TradeTech’s Nuclear Market Review (NMR) reported a price increase in the spot uranium market in its Friday edition report after sixteen weeks of falling or stagnant prices. The Uranium Spot Price Indicator was raised to $78.00 per pound U3O8.

The recently sleepy uranium market may be poised for a comeback. Not only did demand emerge in the spot uranium market, but also in the long-term uranium market, the conversion market and in the enrichment market. In the long-term uranium market, one US utility is seeking proposals to deliver 3.6 million pounds U3O8 equivalent, which is in addition to the existing demand of 20 million pounds U3O8 equivalent.

Four transactions for uranium in the spot market occurred this past week, for a total of 800,000 pounds U3O8 equivalent. New demand was a factor in the price increase, along with sellers having liquidated material they had needed to sell for cash flow purposes. NMR editor Treva Klingbiel reported, "Sellers, sensing that the market has reached an inflection point, are cautiously moving their offer prices up."

Why would a company want to buy a property with a demolished uranium mill that had to be decontaminated and then rebuilt? And without solid in-place financing plans to do so? The answer is actually quite simple. The mill site has a NRC license, which is to be transferred to the new owners, Uranium Resources. This shaves years and many potential headaches off of the process of securing an operational conventional mill for the processing of uranium ore near the Grants Mineral Belt.

In addition to the mill site, Uranium Resources also acquired with its acquisition of Rio Algom from BHP Billiton an estimated 20 million pounds of uranium, water rights to the NRC licensed mill site at Ambrosia Lake, and a separate licensed mill site near Moab, Utah.

In return, Uranium Resources has agreed to pay BHP Billiton $110 million in cash and an additional $16.5 million upon receiving a license from the NRC to construct and operate a uranium mill. According to its official news release, Uranium Resources will also "assume certain retirement benefits and reclamation liabilities of which up to $35 million will be pre-funded at closing."

This strategic and fundamental acquisition by Uranium Resources is virtually guaranteed to incite interest from all potential uranium miners in the area. Uranium Resources hopes to gain partnerships to assist in the financing of the new mill. The size of the mill is dependent upon the demand in the area for milling services, yet to be determined. Uranium Resources envisions the new mill could process from 3 thousand up to 8 thousand tons a day, substantially more ore than the former mill processed.

Uranium Resources's acquisition of the former mill site and NRC license will understandably remove some of the uncertainty regarding conventional milling of uranium in New Mexico. As the mill plan progresses, so too do we expect heightened interest in conventional uranium mining in New Mexico.