Aldershot Resources Ltd (Trading symbol “ALZ” on the TSX Venture Exchange) is a Canadian based company focused in uranium/vanadium exploration with Projects in Australiaand Zambia and an active global Project generation program.Aldershot has an experienced Board and Senior management team with over 20 years Uranium exploration experience primarily in Australia.
Uranium Demand Set for Rebound
The uranium market took a big hit in 2011 due to the aftermath of the Fukushima nuclear power plant disaster in Japan. Spot prices for uranium fell from 70 USD to 50 USD in a very short time as 14 nuclear reactors were permanently closed across Japan and Germany.The largest uranium producer in Canada, Cameco, saw its shares drop by 48 percent over the course of the spring and summer. However, other Canadian uranium mining and exploration companies are leading the uranium industry to a position of market reemergence. Demand for uranium is expected to increase as the world’s energy production gets back on track after world leaders begin to recognize the indispensability of nuclear energy.
One company leading the way into a new era of increased uranium demand is Aldershot Resources Ltd. Aldershot Resources is based in Canada, but the company’s uranium projects are primarily located in Australia, Zambia and the United States. Aldershot Resources’ production is set to meet the demand for uranium expected over the next several months and years.
While 2011 saw the closing of more than a dozen nuclear power plants, three times as many plants are currently under construction in developing nations that will require uranium-based fuel. The only short-term obstacle in rising prices on the uranium market is the inventories that were being held for the energy plants now closed are reentering the market. This inventory is expected to be sold quickly to operational plants, and then, uranium demand will begin to increase.
The short-term lowering in uranium prices by the excess inventory presents a perfect opportunity for investors to get into the rebounding market at record-low prices. The 27 nuclear reactors under construction in China and several more around the world will ensure the longterm prospects of uranium will remain unchanged from forecasts made before the March 2011 tsunami.
The recent nuclear power plant closings in Germany and Japan may be receiving a lot of media attention at the moment, but this setback has no affect on the longterm demand for uranium. Recently, the CCO of Rio Tinto Energy in the United Kingdom was quoted as saying the long-term uranium forecast “is all about China. The only country that is not buying uranium at the same rate [as before Fukushima] is Japan.”
China suspended approvals for the construction of new power plants after the Fukushima disaster, pending a nationwide safety inspection. This inspection was completed in August, one month ahead of schedule, which means China is set to resume approvals. The 27 nuclear reactors being built in China represent 42 percent of global nuclear reactor construction. In addition, Russia and India are constructing 16 new nuclear power plants between them.
The impact of the disaster on the supply of uranium required by the world is negligible. The deputy director-general of the World Nuclear Association (WNA), Steve Kidd, said in an interview, “The worst impact so far has been on share prices and spot prices, not material cutbacks.” The share prices and spot prices are expected to increase once the momentary panic has passed and world governments realize they need uranium to keep up with their growing energy demands, which have increased after the emergence from the recent worldwide recession.
The forecasts for the uranium market remain positive, but they have been muted as companies such as Aldershot Resources quietly wait for the negative sentiment about the nuclear energy industry to pass. One mining analyst working for Versant Partners explained, “We view the current scenario as the point of maximum pessimism for nuclear and the uranium industry.” The uranium industry has nowhere to go but up over the longterm.
The positive longterm forecasts are primarily due to the fact that the fundamental energy needs of the world remain largely unchanged. In 2010, the world had 442 nuclear reactors in operation that required over 68,000 tons of uranium. That year, production was just over 53,000 tons. Uranium demand was only met through the use of recycled uranium extracted from decommissioned nuclear warheads in Russia. This program is very expensive to maintain, and it is not expected to be renewed when the current contract ends in 2013. This only means that increased uranium production will become necessary to meet world demand.
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