Uranium prices recently dropped to an 11-year low. Uranium prices have failed to take off despite the outlook on the uranium market turning bullish since late 2014.
After a decade long rally that saw prices climb to record levels, uranium prices tumbled in March 2011 following the Fukushima nuclear power plant accident in Japan. Post the accident, Japan shut down all of its nuclear reactors, hurting demand for uranium. The sudden drop in demand came at a time when supplies were at an all-time high.
The weak fundamentals pushed uranium prices 50% below March 2011 levels.
The outlook for the uranium market began changing in the summer of 2014 by turning bullish mainly because of anticipated strong demand from the likes of China and India. Japan’s decision to gradually restart its nuclear reactors also lifted sentiment. Analysts expect the uranium market to turn into a deficit as early as 2019. Despite the bullish outlook, prices have so far failed to take off.
One reason is that utilities, which are due to sign long-term contracts, have stayed on the sidelines. As long as long-term contracting activity remains slow, prices are expected to struggle. However, long-term fundamentals for the uranium market are still strong.
Anfield Resources Inc. (TSX-Venture:ARY) is a Vancouver-based resource company engaged in mineral exploration and development in the U.S. The company operates through the acquisition, exploration and development of mineral properties. ARY owns a portfolio of uranium assets, including Shootaring Canyon Mill, Velvet-Wood Project, Frank M Project and Findlay Tank Breccia Pipes.
The Shootaring Canyon Mill is located approximately 50 miles (over 80 kilometres) south of Hanksville, Utah. The Velvet-Wood Project is located in San Juan County, Utah. The Frank M deposit is located approximately 10 kilometers north of the Shootaring Canyon Mill.
This morning, Anfield Resources announced that it has acquired a substantial database of historical uranium exploration data covering large areas of the Colorado Plateau and Wyoming.
The company believes that the material will help with its plans for further exploration of the uranium resource identified in its review of the data. The database consists of approximately 200 boxes of maps, geological studies, prospects, drilling data, exploration reports, resource evaluations, and other strategic data. The data contains results from exploration and uranium development activities in New Mexico, Utah, Wyoming, Colorado and Arizona.
Corey Dias, CEO at Anfield, said the acquisition of this database will be an invaluable aid in identifying complementary uranium projects for development.
Shares of ARY have been on an upward trajectory since early this year, and picked up steam in mid-May when shares surged from about $0.07 to $0.25 in around two weeks. With this strong move higher, it is no surprise that shares have been in a consolidation period over the last two months.
With that said, the ARY chart is exhibiting an ascending triangle pattern (bullish pattern) with a key resistance level at $0.25. A move above this level could send technical traders in bullish mode in the short term.
