Uranium Stocks

Fundamentally Uranium

2009-12-07T15:42:00.003-08:00

Bias: Company-negative, Sector-Positive

Geopolitical/Environmental/Exploration Risk

Uranium may be a relatively plentiful compound, but its extraction can be fraught with objections. Countries who do not rely on uranium projects to provide a substantial source of income (ie First World countries) often suffer from objections by their own constituents when a uranium mine--real or potential--is deemed to be too close for comfort.

Case in point an interesting battle in mining-friendly Quebec that pits the doctors of a small northern town of Sept-Îles versus Terra Ventures Inc. (CVE:TAS, TAS.V) . Terra is best known perhaps for having a piece of the Roughrider uber-deposit in Saskatchewan owned by Hathor Exploration Limited (CVE:HAT, HAT.V), but whose Lac Kachiwass project, dubbed as its "most advanced property at this time due to its historic exploration and historic resource estimate" is a potential ~5.6 million lb Rossing-type (large tonnage, low-grade) deposit.

This property was acquired by Terra in March 2007, with additional contiguous properties bought the next year. So far the company is still in the midst of waiting for assay results from their 2009 summer drilling program. Recently the company was allowed to build an access road to the Lac Kachiwass deposit that is 13 kilometres from the town, near Lake Kachiwiss which flows into the municipal water supply.

This has the town's doctors up in arms and threatening mass resignation. Twenty doctors of all disciplines in total, not an insignificant number anywhere and certainly potentially devastating for a small town, have been fighting Terra on grounds of potential uranium contamination.

Terra Ventures will soon divest itself off assets including Lac Kachiwass into its own company while keeping the its core asset--the stake in Hathor's property--within Terra. Surprising? Not so much given the potentially protracted and already-bitter battle in Quebec. Ostensibly, this move is happening as Terra felt the market was only pricing them based on their core asset (Terra has a market cap of ~$22million Cdn).

I am really interested to see how much the market prices in the new company..

Technically Uranium

2009-12-01T23:28:00.007-08:00

Since my last post on November 22nd in which I remarked on a range-bound tightening between $6.35 and $7.30, let's see what our benchweather U.TO has done:

The conclusion? Not much from the looks of it. Closes have been in the range of $6.58 to $7.00 Cdn, so pretty much stuck in the ever-contracting triangle.

In the short term, if my hypothesis stands correct, the trading range becomes even narrower as we head into the end of the year. Specifically in the next two weeks, breakout above 7.2 (ideally 7.4) or breakdown below 6.45 may be important. RSI at 20 certainly indicates some immediate support as evidenced by today's trading action; you can see that this is the fourth time this year RSI has dipped to that level.

It is interesting to see this stock from a different perspective:

Ever since the precipitous fall from grace in April 2007, uranium has been trying to establish a base for the better part of a year now. I can almost convince myself that I see half of a bowl being drawn out, which would be an optimistic viewpoint.

Uranium A Year Later

2009-11-22T23:32:00.006-08:00

Welcome back! It's been a year since my last posting:

http://uraniumstockinvesting.blogspot.com/2008/10/unloved-unwatched-uranium.html

During the last year, survivors did indeed emerge from the purge that not only engulfed the microcosm of the uranium world, but also the macro stock markets in general. Those who had the fortitude to buy established producers like Camecoo (TSE:CCO), Paladin (TSE:PDN), Uranium One (TSE:UUU) among others have been richly rewarded. Then again, this would ring true with buying almost any stock after panic lows set in last fall.

More importantly, let's examine what is to come. An examination of Uranium Participation (TSE:U), my uranium proxy, shows a meandering path that shows essentially no change in the last year. The trading range, however, does seem to be narrowing in an almost symmetrical triangle formation that is tightening between $6.35 and $7.30 range. A break below or above that may give a clue to whether a reversal or continuation of the downward trend will be at play.

Fundamentally, there have been a few developments in the uranium world of 2009, the most notable being BHP Billiton's Olympic Dam incident that will require repairs until Q3 2010 and constricting uranium supply somewhat. Despite this, the spot price of uranium is still at a rather anemic $44US/lb.

Cameco's CEO Jerry Grandey, a fairly level-headed gentleman in my estimation, said that he sees the long-term equilibrium price for uranium at between $50 and $70 per pound, although he expects the spot market price to remain volatile in the short-term.

So what to do? Well, the speculative excesses seem to have drained away by time. I would argue that there has been no change to the positive bias of the uranium story. What's left is market timing, and the more conservative types would probably want see uranium have a breakout before jumping in.

Unloved, Unwatched Uranium

2008-10-26T17:37:00.008-07:00

Well before the rapid plunge of markets around the world and general deleveraging of risk occurred, the price of uranium and uranium stocks had already been correcting. Of course, now with liquidity being the order of the day and indiscrimate selling in all sectors--forced or not--uranium is to many a symbol of the speculative excesses of an era that few could have imagined would end so terribly wrong.

Signs of a top in uranium were there: interest from the general public to a point where uranium was being discussed in mainstream media, the proliferation of hundreds--many of dubious nature--small explorers with uranium in their name competing for investors' money, the parabolic rise in the price of spot uranium. Still, it is easy to view matters with a retrospectoscope, to condemn with post-hoc analyses.

What matters is looking at the present and future. Uranum is still trying to carve a bottom and with its natural link to oil as an alternative fuel, may continue to struggle as demand destruction of oil continues in a period of recessionary and deflationary pressures. As the chart below shows, the price of uranium on the spot market is approaching where they were two years ago:

In the same period of time, Cameco's (NYSE:CCJ) stock price held up remarkably well until generalized selling forced its share price to sharply capitulate since July, essentially lopping off two-thirds of its value and forcing it to trade well below its NAV. And this the chart of the biggest "pure" uranium company in the world; one can just magine what the comparative charts of smaller junior explorations look like.

And yet, in this new era of pronounced fear, pessimism, or downright apathy to anything financial related, the small subset of bold investors look at the amount of blood on the streets, fight down their own misgivings, and logically reconsider the fundamentals of the uranium story. Nuclear reactors are still being built around the world and they will need fuel. Massive oil finds are a thing of the past and people need alternative energy sources, with the benefit that even environentalists are starting to acknowledge that nuclear may be viable part of a greener future. Add in the possibility that dozens--if not more--of the smaller uranium companies may fail in the coming months due to the credit crunch may provoke one to start thinking of the million dollar question: who will be left? Because yes, uranium is for real and yes, the few survivors left will eventually rise up again to new heights.

BNN Uranium Stocks, Rob Lauzon (II)

2007-12-07T21:45:00.001-08:00

Rob Lauzon Middlefield Capital on Thursday Nov 29

URANIUM ONE (TSE:UUU): they have their own issues; we trimmed half our position around $13 when Kazakhstan government enacted laws that allowed them to change natural resource law. It got me thinking, once Uranium One really starts making cash flow out of Kazakhstan in 2-3 years, will they change their contract. Subsequent to that, company basically reduced production guidance by about 40% due to sulphuric acid shortage in Kazakhstan. Also they are having problems commissioning their Dominian mine as well. This company has had many rosy projections, CEO was talking about $200 uranium, too promotional. They bought Urasia and EMC, two big large acquisitions, question is do they have labour, manpower to integrate. It is underweight, management has to prove themselves to investment community because most of community has been disappointed. Until we see production come on stream sooner, the stock should trade back to $11-12 but we are in wait-and-see mode until then.

UUU 3mo and 2yr charts

UR-ENERGY (TSE:URE): yeah I would buy it at this price. This is an in-situ leach recovery method, more environmentally friendly, lower cost. They have two projects that they are working on bringing into production probably in 3 years, Lost Creek and Lost Soldier. They filed some permits, looks like they are on track. They have about $1 in cash; if you buy it around $3.50, quite insulated. You really want to load up if at $3, currently looks good value. For anyone looking for near-term exposure in US, Ur-Energy is definitely takeover candidate.

