Source: Ross McElroy for The Energy Report 03/23/2017
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With uranium up 40% off last year’s lows, a glimmer of optimism is returning to the uranium market, says Fission Uranium’s President, COO and Chief Geologist Ross McElroy. In this interview with The Energy Report, McElroy discusses the company’s latest drill results, its winter drilling plans and why he believes Fission could be on the cusp of a major discovery.
The Energy Report: Uranium hit lows this summer before recovering somewhat, although the uranium price is still well below the highs of several years ago. Would you discuss the fundamentals for uranium and your predictions for the price over the next several years?
Ross McElroy: We saw the spot price of uranium hit a multiyear low of about $18 per pound ($18/lb) in late November/early December 2016. But we’ve also seen, in the short period from the beginning of December up until currently in March, the spot price recover to close to $25/lb. That represents a price increase of about 40% over just a few months. Of course, $25/lb is still a very low price.
At the low end, the major low-cost producers, primarily the Kazakhstan producers and Cameco Corp. (CCO:TSX; CCJ:NYSE), one of the world’s largest uranium producers, sent signals to the market—by reducing low-cost production and shutting in higher-cost production—that they’re not selling uranium any cheaper than that. Those are among the lowest-cost producers worldwide. It has gotten to a point where even they can’t make any money. There’s no profit margin left, even for those with the lowest cost production.
I think that we’ve seen a bottom in the price of uranium. When we look at the costs of production around …read more