Uranium's Crystal Ball Price Is Sobering

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RCR's principal, John Wilson, said global equity markets remain volatile and investor sentiment cautious and this has seen the junior end of the resource sector "disproportionately negatively impacted."

The industry average long-term uranium price has been downgraded $US15/lb by RCR's just-released quarterly Equity Research Report from its third quarter report to $US80/lb and saying that in the current quarter it will trade between $US50-65/lb.

At the time the report was released the spot uranium price was $US55/lb.

RCR's principal, John Wilson, said global equity markets remain volatile and investor sentiment cautious and this has seen the junior end of the resource sector "disproportionately negatively impacted." "A number of companies are trading below their cash backing and we expect smaller cap public companies to continue to face funding challenges," he said.

Expanding on a developing scenario in the June quarter, Wilson said there is likely to be increasing pressure on smaller companies to joint venture projects or merge.

Uranium fund sentiment and activity remain important factors in the outlook for the spot uranium price with holdings of around 20 M lb of U308.

The market valuation of Australian companies with one or more uranium projects is down 11% over the past month and down 44% over the past 12 months.

This compares with a selection of Canadian companies with one or more uranium projects, down 25% over the past month and down 57% over the past 12 months...

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