URE 3mo and 2yr charts

My Take:

Uranium One is the amalgamation of two of my previous picks, sxr Uranium One and Urasia, with EMC thrown in for good measure. The stock has been battered by production problems in Kazakhstan, where sulphuric acid, a necessary reagent for uranium production, is in short-supply. The company is trying to address the issue and the company uranium producer in the country, government-owned Kazatomprom, is building a sulphuric acid plant, but will not come onto production until 2010. Uranium One is having experiencing similar growing pains as Paladin, but after the tax loss season is over, investors should give a hard look to these new uranium producers who have been rightly discounted by production issues, but whose share prices will appreciate once these growing pains have been addressed.

Ur-Energy is another one of my favorites; its strength of management led by long-time uranium specialist William Boberg and geographic stability in the US, coupled with a matter-of-fact, low-key approach leads me to believe that this stock is worth holding onto long-term.

BNN Uranium Stocks, Rob Lauzon (I)

2007-12-02T13:38:00.000-08:00

Rob Lauzon Middlefield Capital on Thursday Nov 29

TRIEX MINERALS (CVE:TXM): it is a name we quite like as an exploration company; it comes with it risk of being exploration company, not producing uranium; their goal in 5 years to find uranium in east side of Athabasca as well as Hornby Basin and Alaska. Triex actually raised some money yesterday, I purchased more shares, think it is great buying opportunity. They staked early claims near McArthur River near producing mines; the Pasfield Lake project looks quite exciting over next year, year and a half. I think it will probably trade to $3.50-$4.00 in next 6 months.

TXE.V 6mo and 2 yr charts

CROSSHAIR EXPLORATION (CVE:CXX): we are watching Crosshair quite closely, had some pretty interesting drill results, drilling in same area as AURORA ENERGY (TSE:AXU) in Labrador; comes with it risk as exploration play, a lot of fixed cost if they ever decide to build a mine due to lack of infrastructure; potential for this company and AURORA to share cost. We do not own it right now but we are looking at and in our radar screen.

CXX.V 6mo and 2 yr charts

PUREPOINT URANIUM (CVE:PTU): looking at the chart it has probably found a bottom here in the 35-40 cent range. We do own a small amount of Purepoint in a few of our smaller funds that purchase flow-through shares. The one thing about Purepoint is that they have staked a lot of land in swampy deep areas of Athabasca, tougher to find it and more expensive if they do find it.

PTU.V 6mo and 2 yr charts

My Take:

Crosshair is the largest of the three companies mentioned, with a market capitalization of around $130 million Cdn while Triex is at $55 million and Purepoint is only worth around $19 million. Risk, of course, is understandably inversely correlated to these rankings. The project mentioned in Labrador for Crosshair is its Central Mineral Belt Uranium Project, in which they are going to start drilling again after the new year. Its bigger cousin, of course, is the $1 billion company Aurora Energy, who differ in that the latter has an NI 43-101 compliant resource.

Query: Opportunities Amidst Disinterest

2007-12-01T23:37:00.000-08:00

As alluded to in my last post, much speculative interest and short-term momentum has gone out of the uranium sector. Share prices that went parabolic just months ago have come back down just as or even quicker than they ascended. And still, if one believes in the fundamental story (and really, you only have to consider the logic in governments just suddenly abandoning their billions of dollars budgeted for new reactors overnight) of increasing uranium demand, even the pain endured over the last several months can be tolerated.

However, words can and should only sway so much. What follows are chart examples to illustrate my point.

DENISON MINES (TSE:DML AMEX:DNN)

3 months

DENISON MINES (TSE:DML AMEX:DNN)
2 years

PALADIN RESOURCES (TSE:PDN)
3 months

PALADIN RESOURCES (TSE:PDN) 2 years

Yes, the last few months have not been kind to uranium equities. Fluctuations in the spot price and an overdue correction took its tool on most uranium stocks, from seniors like Denison Mines and Paladin Resources all the way to the hundreds of small uranium juniors, including many of the more risque types; many of their 3 month charts look a lot worse than the two I have shown.

Regardless, the point of showing a 3 month and a 2 year chart is to point out that the long term trend has not been broken, mostly in part, I belive, to the fact that the uranium story itself is a good one, a valid one, and one that has not changed materially in the last several years. Corrections will come and go, this one lasted a good several months, but they also present as buying opportunities to the patient investor with an eye for short-term bottoms.

Both of these stocks seem to be oversold at this point and I would be shocked to see either of these be lower than their current price in several months.

What about Uranium

2007-11-29T20:07:00.000-08:00

Apologies for the lack of posts in the last few months, I have had to concentrate on other endeavours. Much has happened in the uranium sector, a volatile uranium spot price accompanied by a sharp correction all equities uranium. However, in all bull markets there are the inevitable corrections. I will explore in the next few posts whether or not people should be going back into uranium equities.

I start off with the opening blurb from BNN today with Robert Lauzon of Middlefield Capital:

We are still quite bullish..if you look at long-term market where most transactions occur, it has been at $95 per pound for 6 months and has not moved. Unfortunately the equity market tends to trade off spot market, where only about 10% of uranium volumes trade, been volatile, traded from $80 to $136 back to $75, now at $93..we think uranium equity shares are forming bottom. Alot of the fast money out of sector, need to wash out fast money before forming bottom..the fundamental investors looking at high uranium prices next five years I think will prevail.

Paladin Resources: Next Uranium Takeover?

2007-07-22T17:18:00.000-07:00

In these days of multi-billion dollar M&A largesse, $4.5 billion Cdn Australin uranium upstart Paladin Resources (TSE:PDN) just might be a potential takeover candidate, if the rumors swirling around are true. Potential suitors being bandied around include Canadian uranium behemoth Cameco Corporation (NYSE:CCJ TSE:CCO), French counterpart AREVA, and always lurking in the background, BHP Billiton. Another name tossed in is Uranium One (TSE:SXR), itself a $5.1 billion product of recent mergers.

Paladin has been busy the last several months. At the beginning of June, the company closed its bid for Summit Resources Limited, acquiring 81.8% of shares and taking full control of the Valhalla exploration project for all intents and purposes.

On a more sobering note, however, Paladin spent the rest of the month defending its Kayelekera Project in Malawi. First, both the company and government were sued by NGOs to delay the project until issues with Malawi's Environmental Management Act (EMA) as well as protective measures for the local community were addressed; the government has said that it has fully complied with the EMA. Secondly, Paladin reiterated its stated goal of commissioning Kayelekera in September 2008 and dismissed contentions that there may not be sufficient power for the project as the company is placing an order for a 10MW power generation facility.

Rarely seen on the defensive through its meteoric rise as a uranium upstart, Paladin also had to announce a 130,000lbs shortfall of uranium from a projected 400,000lbs to the end of June due to initial start-up issues at the Langer Heinrich project in Namibia. The company is still confidant that Langer Heinrich will ramp up to fulfill its 2.6 million lbs of yellowcake a year production target.

A look at the 2-year chart of the company exemplifies the current weakness that Paladin is experiencing, probably exacerbated in recent weeks by the pessimism in the uranium sector as a whole. Naturally, takeover speculation arises as other companies evaluate the intrinsic value of Paladin and compares it to the marketès current valuation. Astute uranium investors looking to buy this stock must ask themselves whether they believe that Paladin's is just having some growing pains transitioning from an upstart uranium explorer to a bonafied uranium producer, or is there something more fundamentally wrong?

Uranium Stocks: Short Selling

2007-07-16T17:29:00.000-07:00

As short interest mounts in Cameco Corporation (NYSE:CCJ TSE:CCO) to 6.2% of shares outstanding, short sellers are betting that the confluence of certain factors presents a ripe time to bet against a uranium stock that has seen a healthy YTD increase.

The first decreases in the uranium spot price to the current $129US/lb, coupled with Cameco's July 11 announcement of further delays in Cigar Lake that will delay production until at least 2011 have spurred short sellers into their present bearish position on the uranium giant.

As Cameco struggles being the bellweather uranium stock most synonymous with general market sentiment, the pessimism surrounding the future trends of yellowcake has never been greater. This is further exemplified by the essentially flat performance of other uranium seniors not named Cameco.

