Alex Welsh of Mergermarket reports on the potential for consolidation in the uranium industry.
The uranium market is ripe for a wave of consolidation, according to industry players. George Bush's State of the Union address reference last week to "America's addiction to oil," is only the latest indication to uranium producers who already see an opportunity to capitalize on a perceived increase in demand.
According to Kevin Bambrough, market strategist with Toronto-based hedge fund Sprott Asset Management, the market already has a need for more players. "There are only a few large cap uranium plays, and investors are looking for a way to diversify their holdings in the category, so as it stands there is room for more large players in the market."
. . . "I would say that most of the known historic deposits of quality have now been acquired so mergers will be necessary for many if they wish to expand on their resource bases. Some companies may find it cheaper to buy someone else to acquire known resources rather then engage in high-cost, high-risk exploration," Bambrough explained.
. . . "We don't see very much that could dampen the upward pricing trend for uranium, not to mention the movement toward consolidation - barring a major discovery of size," Bambrough said.
The uranium market is ripe for a wave of consolidation, according to industry players. George Bush's State of the Union address reference last week to "America's addiction to oil," is only the latest indication to uranium producers who already see an opportunity to capitalize on a perceived increase in demand.
According to Kevin Bambrough, market strategist with Toronto-based hedge fund Sprott Asset Management, the market already has a need for more players. "There are only a few large cap uranium plays, and investors are looking for a way to diversify their holdings in the category, so as it stands there is room for more large players in the market."
. . . "I would say that most of the known historic deposits of quality have now been acquired so mergers will be necessary for many if they wish to expand on their resource bases. Some companies may find it cheaper to buy someone else to acquire known resources rather then engage in high-cost, high-risk exploration," Bambrough explained.
. . . "We don't see very much that could dampen the upward pricing trend for uranium, not to mention the movement toward consolidation - barring a major discovery of size," Bambrough said.
