By Melissa Pistilli-Exclusive to Uranium Investing News

Although investment activity in the commodities and energy sectors has cooled over the last six months, there are several reasons why the fundamentals in the uranium market remain strong.  ”We expect the uranium market to remain fairly robust over the next few years, and to support a price of roughly US$60/lb,” said Desjardins Securities analyst John Redstone.

One of the fears circulating in the market is that the current global credit freeze will lead to a halt in nuclear reactor construction. Redstone points out that several of the ongoing nuclear programs responsible for ramping up reactor capacity are backed by government finance and less affected by the crisis, including those programs in China, India and Russia.  Programs in Japan and South Korea, he said, are “conservatively funded and should be able to proceed.”

Other worries involve concerns over the U.S. Department of Energy’s possible plans to sell off excess uranium flooding the market and rumours of rising production in Kazakhstan. Redstone, however,  argues that market fundamentals will not be disturbed as adjustments will likely be made.

The spot market price of uranium took a dive like most commodities after recession fears began to grow and hedge funds began selling off their holdings to cover losses. But, analysts forecast investor interest will soon return as the world looks towards alternative energy sources. “Uranium prices could recover faster if the investor segment rekindles its interest,” said Gene Clark, Trade Tech Chief Executive Officer.

In the face of a growing fossil-fuel pollution problem, China is taking a second look at its means of energy production and is already working towards nearly doubling its nuclear generating capacity. Currently, the nation has 11 civilian nuclear reactors in operation, which supply over 1 per cent of its energy needs.  A few years ago, the government was aiming to increase nuclear generating capacity to 40 GWe by 2020. But now, the National Energy Administration has revised China’s nuclear capacity need to 70 GWe by 2020.  At the moment, seven nuclear plants are under construction and there are plans to build another eight over the next three years.

Despite the setbacks caused by the global economic crisis, many believe uranium mining will remain lucrative. According to Steve Kidd, Director of Strategy & Research at the World Nuclear Association, “Market fundamentals have remained essentially unchanged. Mining finance is clearly now a lot tighter, but the demand prospects and declining secondary supply situation in uranium remain, making it one of the more attractive sectors to invest in.”

Hats off to Hathor

Hathor Exploration Ltd. [TSX.V.:HAT], a Canadian explorer with properties in the uranium-rich Athabasca Basin, received glowing accolades from respected geologist and editor of Exploration Insights newsletter, Brent Cook during an interview with The Gold Report. “Last year, they pulled some incredible drill holes at this little project called the Roughrider Zone,” said Cook. “So I am following that, have been for a while, and I am favorably disposed towards it, although the stock has come up in price.”

According to Cook, the company currently has four drill rigs on the property “drilling off, infilling drilling, and drilling some extensions and geophysical anomalies. If they hit the geophysical anomalies, this is very significant.” It is significant because two miners with uranium mills, AREVA and Cameco Corp., are in the area and they are both “desperate for ore.” Cook is confident Hathor has “some sort of deposit there.”

On Tuesday, shares of Hathor were trading at $ 2.57, down from a 52-week high of $4.40.

Other uranium miners in the news

Last Wednesday, Pancontinental Uranium Corporation  [TSX.V: PUC] informed its shareholders about the exploration progress that its joint venture partner Crossland Uranium Mines Ltd. [ ASX: CUX] has made on the March Fly Prospect located on its Chilling Project in Australia’s North Territory.

Diamond core drill work has been completed along previously discovered high grade uranium intersections.  The mineralization extends from surface down over 100m within a radioactivity anomaly about 700m long.  Seven core holes (1203.7m) were drilled along this anomaly, from which 275 samples of half core were submitted for chemical analysis in December. The results have been received, but are now being evaluated in terms of the previous intersections and surface geology. Some of Pancon’s plans for 2009 include examining newly discovered unconformity-related deposits beneath the sandstone cover rocks. On Tuesday, shares of Pancon were trading at .09 cents, down from a 52-week high of .55 cents.

Last week, Ucore Uranium Inc. [TSX.V: UCU] announced it had discovered “light and heavy rare earth metals at a remote high priority target” southeast of its Bokan Mountain property in Alaska.  The Geoduck Zone, through the use of recent assays, can now be confirmed as a structural extension of previously explored mineralization.

Ucore reports that Hole LM08-46, which was drilled at a -45 degree angle to a total depth of 59.74m, showed significant mineralization over a 1.2m intercept between the depths of 18.62 to 19.82m. “These results reinforce Bokan’s potential as a prospective multi-metals deposit,” said Jim McKenzie, President & CEO of Ucore.

On Tuesday, shares of Ucore were trading at .06 cents, down from a 52-week high of .63 cents.