Uranium miners' shares leap on BHP mine report
* Newspaper says force majeure at Olympic Dam mine
* BHP-owned mine produces nearly 10 pct of global uranium
* Cameco stock jumps nearly 6.7 percent (In U.S. dollars, unless noted)
TORONTO, Oct 20 (Reuters) - Shares of uranium producers raced higher on Tuesday, as an apparent declaration of force majeure at the massive Olympic Dam mine in Australia suggested uranium prices could jump.
Shares of Canadian uranium major Cameco Corp (CCO.TO) climbed more than 6 percent, while those of other international producers climbed between 7 percent and nearly 10 percent.
According to The Australian newspaper, mine owner BHP Billiton (BLT.L) (BHP.AX) plans to advise copper and uranium customers the mine will be down for an extended period because of damage to equipment at the main shaft earlier this month.
The mine produces about 4,000 tonnes of uranium annually, which accounts for a bit less than 10 percent of global mined production. The damaged Clark shaft handles about 80 percent of Olympic Dam's production capacity.
Such a loss of production would be expected to drive up prices in the thin uranium spot market as BHP's customers would have to seek alternative sources of supply.
"It looks like the market's assuming the worst," said Simon Tonkin, an analyst at Thomas Weisel Partners Canada.
Weekly spot prices UX-U308-SPT were last calculated at $46 a pound, according to Reuters data.
Late in the session, Cameco shares were up 6.7 percent at C$32.48 on the Toronto Stock Exchange, after touching a year high earlier in the session.
Australian-based Paladin Energy (PDN.TO) was up 9.7 percent at C$5.10 on its Toronto listing, while Uranium One (UUU.TO), which is focused in Kazakhstan, rose 7.5 percent to C$3.31, and Denison Mines (DML.TO) surged 8 percent, to C$1.90.
In the options market, the volume on Cameco was six times the average daily turnover with about 16,000 call options traded at mid-afternoon. This was seven times the number of its puts, according to option analytics firm Trade Alert.
Call options let investors buy a company's shares at a fixed price within a specified time period, while put options are options to sell.
BHP is expected to provide an update on damage to the mine on Wednesday in Australia. Continued...
