Shares in Energy & Minerals Australia and Toro Energy led gains by uranium explorers in Western Australia on optimism the Liberal Party may win government after the weekend's state election and allow mining of the nuclear fuel.

EMA rose as much as 69% to 59 cents and closed 41%, or 14.5 cents, higher at 49.5 cents. Paladin Energy rose 8.6%, or 43 cents, to $5.45, while Toro surged 23%, or 4.5 cents to 24 cents.

The Liberals may form a coalition with the National Party, prompting an end to the ban on uranium mining, said David Black, professor emeritus in history and politics at Perth's Curtin University of Technology.

Neither the incumbent, anti-uranium Labor Party nor the Liberals have won enough seats to form a majority government. Vote counting continues today.

"Toro and EMA are going very well today because of the way the election result looks to be heading,'' Macquarie Group resources analyst Len Eldridge said in Perth. "Should the Liberals get in, it would be positive from a mining and exploration point of view.''

Western Australia has as much as 10%of the world's known uranium reserves, worth about $40 billion, according to an estimate from the federal government last year.

While Australia has almost 40% of the world's known low-cost uranium reserves, it supplies less than a quarter from three mines in South Australia state and the Northern Territory.

BHP Billiton's Yeelirrie resource and Toro's Lake Way/Centipede project are probably the most advanced in the state, while Uranex NL and Energy & Minerals have earlier-stage projects, according to analyst John Wilson at Sydney-based Resource Capital Research.

Australia is the world's second-largest uranium producer. Labor last year dropped its 27-year- old ban on new uranium mines, while allowing state governments to retain the power to reject mining proposals. Queensland and Western Australia ban uranium mining.

WA Liberal leader Colin Barnett said last week he would support uranium mining and lift the ban should he win. The party also opposes BHP's plan to buy Rio Tinto, and the combined company would have to pay higher tax rates.

"Investors following this sector have been desperate for some good news and a Liberal government in Western Australia would certainly be more positive for uranium explorers than the current situation,'' said Gavin Wendt, senior resources analyst at Fat Prophets.

"But uranium projects are really tough to get off the ground and West Australian juniors have been hard hit by shrinking operating margins, so this doesn't mean there's suddenly going to be a flood of new mines.''

Bloomberg