Uranium stocks soar as Aust, China signs safeguards deal
April 03 2006, 12:42AM
Australian uranium stocks continued to fire up today as the federal government finalised agreements with China that will allow for the eventual export of uranium to the Asian giant.
Most stocks in the sector have gained in the past week and a half in anticipation of the signing.
Patersons securities analyst Alex Passmore said the uranium sector has had a good run.
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"It has been a very exciting couple of weeks in the uranium sector," he said.
"The investment community seems to be factoring in upside for many uranium cases very early on."
The deal with China is expected to underpin a massive growth period of the uranium industry in Australia, which currently has just three mines.
Federal Resources and industry minister Ian Macfarlane has said it was unlikely the Chinese would start taking uranium from Australia until 2010.
But Mr Passmore said this would allow the junior companies with exploration projects time to develop them into mines.
One of the best performing stocks has been Oxiana's uranium spin off, Toro Energy, which was up 25 cents to $1.275 at 1237 AEST.
Toro, which is hunting for uranium in the Gawler Craton in South Australia, listed on the Australian Stock Exchange on March 24 at 86 cents after its shares were issued at 25 cents.
Mr Passmore said it was possible the market was overheated, with investors betting that states such as Western Australia will change laws to allow uranium mining.
"It is definitely a long term issue and people will continue to look at uranium as a potential energy source," he said.
Energy Metals, which has two exploration projects in the Northern Territory and six in Western Australia, was up 14 cents to $2.35 at 1225 AEST, having risen 44 cents since March 24.
West Australia premier Alan Carpenter has said the state government won't change its anti-mining stance on uranium, despite the federal government backing the export of the commodity.
At 1231 AEST, Summit Resources, which has a uranium project in northwest Queensland, was up 12.5 cents to $1.395 - the stock has risen 31.5 cents since March 24.
Curnamona Energy, which is exploring for yellowcake in the Curnamona Craton in South Australia, was up three cents to 66 cents and its shares have risen 48 cents since March 24.
http://www.tradingroom.com.au/…f_060403_124200_8798.html