Source: Economic Calendar.com | Timothy Walker | March 28, 2016
Shares of Centrus Energy Corp (LEU: 3.32 -0.01 (-0.30%)) shot up more than 15% in premarket trading today, topping off a stellar month’s performance for the uranium supplier. Traders are buying into Centrus this morning after the company announced that it signed a new contract with the US government that runs through the third quarter of 2016 and will total $32.3 million. Centrus, which is based in Bethesda, Maryland, supplies enriched uranium fuel to commercial nuclear power plants globally. The company’s stock had more than halved in value since October, before February 23, when the company posted Q4 results. The earnings report caused shares to double in one trading day.
In October of last year, the United States Department of Energy sent a report to Congress that argued the US must rebuild its domestic uranium enrichment abilities to address national security needs. As a result, the government has increased efforts to advance its uranium enrichment abilities. The underlying purpose of the agreement between the United States DOE and Centrus is to identify necessary improvements – in terms of cost, manufacturability, and efficiency – in existing US technology. This will help the US maintain and advance its expertise in uranium enrichment.
Under the agreement, Centrus will continue its role in performing engineering and testing activities for UT-Battelle LLC – the operator of the United States Department of Energy’s Oak Ridge National Laboratory (ORNL). It is part of a broader program to maintain and strengthen American-originated uranium enrichment technology for the benefit of foreseeable national security and energy security needs.
“We still have critical work to do to advance the nation’s uranium enrichment capability,” said Steve Penrod, VP of American Centrifuge for Centrus. “In Oak Ridge, we have a specialized workforce, unique assets, and technical capabilities that are essential for this important work. Over the long-term, we plan to continue advancing our technological expertise in uranium enrichment technology, operations, and manufacturing so that we are ready to deploy a commercial-scale enrichment facility when sufficient market demand recovers.”