb. It is down from US$61/lb Jan ‘10.
• There are 496 new nuclear reactors planned or proposed globally as of June ’10.
• Kazakhstan ISR production reached 36mlbs U3O8 in 2009 up 62% from 2008 levels (22mlbs) and is forecast to reach 47mlbs in 2010.
• With low cost production forecast to rise to 78mlbspa U3O8 by 2018, Kazakhstan’s mine supply growth is expected to exert further downward pressure on the global sector near/mid-term cash cost curve.
Uranium Companies:
• The Merrill Lynch Uranium Equity Index (a basket of uranium equities) is up 6% over the past month, down 15% over 3 months and down 16% over the past 12 months.
• The market valuation of Australian companies with one or more uranium projects is down 4% over the past month, down 16% over the past 3 months, and up 48% over the past 12 months.
• This compares with Canadian companies with one or more uranium projects, down 2% over the past month, down 15% over the past 3 months, and up 29% over the past 12 months.
To access the free summary report or to purchase the complete 94 page comprehensive report, go to www.rcresearch.com.au/reports. RCR also publishes gold, iron ore, and tin-tungsten sector reports.
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