Extract Resources Ltd., the uranium explorer partly owned by Rio Tinto Group, said an increase in resources at its Rossing South project in Namibia makes the deposit the sixth biggest in the world.

Extract upgraded the size of the resource to 257 million pounds, a tenfold increase from July 2009, it said in a statement today to the Australian stock exchange. The deposit was previously rated the world's eighth largest, Chief Executive Officer Jonathan Leslie said in a webcast.

"We fully expect to continue to move up the ranking" as Extract has a large area yet to explore at Rossing South, Leslie said. "We think there's significant scope to expand the resource beyond what we've announced today."

Extract, about 15 percent owned by Rio Tinto, is aiming to develop the world's second-biggest uranium venture after Cameco Corp.'s McArthur River mine in Canada. The company intends to gain from a nuclear power revival as countries turn to the technology to meet energy demand and cut emissions.

Extract rose 1.9 percent to A$6.85 at 10:52 a.m. in Sydney trading, while the benchmark S&P/ASX 200 Index declined 1.3 percent. The stock has dropped 19 percent in Sydney this year, compared with a decline of 7 percent for the index.

The company moved its head office to London from Perth this year and said in June it aims to begin production in 2014. The latest Rossing South results take it "another step" toward achieving that goal, the company said today.

Itochu Corp., a Japanese trading house, agreed last month to buy a 10.3 percent stake in Extract to benefit from global growth in demand for the fuel.

Eoin Treacy's view Until this week oil was testing the May highs near $85 and interest in the energy sector had increased quite considerably. A high degree of commonality was evident across the sector with distillates, coal and uranium all displaying bullish characteristics. The more liquid contracts, (pardon the pun) such as oil, gasoline and heating oil have all pulled back rather sharply in the last few days.

Gasoline is now testing its progression of higher reaction lows and will need to find support reasonably quickly if the medium-term uptrend's main consistency characteristic is to remain intact. Heating oil has also pulled back but has more room for maneuver than gasoline. Oil is prone to sharp reactions within its overall ranging advance and a sustained move below $70 would be required to question potential for continued higher to lateral ranging.

Coal and uranium which are more illiquid have been much less volatile. Thermal/Steaming coal had become a little overextended over the last few weeks but a sustained move below $60 would be required to begin to question the consistency of the medium-term uptrend. Uranium has held the recent strength and a sustained move below $40 would be needed to question scope for further medium-term upside. Considering that most speculators are active in more liquid contracts, the fact that less liquid instruments remain comparatively steady suggests that the current bout of profit taking might be a short-term phenomenon.

Against the background of renewed interest in uranium and continued growth in global energy demand, uranium shares are beginning to show signs of renewed investor interest. Most companies in the sector have underperformed other energy related shares following uranium's collapse from its 2007 peak. Extract Resources is something of an exception in that regard, it surged last year to an accelerated peak of over A$11. It has since pulled back in a relatively orderly fashion. The share has had a few false dawns during this corrective phase (Also see Comment of the Day on December 11th) but is beginning to exhibit a rounding characteristic consistent with gradual support building. A sustained move back above A$7.50 would break the progression of lower rally highs and add a more convincing signal that demand is regaining the upper hand. Also see David's pieces on uranium shares in Comment of the Day on July 14th and 15th).