Whether it be Paladin Resources (TSE:PDN) or sxr Uranium One (TSE:SXR), and to a lesser extent, Denison Mines (AMEX:DNN TSE:DML), they have collectively been both flat YTD in the context of an ever-rising North American market. Moreover, they have reacted very little to the announcement to delay Cigar Lake for another year; usually a bullish supply-demand argument, it carried much less weight in the context of falling uranium spot prices.

However, one must remember that we saw a diversion between the uranium spot price and uranium stocks much earlier in the year. While uranium spot has essentially doubled YTD, the aforementioned uranium seniors-not-named-Cameco have assuredly not. In this context, although much fear has been injected in recent weeks as experts predict a uranium meltdown scenario where the spot price plunges, the astute observer will question exactly how much froth is in these stocks.

Yes, there are concerns overhanging uranium stocks: millions of pounds held by funds who have no intention of using uranium, nuclear utilities who are banding together to collectively halt the rising spot price, and the general inability for uranium stocks in the last few months to head higher despite favorable market conditions. Even so, the fundamental story of nuclear power must dictate that investors take advantage of irrational overselling and stake positions when fear and apathy abounds.

How Are Uranium Seniors Holding Up?

2007-06-19T19:59:00.000-07:00

The Uranium Focused Energy Fund (TSE:UF.UN), a brainchild of the Middlefield Group, is currently a $228 million vehicle with a singular focus on the uranium sector. With its top 10 holdings being such recognizable names as Cameco, sxr Uranium One, Denison Mines, Paladin Resources, BHP Billiton, Rio Tinto, Energy Metals, First Uranium, Uranium Participation and UEX, this fund aims to capture masses of new investors who may not be comfortable buying individual uranium stocks and partake in their inherent risk. Of course, the caveat here is that, being a specialty fund in the first place, is subject to considerable inherent risk itself.

Dennis DaSilva, portfolio manager, Middlefield Financial Limited, stated on BNN several weeks ago that:

The [uranium oxide spot] price, which is significantly disconnected from the equities quite strong, stable at US $120/lb, that is up from $113/lb about three weeks ago. People are obviously trying to figure out where is the high, how far it is going to go. We are not making predictions, obviously for a fund such as ours, we have a long term view, the fund goes approximately for six years, and that coincides with our view on uranium in general, and that is the fundamentals of balance between supply and demand will not reached for at least six or seven years, if that at all. We are certainly not trying to predict $200 or $300 uranium prices, we just think we are in a very strong environment for prices, sticking to the better producers and near-producers and companies with the best odds of finding reserves and bringing them to production as the focus of the fund.

Since that time, the uranium spot price has increased to $138 while the long-term price indicator is at $95/lb. The Uranium Focused Energy Fund, on the other hand, has treaded water, hovering right around its initial subscription price. These uranium seniors, taken as a whole, are weathering the effects of the summer doldrums in commodities. Many uranium juniors have not been as fortunate, as the main TSX index has diverged from the junior Venture Exchange.

With an extended 1 month+ correction, some interest has seemingly left the uranium sphere, although the underlying fundamentals remain the same. The spot price rises, utilities complain, and the beat marches forward. Just yesterday, Global Uranium Fund (TSE:GUR.UN), closed its $100 million IPO. It will provide yet another avenue into which the casual uranium investor can sink their money.

Uranium World This Week

2007-05-19T11:57:00.000-07:00

Yellowcake
Uranium futures for June traded at $134.90/lb, above the spot price of $120/lb. While on the surface, trading U3O8 futures on the NYMEX has barely created a ripple, uranium bulls believe that anything that serves to focus American investors to yellowcake is a good thing.

Speaking of American-listed Stocks..

Denison Mines, who started to trade on the AMEX under the symbol DNN a month ago in addition to its existing DML listing on the Toronto Stock Exchange, has remained resilient during the May correction that has recently hit other uranium stocks. Whereas its most-oft quoted rivals sxr Uranium One and Paladin Resources have traded mostly sideways and down respectively, Denison’s share price has appreciated, despite reporting a net loss of $5 million in Q1 and slashing uranium production forecast at its shared McClean Lake mine by as much as 40%. With the comparative dearth of available American-listed uranium stocks as compared to Canadian ones, Denison has adroitly positioned itself despite some recent disappointments.

Auctioning off Energy Metals Corporation
A $1.4 billion Cdn uranium play with in-situ recovery (ISR) properties in the United States, Energy Metals (along with Strathmore Minerals) was one of the earliest companies to scoop up potential uranium assets in the States; today it possesses over 350,000 total acres. Besides continuing to grow its uranium resource base, the company is trying to fast-track uranium production. Recently, the company announced a 1.4 million lb sales contract over six years beginning in 2010 for its Hobson/Palangana uranium project in Texas that is slated to start producing in 2008.

Potential suitors for Energy Metals include sxr Uranium One, Cameco Corporation, and French nuclear giant AREVA. So far the company is keeping mum on its negotiating partner, but one thing is for sure: the pace of uranium M&A activity will continue to intensify as in other resource sectors.

May 10 Uranium Stocks Update: Paladin Resources (TSE:PDN)

2007-05-10T17:55:00.000-07:00

Befitting its status as one of the go-to uranium plays, Paladin has made steady progress over the last few months. Its flagship Langer Heinrich project in Namibia opened and should have been running at 100% of design throughput since late April. The company projects that Langer Heinrich will reach output of 2.6 million lbs of yellowcake per year sometime next month; an expansion late next year should increase output to a minimum of 3.7 million lbs/year.

Meanwhile, its Kayelekera project in Malawi will be 85% owned by Paladin and 15% by the government, a compromise that assures the company of ten years worth of no taxation or royalty increases. A bankable feasibility study (BFS) confirmed the viability of Kayelekera to produce 3.3 million lbs of yellowcake over the first seven years, with a CapEx of $185 million. Environmental approval and a mining license has also been obtained by Paladin and the project is slated to be commissioned in September 2008 with full production expected Q2 2009. In addition, the threat of non-governmental organizations (NGOs) in Malawi potentially stopping Paladin from mining seems to have faded as local support for Kayelekera appears to be strong.

Putting the two projects together, if Paladin continues to meet production deadlines (which the company has been able to do thus far), it expects to cash flow ~$2.8billion US from now until 2012, assuming a yellowcake price of $90 US/lb.

Moving to the acquisition side of things, Paladin appears to be successful in its second bid for Summit Resources Ltd, which holds 50% of the Valhalla uranium deposit in Western Australia. As of April 27, the company had received acceptances of 58.21% of Summit’s issued capital and has also extended the bid period until May 18. However, the caveat here is that Areva, the French uranium giant, has filed a complaint against Paladin with the Takeovers Panels, insisting that Summit shareholders be allowed to decide on the deal at a general meeting. Areva owns a 10.46% stake in Summit, so this controversy could take some time to resolve itself.

With a $4.2billion Cdn market cap, Paladin is by no means a small company anymore, but with one of the best track records thus far of uranium producers, continues to trade at a premium. Truly a good stock to hold and perhaps buy on weakness.

Uranium Players Predicting Uranium Price

2007-04-24T23:00:00.001-07:00

I have decided to compile a list of analysts and management who have come out publicly and tried to predict where the uranium price is going. As you notice, some have not given timelines. The dates are as accurate as I can make them, although they might not be exact. Notice that, as the uranium spot price continues to move up, analysts who were more conservative with their targets started to revise upwards. After the crash however..

