Uranium is in a bull market of mega proportions, as already highlighted here, with the metal having ramped up over 600% in the last five years. And the moment the prices crossed and stayed above $60/lb, many junior uranium companies in the exploratory stage became potentially highly profitable enterprises. Of these, uranium companies that are near production became absolute stock market darlings. This love affair has only just begun in this uranium bull market.

The last 3-4 years have seen major gains for almost all uranium companies, irrespective of whether they were in production, near production or purely exploratory. The rising tide of the underlying metal lifted all shares - this was the easy money phase of the uranium bull market. Even as prices of the metal have hit $75/lb, many analysts have begun wondering if we are closer to the end of this strong uptrend in prices, or at least close to a slowdown. This concern is reflected in the share prices of the uranium companies, since valuation of companies already in production will rise in almost direct proportion to the price of the metal, and prices of companies in purely exploratory stage will level off until some positive news emerges from their drilling. Uranium companies close to production however will continue to see their share price rise even as the promise of earnings translates into real cash. Markets will react quickly and reward the company suitably for its success, but also discount future earnings for the next 3-4 years. This means, there won't be too much time to capitalize on the rise after the news - so it is imperative to move into promising firms before they go into production.

The large uranium producer is Cameco Corporation; however, its recent disaster at Cigar Lake mines (flooding) has caused many investors to re-evaluate its prospects. Cameco is involved in multiple joint ventures to find more deposits, but its fortunes are primarily tied to their Cigar Lake operations. A second firm that is in production as well as exploration is Denison Mines, which recently announced that they expect to see a major rise in their uranium production by 2010. Other firms that are considered near production are SXR Uranium One, Paladin, Ur-Asia, Uranium Resources and Energy Metals. Many of these shares have had a good run, but may have more upside left.

To be really safe, it is best to find companies that have some production but plenty of exploration on very promising properties. This way, so long as the uranium prices remain above the $60-$70 range, new upside will be created for such companies even as some of the exploration returns successful results and is brought online. We recommend the use of some outstanding investment newsletters to help with your research in this space.

Best of lucks in capitalizing on this strong bull market in uranium!