By Michael Allan McCrae
Investors considering uranium should take heart from gold's turn after the yellow metals ressurection off of last year's lows, says Dev Randhawa, Chairman and CEO of Fission Uranium (CVE:FCU).
“Right now people are scared to be in uranium, but that’s where they should be,” says Randhawa who spoke to MINING.com at the Sprott Natural Resource Symposium in July. Fission Uranium is an exploration company working on projects in the Athabasca Basin.
"The state of the uranium market is very bad right now. If we were having the same conversation about gold last year—how bad gold is, it’s never coming back and all the doomsayers were saying it was going to $500/oz. And what do we have today?"
Gold companies are up this year. Goldcorp is up 38% year to date to $16.02 and Newmont Gold is up 125% to $40.52. Meanwhile, uranium companies are being pummeled. Industry leader Cameco is trading at $9.30, near its 52-week low. The company has lost a third of its value in the past year.
Randhawa says utilities have built up large inventories due to shut downs after Fukushima nuclear disaster. Demand remains low while utilities work through built up stockpiles.
"When this market turns it will be a lot of fun again, but right now spot prices are low because utilities are not in the market."