Oct 8, 2008 JP MORGAN $65.98 avg 2008, $64.75 avg 2009, $71.50 avg 2010, $65 long-term
Nov 28, 2007 PATRICIA MOHR, SCOTIABANK $95-100 in 2008
April 17 CIBC WORLD MARKETS $140 in 2007, $160 in 2008
April 11 BRENDAN KYNE, LEEWARD HEDGE FUNDS $150-200 next two years
Apr 10 NEAL FRONEMAN, CEO SXR URANIUM ONE $150 end of 2007
Apr 10 LAURENCE ALEXANDER, JEFFREY & CO. $115 avg 2007
March 29 ABN AMRO, GLOBAL BANK $140 2007-2010
March 29 JOHN WILSON, RESEARCH CAPITAL RESEARCH $125 2007, $140 late 2008
March 6 Australian Bureau of Agricultural and Resource Economics ABARE $94.20 avg 2007 $103avg 2008
Feb 27 ABN AMRO, GLOBAL BANK $95 2007
Feb 26 PATRICIA MOHR, SCOTIABANK at least $90, appear headed to $100 end 2007
Feb 12 PHILLIP SHIRVINGTON, CEO URASIA ENERGY >$100 2007
Feb 12 NEAL FRONEMAN, CEO SXR URANIUM ONE >$100 2007
Jan 31 YURIY NEDASHKOVSKY, UKRAINE DEPUTY ENERGY MINISTER $122 end 2007
Jan 29 BRENDAN KYNE, LEEWARD HEDGE FUNDS $100 in 2007, $125 in 2008
Jan 8 RESOURCE CAPITAL RESEARCH $90 mid 2007, $115 late 2008
Jan 7 PATRICIA MOHR, SCOTIABANK $90 by end 2007
Jan 7 ADAM SCHATZKER, RBC CAPITAL MARKETS $100 in 2007
Jan 5, 2007 PETER GRANDICH, THE GRANDICH LETTER $100 ?timeline
Dec 21, 2006 BART JAWORSKI, RAYMOND JAMES $90 in 2007
Dec 11 ANITA SONI, MERRILL LYNCH $75 in 2007
Nov 7 LUKE BURGESS, GOLDWORLD.COM $110 by 2010
Nov 6 JEAN-FRANCOIS TARDIF, SPROTT ASSET MANAGEMENT $70 by January 2007
Nov 6 BOB MITCHELL, ADIT CAPITAL MANAGEMENT LP $80-100 ?timeline
Oct 18 DOUG CASEY, CASEY RESEARCH $100-150 ?timeline
Oct 18 GARY STOKER, NUFCOR INTERNATIONAL >$60 in 2007
Oct 16 JOHN ZECHNER, JOHN ZECHNER ASSOCIATES $80-100 ?timeline
Sep 12 DEUTSCHE BANK AVERAGE URANIUM PRICE $59 in 2007
Sep 12, 2006 CIBC BANK $70 by end of 2007

This list will be updated regularly.

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Newsworthy Uranium Tidbits of the Week

2007-04-22T20:33:00.000-07:00

China

Like every other country that is in the midst of building nuclear reactors, China is scrounging to secure future uranium supplies. Its Commission of Science, Technology and Industry for National Defense just came out with a report that emphasized the need to mine its own uranium oxide.

While China had finalized an agreement with Australia last year in the hopes of securing the latters' uranium supply, political uncertainty still abounds and the prospects of massive uranium production expansion from new mines in Australia is not likely going to happen. Still, as a testament to how serious China is about securing future supplies, Sinosteel Corporation will buy a 60% stake to manage and operate Australia's Peppinnini Minerals' exploration licences.

Closer to home, several areas near the Tibetan and Kazakhstan borders are being recommended as possible exploration targets. Kazakhstan, of course, has ambitious plans to become the world's biggest uranium producer and is in the enviable position to be geographically bracketed by Russia and China, two of the forerunners in the nuclear renaissance.

Specific companies that could stand to benefit include Urasia Energy, with operations in Kazakhstan and who just merged with sxr Uranium One to become a global uranium producer. Another company is Khan Resources, with a 58% interest in the Dornod project in Mongolia; they expect to mine 4-5 million lbs of uranium over 10 years, with the results of a pre-feasibility study due in mid-2007.

Uranium Futures
Probably a sign that uranium is progressively getting on peoples' radars, the New York Mercantile Exchange (NYMEX) is teaming up with Ux Consulting to allow uranium futures to be traded starting May 7. The reasoning behind this move ostensibly was to provide more transparency in uranium prices. Reaction has been mixed, with analysts not really sure one way or the other how this will affect the overall uranium environment.

April 15 Uranium Stocks Update: Energy Fuels (TSE:EFR)

2007-04-15T22:58:00.000-07:00

In the past week, Energy Fuels has broken out of its consolidation phase to the upside. Several drivers can be attributed, including a recent filing that the Resolute Performance Fund-a $750 million private mutual fund with $150,000Cdn minimum initial purchase and a 70% compounded return since 2005-had bought a 11.4% stake in the company back in the middle of December 2006. In addition, the stock rose double digits when president and CEO George Glasier went on Canada's Business News Network last Friday to espouse the virtues of his potential uranium producer. Below is an excerpt of the interview:

George Glasier, president and CEO, Energy Fuels Inc.

Uranium Regions in the US
We are in three states right now, Colorado, Utah, and Arizona. These states produce significant amounts of uranium. The original company that I was with was Energy Fuels, the largest uranium producer in the United States, produced about 5 million lbs/year, twice as big as next largest producer in the US. The area of Colorado was the first area where uranium was produced in North America, occurred in the 1940s with the first weapons programs.

Near-term Projects
We have our first mine refurbished, production coming out this year from Whirlwind mine in Colorado. Second mine will be in Utah, Energy Queen mine. Tenderfoot Mesa to come out early 2008. Since these are mines that are already developed, CapEx for Energy Queen $1.5 million, the others $1 million, includes all rehabilitation and equipment needed. Drilling budgets $2 million on all of our properties.

Funding
We had a raise of $30 million December of 2006, plenty of cash to do everything that we need to do, including putting our first production on the ground at the mill. With our cash position we are completely set to go forward with all of our plans

Acquisitions
We are still acquiring properties, have a number under negotiation. We have the database for virtually all properties in Colorado, Arizona, and Utah. So with the database we judge which properties have merit and we pick up properties which can be put into production fairly quickly, within next two to three years.

When Profitable?
Soon as we start milling production, as early as 2008. We only need uranium to be about $30/lb to be profitable, wiggle room given uranium is $113/lb now.

Outlook
Although there might be some short-term downward selling pressure due to the emergence of free trading shares from the previous financing and some investors wanting to book profits from the latest move, Energy Fuels looks very well-positioned right now. Execution is the key here as this company needs to prove that it can indeed be a uranium producer in short order.

Uranium Spot Price to $113/lb

2007-04-09T22:06:00.000-07:00

As the uranium spot price skyrocketed from $95/lb to $113/lb this week amidst increasing demand in the face of new supply concerns, even analysts who have been bullish on the metal have seen their target prices surpassed, and by a wide margin. For example, Patricia Mohr, who oversees Canadian bank CIBC's Commodity Price Index, has had to revise her estimate upwards already this year; her most recent prediction of yellowcake that "appears headed to $100 at the end of 2007" is already $13 lower and 8 months later. No, the era of uranium is far from over, it seems.

Indeed, signs of increased investor attention to uranium has filtered into the United States. Coinciding with the upward price movement in uranium was a new 52-week high for uranium supplier USEC Inc. USEC, which trades under the symbol USU on the NYSE, operates the only uranium enrichment facility in the United States; it also is in charge of recycling uranium taken from old Russian nuclear warheads and converting it into useable fuel. As one can see from the chart, USU has had a nice run, rewarding investors with nearly a double over the last six months and appreciating to a $1.6billion US market cap.

As impressive as USU's return has been, there are comparable uranium stocks with a primary listing in Canada on the Toronto Stock Exchange (TSX) that also trade on the Pink Sheets. Emerging uranium producers Paladin Resources ($4.9 billion Cdn), Denison Mines ($2.9 billion Cdn), and soon-to-be-merged sxr Uranium One ($2.5 billion Cdn) and Urasia Energy ($3.8 billion Cdn) all have 1-year returns that exceeds that of USEC: Denison itself has returned ~250% during this span:

As unhedged uranium producers who have had relatively short corporate histories and were not forced to sign long-term contracts when the uranium market was depressed, they are able to fully leverage the increasing uranium spot price. Increased costs of production certainly remain a concern, something all mining outfits would agree upon, but investors are betting that these emerging uranium powerhouses have managed to find the perfect confluence of emerging production profiles in the background of an ever-increasing prices.

