THE Northern Territory uranium miner Energy Resources of Australia said the outlook for uranium demand "appears positive" as it reported a 75 per cent increase in annual profit to $76.1 million.

The uranium price, which peaked at a record $US136 a pound last June, has since fallen to $US78 a pound. But ERA received only $US25.06 a pound for its yellowcake last year - up from $US18.36 in 2006 - because it had signed long-term contracts at a time of low uranium prices earlier in the decade. The long-term contract price is $US95 a pound.

The Rio Tinto-controlled company's shares rose 97c to close 5 per cent higher at $19.80 yesterday, given the earnings beat analyst consensus expectations of $61.7 million.

Goldman Sachs JBWere this week predicted ERA's earnings would rise to $97.4 million this year and then double to $178.3 million in 2009.

ERA sold 5324 tonnes of uranium from its Ranger mine last year and expect this year's sales to be similar.

After spending $14.1 million on exploration last year, ERA increased the resources at Ranger to 50,567 tonnes from 43,253 tonnes a year earlier. But the resource at the shuttered Jabiluka project fell to 76,403 tonnes, from 96,000 tonnes a year earlier following a detailed revision of the geological model that excluded some lower-grade material.

ERA said a $57 million mine expansion was on budget and ahead of schedule, meaning mining rates would increase, starting in the current quarter.

A laterite treatment plant and a radiometric sorting plant will be commissioned in the middle of the year. But the capital costs of those project have risen to a combined $51.1 million, up from $40.8 million.

Although uranium was an extremely hot commodity at the time of its pricing peak last year, investors have recently lost enthusiasm for most uranium stocks.

ERA and Paladin Energy hold the advantage of being the only two Australian-listed pure-play uranium companies in production.

In its quarterly report, released this week, Paladin's managing director, John Borshoff, said a resurgence in nuclear power plant construction should underpin uranium demand in the longer term.

"The growing realisation that the challenge of combating global climate change will entail significant and substantive shifts in energy production and use in the developed world has stimulated a resurgence of reactor building and planning worldwide," he said.