Uranium has continued to push higher, putting it in pole position to end the year as the best performed of the commodities.

The year to date gain from the nuclear fuel from $US21.88/lb to $US29.15/lb (spot) has stirred interest in the ASX-listed uranium juniors which have spent years out in the cold.

The price recovery – uranium got to $US135/lb in 2007 – has been attributed to production cuts by the world’s big producers, and a growing acceptance that growth in near-zero emissions nuclear power, along with renewables, will be needed to capture the full environmental benefits of the electric vehicle (EV) revolution.

As mentioned here previously, it takes 1kg of uranium to produce about 50,000kWh of electricity while 1kg of thermal coal is good for only 3kWh. So driving an EV charged up with coal power is kind of self-defeating on environmental grounds.

The stirring of investor interest in response to uranium’s price recovery to two-and-a-half year highs is just that, a stirring. But should uranium break out in the new year and charge past $US30/lb, it will be game on for the uranium juniors.

Some are positioning themselves for the upturn. Today’s interest is one of the most leveraged to an upturn – Marenica Energy (ASX:MEY), trading at 9.5c for a market value of $7 million.

Marenica has long been known as a processing technology play in the uranium space, with its patented “U-pgrade” beneficiation process having disruptive potential in the processing of calcrete-hosted uranium ores.

While the kit involved in the process is standard stuff, it is the way in which it is configured that delivers major operating and capital cost benefits.

The benefits come from the concentration of calcrete-hosted mineralisation by up to 50 times through the rejection of 95 per cent of the mass before the material enters the (smaller) leaching circuit.

Marenica has demonstrated the benefits for its 61m/lb low-grade namesake uranium deposit in Namibia. Operating costs for the project could be reduced from $US80/lb to $US40/lb using U-pgrade.

While the benefit does not make the Marenica project economic at current uranium prices (development costs could be reduced by trucking uranium concentrates to nearby processing plants owned by others), the potential for U-pgrade to dramatically lower the cost base for calcrete-hosted uranium deposits generally has broader implications for the industry.

That’s why ASX-listed companies Deep Yellow and Paladin Energy have been having a look at U-pgrade.

While the commercialisation of U-pgrade with third parties or by Marenica itself pans out, the company is stepping up its exploration effort to expand its portfolio of projects in uranium mining friendly Namibia.

Thanks to U-pgrade, the grade threshold for an economic proposition could be much lower than the industry has previously factored in.

The stepped-up exploration effort will hit its straps next year and means Marenica’s newsflow will have two streams – U-pgrade commercialisation efforts, and potentially exciting exploration results, with or without U-pgrade in the background.

Marenica recently picked up the advanced Mile 72 project and is set to become the second biggest holder of uranium exploration licences in the country after a bunch of applications it has made are granted.

The one to watch is an application for a tenement which borders Deep Yellow’s Tumas project where some exciting results from exploration of a channel system of calcrete-hosted uranium have been generated.

The Tumas results, and uranium’s price recovery, are why Deep Yellow has moved from 32c to 41.5 since the start of the year.

Marenica’s exploration push follows its move to debt-free status after the elimination of a $1.65m million convertible note held by the Chinese-controlled Hanlong Energy by a share issue at a highly favourable 58c a share.

Hanlong has had its troubles in the past and continues on as a 16 per cent shareholder. It is at a level the local market is comfortable with and has strategic appeal should others in the uranium space have takeover designs on Marenica.

Following a recent placement, Marenica has $1.6m in the bank.