Momentum in Favor of Uranium Stocks

2007-04-05T00:08:00.000-07:00

Five weeks after the violent global correction in stocks, a series of positive drivers have buoyed uranium stocks back near their previous levels. Highlights include:

March 7: Australia's Energy Resources declaration of force majeure on its sales contracts as a result of flooding in its Ranger mine
March 19: Cameco details remediation plan for its Cigar Lake mine, targets 2010 production
March 20: Uranium Focused Energy Fund closes $195 million IPO
March 23: Uranium spot price raised to $95/lb

Because its news regarding Cigar Lake was deemed to be better than expected, Cameco's stock has regained much of its luster, traversing from $36 to $45 on strong volume in a matter of weeks, buttressed by a "top pick" recommendation by RBC with a target price of $60.

Meanwhile, Cameco's upstart competitors which includes Paladin Resources, Urasia Energy, Denison Mines and sxr Uranium One have also benefited from their status as those few uranium producers with market caps >$2 billion Cdn, receiving the lion's share of new investor attention and institutional support. For example, the bulk of monies in the new christened Uranium Focused Energy Fund will be to hold these "uranium seniors".

Thus, as the inevitable countdown to $100/lb uranium continues, the uranium fundamental story seems to be solidifying. However, the caveat remains that another sudden downturn in the broader market, as what happened in May 2006, may temporarily take the wind out of these stocks in a big way. To me, a vital sign of broader investor confidence would be to take out the old TSX Venture high; otherwise, the threat of a triple top looms and whatever momentum uranium stocks garnered in the last few weeks would be in jeopardy.

9th Uranium Stocks Pick: Energy Fuels (TSE:EFR)

2007-03-18T09:40:00.000-07:00

Energy Fuels Inc. (TSE:EFR) is a Canadian-based uranium exploration and development company that is trying to capitalize on the uranium price escalation (latest spot price $91US/lb) by putting into production several old mines recently acquired in the United States.

KEY PROPERTIES

Whirlwind
Energy Fuels acquired the Whirlwind properties located in Utah and Colorado several months ago. The key in the acquisition is its uranium and vanadium Whirlwind mine. A January 2007 NI 43-101 compliant technical report of the mine disclosed current Indicated resource of 657,000 lbs of uranium oxide and 2.17 million lbs of vanadium oxide based on 69 drill holes while recommending further drilling to be done; the company has contracted another 19,500 feet of drilling to be finished in 2007 on its Whirlwind claims in hopes of finding additional deposits.

In order to put the Whirlwind mine into production and graduate from production visibility to the select group of producers, the company needs to meet certain goals, including steps to rehabilitate the mine (expected to start Q2 2007 lasting 6 months with expected CapEx <$1 million), negotiating a tolling arrangement, preparing a pre-feasibility study, and obtaining full approval of the expansion of its existing permit. If everything goes as planned, Energy Fuels plans to reopen the Whirlwind Mine by late 2007, with processing scheduled a year later once stockpiles have been gathered to adequate levels.

Energy Queen
Located in Utah, Energy Fuels is planning to bring this existing mine into production with a $2 million US mine rehabilitation program that, although the company has a mining permit in place, will require a dewatering permit. Stockpiling of material is optimistically projected to be in mid-2007.

Tenderfoot Mesa
These claims include two past-producing uranium mines called Sapphire and Torbyn located in the Uravan Mineral Belt; the latter mine was reopened in Q4 2006 with some minor rehabilitation. Again, material could be stockpiled as early as mid-2007, with the company expected to drill another 21,500 this year to further delineate these claims.

Personnel
Energy Fuels is run by very experienced people, most of whom were part of its predecessor company, Energy Fuels Nuclear Inc.. Indeed, the current President and CEO of uranium behemoth Cameco Corporation, Gerald Grandey, held the same positions at Energy Fuels Nuclear and its former VP Marketing and Corporate Counsel, George Glasier is Energy Fuels’ current president and CEO; the former VP Exploration, Chief Geologist, Mill Manager, Mine Superintendent and General Mine Superintendent of the predecessor company—which was the largest uranium producer in the United States in the 1980s—have since returned to upgraded roles in this new incarnation.

Stock and Future Developments
After more than tripling in just a month from the middle of October to November 2006, Energy Fuels’ stock has spent the next four months consolidating its gains and making a solid base to prepare for another run. The company had been hampered by tardiness in filing its most recent financial statements, which it has since remedied. Furthermore, its stock will likely be buoyed by approval to start trading on the bigger Toronto Stock Exchange on March 19th, with a spade of announcements expected in 2007 in regards to drilling results, permitting, and updates on mine re-openings.

With $28 million in the bank (as of Jan 7, 2007) and no debt outstanding, Energy Fuels seems poised to capitalize both as a uranium junior with production visibility and as a potential takeover candidate for one of the emerging uranium seniors, given its mines are within striking distance of Denison’s White Mesa Mill and also sxr Uranium One’s Shootaring Mill—although the company might in the end decide to build their own. Certainly, with the vast amount of work still needed to be done, Energy Fuels has perhaps an overly ambitious timeline to production, but still represents a solid uranium stock that has real assets to work with and should be in production when uranium prices are expected to peak in 2008-2009.

Another Uranium Mine Flooding: Spot Price Jumps to $90US/lb

2007-03-11T18:05:00.000-07:00

We are coming up onto a crossroads two weeks post-global correction that started February 27. The resource stock-laden Canadian TSX Venture Index dropped from 3,274 to 2,955 at closing March 5, a haircut of almost 10%. Since then, it has climbed back up to 3,127 and is looking for direction: will it rise and try to break through a double top (May 2006 being the other peak) or further correct downwards after last week's bounce?

Since the bulk of North American uranium stocks are listed on the TSXV and generally move more or less in lock and step with the exchange, overall sentiment should be gauged. However, if one is relatively assured that the correction is mostly over and done with, there seems to nothing that can obstruct uranium stocks from buoying higher.

This is because the uranium fundamental story that concretized in many investors' minds after Cameco's announcement of its Cigar Lake mine flooding back in October 2006 will now be buttressed by news of another unforseen flooding: the Ranger Mine of Energy Resources of Australia Ltd. (ERA). On March 7, ERA sent out a press release describing the aftermath of cyclone George on its uranium mining operation. First, a force majeure was declared by ERA on its sales contracts as a result of the flooding. Second and more importantly, its first quarter production is estimated to be between 20-30% lower than last year, with second quarter impact still yet to be assessed. James Finch of Stockinterview.com penned an article suggesting that the impact of the Ranger mine flooding could be the reduction of 4% of 2006 worldwide uranium production, a figure that simply cannot be made up by new production this year.

Indeed, Tradetech's March 9th report raised the uranium spot price from $85 to $90US/lb in part due to ERA's surprise announcement. It seems that the psychological $100/lb of uranium oxide will be broken sooner than expected, although analysts have already been revising their uranium estimates upwards.

Thus, as long as the broader markets remain stable, uranium stocks, especially newly-minted and near-term producers with unhedged uranium sales contracts will likely see short-term appreciation: this list includes sxr Uranium One and Urasia Energy, two uranium juniors who will merge together shortly, as well as Paladin Resources and Denison Mines; Denison, itself a recently-merged company from International Uranium Corporation and Denison Mines, is in the process of applying for an AMEX listing in hopes of attracting some of the nascent American investor interest in uranium stocks.

Broad Market Correction: Safe to Buy Uranium Stocks Yet?

2007-03-06T18:50:00.000-08:00

The rapidity of last week's events caught many investors off guard, with the precipitate being China's Shanghai Composite Index falling nearly 9%; the reason for decline, I might mention, was the government's fear of rampant market speculation, and not attributed to fears of China's economy slowing down. Indeed, one of the influential bulls of our investing world, CIBC's Jeffrey Rubin, noted that where China's economy has grown on average 9-10%/year, its stock market actually declined significantly in the years before this and last, so the correlation is certainly not strong between stock market trends and overall economic outlook in the East.

Rumors of a slowing Asian economy, US sub-prime collapse, or unwinding of the Japanese carry trade notwithstanding, markets found any and every excuse to correct downwards. However, it is important to stress, as I had before during the mini January correction, that uranium fundamentals have not changed. Whether it is commodities guru Patricia Mohr of Scotiabank (at least $90, headed to $100 end of 2007), CEOs Phillip Shirvington and Neil Froneman (>$100) of soon-to-be merging uranium mid-tiers Urasia Energy (UAEYF.PK) and sxr Uranium One (SXRFF.PK) or Australian Bureau of Agricultural and Resources Economics ABARE ($94.20 average this year, $103 average 2008), forecasts for yellowcake have only been revised upwards.

