Today, Uranium surpassed the mythical $100 per pound level based upon continued supply concerns. Apparently one of Australia’s largest uranium mines was partially flooded, reducing the potential for supply into the market. Just six months earlier one of Canada’s largest mines – the Cigar Lake uranium mine, which was expected to produce about 15% of the global supply in 2008 was forced to delay production until 2010!

For the last 30 years, ever since the “Three Mile Island” and the Chernobyl events, the nuclear power industry has been in the gutter. Now with increasing demands for energy, nuclear power is stepping into the limelight. A growing percentage of the world’s power is supplied by Nuclear energy – more than 16%

There are 440 nuclear reactors operating, and amazingly another 160 are under construction – mostly in China and throughout Asia. Currently demand for uranium ore is just under 200 million pounds with current production about half of that!

Just think, worldwide, we need about 200 million pounds but only produce about 100 million - of course the price is going to go up! And these production numbers don’t even account for the new reactors under development! In the United States alone, the demand for Uranium is about 50 million pounds a year – however, we produced only 2 million pounds of uranium in 2006.

TXU, as an aside, recently announced plans to scrap eight coal-fired power plants to be replaced with . . . you guessed it, nuclear power plants! And on top of that, the 2005 energy bill contained a tax break to streamline approval processes for new reactors.

This has clearly lead to a huge surge in mining and exploration companies searching out uranium deposits, and uncovering long mothballed mines. The opportunity for these companies to deliver high quality Uranium ore to the markets is potentially very lucrative, and with the time it takes for newly discovered mines to enter production, I would expect to see uranium prices remain at or above the $100 per pound level for several years.