The extra haircut that uranium stocks experienced was NOT because of an annoucement from Cameco, theoretically, stating that its flooded Cigar Lake mine would be coming back online soon, but more likely was becuase uranium stocks were extremely overbought and desperately NEEDED the correction. Too many speculators, too much froth. A chart of Energy Metals below typifies the technicals of many many uranium stocks lately that scream for a much needed correction.

Judging by the double-digit rebound in uranium stocks today, coupled with my view that nothing in the broader macroeconomic world or in the uranium world convinces me something is fundamentally different now than a week ago, I venture to say that the worst is over. Not to say there will not be more correcting now and, certainly, sharp, short corrections will be present in the future, but the risk-reward balance seems to have shifted sufficiently for many uranium investors to have regained confidence already.

Casey's Energy Speculator

2007-02-28T10:42:00.000-08:00

Preface: Casey's Energy Speculator is a subscription-based publication written by people smarter than I am. Plus, if you sign up using the banner above or the link provided below, I get some revenue too!

The Casey Files:
For more than twenty years, Australia-with its rich uranium resources-has been largely closed for yellowcake mining. But now the country may be preparing to open its doors to junior uranium explorers and producers, which, in view of the Cigar Lake breakdown, would be a major step to ramping up production in the foreseeable future-and could provide some excellent investment opportunities. Below, senior researcher Chris Gilpin breaks down some key developments expected Down Under during the coming months..

Doug Casey, Casey Energy Speculator
April 29 - a Day to Watch for Uranium Investors
Australia is poised for a breakout in uranium production. The land down under hosts 36% of the world's reasonably assured uranium resources (recoverable at low cost)--more than any other country--and yet it accounts for only 23% of global output. But that picture could change drastically in the next few years.

The current opposition party in Canberra--the federal wing of the Australian Labour Party--could have the largest influence on the future of the uranium industry. Their leader, Kevin Rudd, supports a rethinking of Labour's opposition to uranium mining. The federal Labour conference takes place on April 27-29 and will be a pivotal event for Australian uranium politics.

Why? A federal election must occur in Australia sometime in the second half of 2007. Kevin Rudd is a popular figure, and polls show that Labour has pulled ahead of John Howard's ruling coalition for the first time in years. The last Morgan poll gives Labour 48% of the popular vote, while John Howard's coalition sits at 38%.

Labour holds the balance of power in each and every one of Australia's states and territories. Its regional governments' attitudes toward yellowcake vary. New South Wales and Victoria ban all uranium-related industrial activity, even exploration. Queensland and Western Australia straddle the fence, allowing uranium exploration but not uranium mining. Tasmania has no ban in place, but has never drawn interest from uranium explorers. Only South Australia and the Northern Territory (neighbors in the middle of the continent) have allowed uranium mining.

Here's why the April Labour conference could be a game-changer: Queensland's premier, Peter Beattie, says that his state will fall in line with the policy that reaches consensus at April's gathering, which could signal an immediate boon to companies working in that province.

The stakes are enormous. Because of past governmental disincentives, few of Australia's prospective uranium regions have been explored with up-to-date technology. There's big potential for a significant discovery in the Northern Territory, where, according to a November 2006 report by the Northern Territory Minerals Council, only 20% to 25% of the prospective rock units have been effectively explored.

Most likely this holds true for other regions of Australia as well. Today airborne electromagnetic surveys can yield useful data from ten times deeper into formations than they could in the 1970s. Many authorities, including the Uranium Information Centre and Geoscience Australia, believe that past exploration was superficial by today's standards and that there are several resources at depth waiting to be found.

A look at history makes it even more apparent how groundbreaking Labour's potential change of attitude could be. In 1984, the federal Labour government instituted the "three mines policy," which was intended to eventually end all uranium mining in Australia. The law stipulated that only the three uranium mines in production at the time would be given permits to export uranium: the Olympic Dam project (the world's largest uranium mine) in the state of South Australia, and the Ranger and Nabarlek mines in the Northern Territory. Provisional approvals for other would-be uranium mines were cancelled. Labour's notion was that when the three producing deposits had been exhausted, uranium mining in Australia would be finished for good. Exploration cratered, and today Australia’s known resources are little changed from what they were 20 years ago.

After John Howard's coalition government swept into power in 1996, it scrapped the three mines policy. But because state and territorial governments were all dominated by the Labour party, the industry still made little progress. In fact, the Nabarlek mine had already shut down in 1988, leaving only two mines in operation. In 2000, the Beverley mine in South Australia opened, bringing the number back up to three. And today there is the prospect that SXR Uranium One's Honeymoon project will become Australia's fourth uranium mine. SXR Uranium One received its export permit from the federal government in January of this year, an essential step for uranium production in a country that hosts no nuclear facilities.
With Labour threatening to win the 2007 federal election, that party's stance on uranium will be pivotal for Australian exploration companies and, indeed, for the global uranium market as a whole. This April's conference will provide crucial clues as to the shape of things ahead.

http://www.caseyresearch.com/learnMore.php?pubId=2&ppref=USI002BN0207A

The Importance of Cameco and Cigar Lake on Uranium Sentiment

2007-02-25T02:16:00.000-08:00

As the spot price of uranium continued a frenzied ascent to $85/lb this week, it has become apparent that at least, north of the border in Canada, uranium has become a hot button issue. Where uranium stock investing was just beginning to attract mainstream attention in 2006, scores of analysts and investors alike have jumped on its bandwagon this year.

An illustration of such is shown below, which is a graph of the total number of subscribers to my uranium stock blog. Also shown for comparison is a 1-year chart of $15.9 billion Cdn uranium giant Cameco Corporation (NYSE:CCJ TSE:CCO) and $1.1 billion Cdn upstart Energy Metals (NYSE:EMU TSE:EMC), one of several promising mid-tier uranium junior companies.

A number of observations worth noting include:

A broad market correction beginning May 2006 in both American and Canadian exchanges stalled momentum as speculative money went out of uranium; notice the flattish slope from May until the beginning of October in my subscription rate as people were less enthused after the market correction

Whereas Cameco was fairly resilient during this time, the uranium explorer Energy Metals experienced a much more severe pullback.

A dramatic turnaround occurred when Cameco announced the flooding of Cigar Lake on October 23rd. In a month my subscriber rate doubled from 300 to 600, with the steepness of the slope correlated to the price action of Energy Metals and inversely correlated with Cameco's stock.

After the announcement, there seems to be a period of "consolidation" where the market tried to digest the possibility that the mine that was to supply 10% of the world's uranium in the near future could be out commission for quite some time

As 2007 came into focus, investors continued to rally into uranium, seemingly anticipating that the upcoming announcement by Cameco in early March will confirm that Cigar Lake would not be producing for a number of years; thus, the favorable supply-demand imbalance would continue to be bullish.

It is important to note that Energy Metals is not the only junior uranium company to exhibit this type of stock pattern; one can take a look at Fronteer Development Group Inc. (FRG) and Uranerz Energy Corp. (URZ), as well as any number of companies listed on the Canadian exchanges (comprehensive list here) to confirm this point.

Cameco Corporation CEO on RoBTV

2007-02-20T23:39:00.000-08:00

RoBTV: Can Cameco Fix Cigar Lake?

Jerry Grandey, CEO, Cameco

Where Things Stands Now at Cigar Lake

We are now in Phase I of recovery, intercepting the collapsed area, putting concrete into tunnels trying to get effective seal, go on now for one month, maybe a bit longer..hopefully in few months pumping mine out

How Has It Changed Estimates for Coming Year

Remember Cigar was not in production but development..2007 no impact on objectives..mine was supposed to be in production in 2008. In March we will let people know when it will likely start production and the added cost that will be incurred in the cleanup exercise

Like it or not, the coming announcement of Cameco is anticipated by all, mostly because, in my opinion, investor sentiment is key in this speculative phase of the uranium investing cycle.

As liquidity continues to pour into TSX Venture and uranium stocks in general--bulled by a new Sprott report--some have begin to question valuations. In an honest moment, I do worry that market psychology (greed) during these times often displace logic and analysis; case in point, I can make much stronger cases for some of the beat-up gold microcaps than their uranium counterparts. Be that as it may, a keen eye on the broader market and a smidgeon of self-discipline may be the saving graces in this ever-increasingly volatile uranium investing world!

Uranium Stock Profile: ENERGY FUELS (CVE:EFR)

2007-02-18T21:48:00.000-08:00

ENERGY FUELS (CVE:EFR)

Energy Fuels Inc. is a Toronto-based mineral exploration and development company with uranium and vanadium projects located in the States of Colorado, Utah and Arizona, through its wholly-owned Colorado subsidiary Energy Fuels Resources Corporation, and with gold, base metals and platinum group properties located in Newfoundland and Quebec and the Roberts property in Northern Ontario, which is prospective for uranium.

It is also a uranium junior that is on the cusp of production visibility, but needs to clear up several outstanding issues. The company was profiled by Lou Shizas a few weeks ago on RoBTV. Following is a summary of Schizas, with my own commentary mixed in:

Lou Schizas, equities analyst, Report on Business Television

On Properties
Yes they "may" begin production on some properties, mine in Colorado, they plan 2-3 hundred tons/day, existing mine site that they rehabiliting..they do have drilling permits in place in 2007 on that property so they want to extend that mineralization, prove more deposits..they also have other preexisting minesite, "could" begin in 2007, spend $2 million for rehabilitation..and the Tenderfoot plan, 100 tons/day, early-mid 2008

I think realistically, 2007 production is out of the question, although any uranium production by 2008 would force many people to reevaluate this company; still, I agree with the emphasis on "may" and "could" from Lou because there is still much work to be done.

On Stock Chart
I see vertical = stick --> pennant, usually when you work this out, break to the upside..it is little bit long in the pennant formation but it is definitely something to look at overall..I think drill results and operating environment will be catch-all..if you can find some support at these particular levels, it has been a great wealth generator..now we have to see them perform..

The flag in a pennant formation does not last 3+ months, as has been the case for EFR, although the stock does look to be forming a symmetrical triangle and has hit its Fibronacci retracement. I would favor a continuation of the uptrend for EFR, but one of major current issues that the company has to deal with is to file its delayed financial statements; the gaffe was blamed on the increase in business activity of its wholly-owned U.S. subsidiary during the Company's fourth quarter for the financial year ended September 30, 2006. Investor uncertainty around this issue certainly seems to be one of the factors preventing Energy Fuels from taking another run up and expanding on its $170 million market cap.

Overall, an intruiging stock, certainly worth following up on..

Feb 14 Uranium Stocks Update: Ur-Energy (TSE:URE)

2007-02-14T18:40:00.000-08:00

The Case for Ur-Energy

As we digest the completed merger of IUC and Denison and the coming merger of sxr Uranium One and Urasia Energy, consolidation activity in the uranium sector will only accelerate as emerging seniors look for accretive value. Although I still believe that the proposed SXR/UUU senior Uranium One will perform well, despite the added political risk as suggested by some analysts, the upside of its stock will take time to realize, much in the same way that Denison Mines (TSE:DML) seems to be base-building at present.

In fact, I see more immediate value in some of the uranium juniors, especially those with production visibility. Of course, one of my past picks, Ur-Energy, comes to mind. Here is a list of uranium juniors with market capitalizations in its vicinity:

JNR Resources (CVE:JNN) 259.8M
Western Prospector Group (CVE:WNP) 261.3M
Strathmore Minerals (CVE:STM) 295.3M
Ur-Energy (TSE:URE) 297.6M
Strateco Resources (CVE:RSC) 297.8M
Tournigan Gold Corp (CVE:TVC) 326.7M

URE, with its scheduled uranium production via ISL in Wyoming by 2008, is probably the earliest uranium miner out of the entire group, and to me, represents the best takeover target for any emerging senior uranium looking to add uranium projects that will actually come on-line in a relatively short period of time to capitalize on current prices. To compare, JNR and Strateco are exciting exploration plays, to be sure, but the prospects of actually mining the uranium out are years away.

Some have complained that URE does not promote itself as well, and in truth, it seems like there is a certain amount of truth to it; Paul van Eeden comes on RoBTV regularly to talk about Strateco and Strathmore has its own stable of publicists.

In any case, a look at the six month chart of URE shows two sharp rises followed by several months worth of consolidation and steady accumulation; Bollinger Bands in recent months have increasingly narrowed due to decreased volatility. The last few months have formed what might be interpreted as an ascending triangle, which if true, would be a bullish indicator. Volume has also picked up in recent days after contraction in recent months, culminating in today's 9% rise to $4.40 on three times the normal trading volume. We might indeed be witnessing the next sharp rise in URE, which hopefully, would knock out the old high of $4.70.

Thus, technically and fundamentally, I continue to like Ur-Energy.

Feb 12 Uranium Stocks Update: sxr Uranium One (TSE:SXR) + Urasia Energy (CVE:UUU) Merger (Part I)

2007-02-12T11:49:00.000-08:00

The uranium M&A game is heating up, with today's proposed merger between two of my uranium picks SXR and UUU. Without further ado, let's hear what the CEOs of the two respective uranium juniors had to say about this proposed all-stock merger on RoBTV this morning and I'll save my comments for later:

Neal Froneman, president and CEO, SXR Uranium One
Why Urasia?
(1) had production stream
(2) presence in most appropriate uranium resource area in the world = Kazakhstan

Phillip Shirvington, president and CEO, Urasia Energy
Business in Kazakhstan
(1) fine doing business there, living standards improved over last 15 years
(2) "benevolent dictator", things work smoothly, stable country, good place to do business
Why Shares, Not Cash?
(1) shareholders continue to ride up on uranium
(2) uranium has a lot further to go than this

Neal Froneman, president and CEO, SXR Uranium One
Primary Listing
(1) Toronto first and foremost, we are Canadian company, benefits of raising capital
(2) creates emerging senior uranium producer, alternative to Cameco
Uranium Price Prediction
(1) I certainly believe you will see breakthrough >$100 this year, I think it will spark much higher than that
(2) with low cash cost $10-12/lb, we do not need to model a company on much higher uranium process (than $50-60)

Phillip Shirvington, president and CEO, Urasia Energy
(1) we also believe that uranium price will go through $100 this year, we are out there in the marketplace selling, we know how tight market is, see market continuing to tighten

Neal Froneman, president and CEO, SXR Uranium One
Cigar Lake
(1) I personally believe that Cigar Lake has driven sentiment more than supply
(2) even in full production, Cigar Lake supplies 10% of production, significant, but I do not think it is enough to really upset market
(3) Cigar Lake highlight how difficult it is to bring complicated mining projects
Further Acquistions?
(1) yes, as long as value accretive

Cameco Q4 Earnings (Part II)

2007-02-10T23:55:00.000-08:00

Part I explored the reaction of one analyst to the earnings and Cigar Lake issues of Cameco. Shifting gears slightly, I was interested to see what management had to say about the overall uranium market, the forces at work and how they ultimately influence yellowcake price; the following is from an excerpt of their recent conference call, published by SeekingAlpha:

Discretionary purchases and those are purchases not used to fill actual near-term fuel needs accounted for 73% of total transactions on the spot market last year. And that's a record level and an increase from 2005 when discretionary purchases accounted for 66% of spot volumes. Utilities and investment groups accounted for about 50% of spot volumes, as utilities continued to build inventory and investment groups continued to take positions in the rising market.

This unfortunately, adds end-stage volatility as everyone piles onto the uranium bandwagon;, because at some point, investment groups will need to unload their supply of uranium, although that will probably not happen anytime soon. It is something to always keep in the back of the mind, however.

Over 80% of spot transactions occurred off market, as buyers stayed away from public request for quotes in order to avoid increasing visible demand and driving prices up more quickly. About half of the 2006 on-market activity was sold by an auction, and those auctions were important in adding significantly to market transparency.

Does this mean that the actual price could be higher?

The first several weeks of 2007, it seems that spot price remained flat at $72. This plateau was a result of unwillingness on the part of spot sellers to offer fixed prices. With the expectation that spot prices are still under considerable upward pressure, sellers have been reluctant to commit to a fixed price, which would have them leaving the money on the table. Now, last week, the spot price resumed its upper trend and now stands at $75. Moving to the long-term market, the average long-term price indicator at the end of the fourth quarter was also $72, about double that of year-end 2005. And as in the case of spot price, long-term price has moved up since then this year and also stands at $75. As was the case with spot offers, sellers were reluctant to offer base escalated pricing under term contract fearing that they would miss upward momentum in the market.

Great news for uranium stocks like Paladin, SXR Uranium One, Urasia, Denison, as well as other uranium juniors with near-term production visibility. They seem to have every confidence that the uranium oxide price can only go up in the near-term, and because of this confidence, I myself look at the uranium investing landscape and can comfortably sink my money into various stocks without worrying about a catastrophic collapse, at least for now!

Cameco Q4 Earnings (Part I)

2007-02-08T14:40:00.000-08:00

As the uranium world holds its collective breath for Cameco's impending Cigar Lake remediation plans, the company came out with some fairly disappointing Q4 earnings. Cameco earned $40 million or 11 cents per share for the three months ended Dec. 31, 2006, compared with a profit of $83 million or 23 cents a share the year before; a more in-depth rundown of the numbers can be found here.

Since Cameco and Cigar Lake are vital to understanding the nuances of uranium stock investing today, I would like to spend a few days focusing on the company, and especially the types of questions asked during its conference call. Here first is one analyst's reaction on RoBTV:

Victor Lazarovici, analyst, BMO Nesbitt Burns

Earnings
results are weaker than expected, somewhat disappointing, main reason being costs much higher than expected..headline earnings per share 11 cents/share, which included Cigar Lake costs that were expensed and equipment write-offs..we have adjusted the numbers and taken out the one-time charge, we have left in the expensed items and calculated operating earnings of 14 cents/share, somewhat better than 11 cents/share..the amount of Cigar Lake cost we left in at 1 cent/share..we were looking for 19 cents, conscensus number was 20 cents

Cigar Lake
we know it is very serious situation, will take months of drilling which began several months ago to assess what remediation work will be required and the cost..it will take them hundreds of millions of dollars I suspect and years to recover from the incident..I think it is really just too early to tell, this mine is several hundred meters underground, flooded, they have no way of accessing it, do not know how severe the damage to the roof where the water inflow from and whether or not proposed fix will work..

Uranium Price
keep in mind that Cigar Lake was not scheduled to produce for several more years and all utilities that consume uranium fuel have supplies locked in several years ahead so there was never any risk of shortages..what we have seen is producers of uranium working to meet utilities need several years forward where Cigar Lake material would be shipped to market..spot market is extremely thin segment of market, I do not think underlying fundamentals will change..utilities will work around Cigar Lake issue..there are certainly many similarities to market bubbles and there are currently no supply-demand issues but market reacts to all sorts of signals

RoBTV: Peter Grandich

2007-02-05T02:51:00.000-08:00

Peter Grandich, editor and publisher, Grandich Publications

STRATHMORE MINERALS (CVE:STM): well-managed, had foresight to see uranium bubble before anybody else did, acquired lot of property, went sideways..uranium bubble is just starting its bubble..think what you are going to see is STRATHMOREs, with legitimate projects and true production potential separating themselves..the one firm around the world that always seems to be ahead of the crowd is Sprott..I would soon as bet on them as against them

PAST PICK URANIUM PARTICIPATION CORPORATION (TSE:U): they could and will eventually be sellers but uranium earmarked for $100..U trades at premium, I would not be buyer not because I do no think uranium will go up, but I do not think you get leverage anymore..uranium is viable energy source, never thought that in my lifetime I would see a new nuclear plant

CROSSHAIR (CVE:CXX): we first talked about it here at 35-40 cents, client of ours..outstanding fundamentals, following in footsteps of AURORA ENERGY (TSE:AXU)..Crosshair about a year behind in growth path..better when they were 35 cents..outside of uranium turning down, my long-term target is that the company could achieve a billion market cap, $10 in 12-24 months

Brendan Kyne, chairman and CEO, Leeward Hedge Funds

CAMECO CORPORATION (NYSE:CCO TSE:CCJ): this is a difficult one..stock has done so well for investors over 5 years..over last year, directionless..selling uranium at dramatically less than $72/lb..growth profile growing forward aligned with Cigar Lake..Cameco buys lot of uranium from Russia, I am not a fan of Putin..nationalizing assets..Russia is supplying Cameco with dramatically discounted uranium..I would not put it past Russia to suddenly have production problems..we are actually shorting Cameco..want to be exposed to unhedged spot price..SXR Uranium One (TSE:SXR), Urasia Energy (CVE:UUU), Paladin Resources (TSE:PDN), all three are high-grade acquisition targets

SXR URANIUM ONE (TSE:SXR): one of the themes in uranium market is M&A activity..Cameco will be buying near-term producers..unhedged production, I think there is distinct opportunity because I suspect Rio Tinto wants to get into uranium themselves..uranium conference this year had six multinational teams complete with analysts..we own every single near-term producer

UEX CORP (TSE:UEX): interesting company, very volatile..2007 will be significant year..now that crude prices appear to be bottoming and Bush announcing wanting to double SPR, UEX worth looking at..we have done tremendous amount of work in uranium, there will be 22% in demand by 2011, take out the largest uranium mine, equivalent to Iran, Iraq, and Kuwait in oil production, and you say prices will decrease?

PALADIN RESOURCES (TSE:PDN): I own large position, Paladin acquisition candidate for SXR Uranium One, Rio Tinto, Cameco..got two things working: higher commodity price plus acquisition multiple..when US dealers talk to us about uranium, they only know about Paladin

TOP PICK URASIA ENERGY (CVE:UUU): like it, own it, love it..what I really like it is near-term uranium producer in Kazakhstan, supply growth over three years..Cameco also developing mine in Kazakhstan, logical acquisition..unhedged..this name could be very good name over next two years

Feb 4 Uranium Stocks Update: First Uranium (TSE:FIU)

2007-02-04T03:21:00.000-08:00

First Uranium, a new gold and uranium company spun off from parent Simmers & Jack in South Africa, recently announced that it would seek a secondary listing on the JSE during the first half of 2007, as well as provided updates on its two main South African projects..

EZULWINI PROJECT
FIU has initiated underground development two months ahead of schedule, although initial gold production has been shifted from Q2 to October of this year, eventually building towards 363,000 ounces/year by 2010; uranium production is expected from Ezulwini in June 2008.

BUFFELSFONTEIN PROJECT
Instead of atmospheric leaching, FIU is thinking of using pressure leaching, which could result “in an estimated 27% reduction in the uranium plant operating costs, more importantly, it increases the NPV of the project by 15% and reduces the uranium cash cost of production for the Buffels project by an estimated 9%”. The company also plans on completing a detailed feasibility study on Buffelsfontein in April of this year.

The stock has ran up slightly ever since its $7.00 initial IPO and is comfortably filling the niche of a mid-tier uranium junior, albeit with the added twist of being a significant potential gold producer. It is as yet relatively unknown, with no questions about this company from RoBTV viewers, very little commentary from uranium analysts, and a fairly quiet stock message board. I myself have accumulated a few shares and will be interested to see how the company executes on its plans in the upcoming months.

IPO: Uranium Focused Energy Fund

2007-01-31T21:40:00.000-08:00

Just yesterday, Middlefield Group, with services in Canada through Middlefield Capital Corporation and managers of several mutual funds, announced that it was filing a preliminary prospectus in relation to the IPO of a new Uranium Focused Energy Fund. Middlefield already has several uranium stocks in its mutual funds, most notably the Middle Group Resource Class, which has Denison Mines (TSE:DML) 7.56% and SXR Uranium One (TSE:SXR) 6.44% as the two of the top three holdings; however, because that particular fund also has a lot of oil and natural gas exposure, its 1 year return of -7.85% was probably the impetus for starting a uranium-only mutual fund.

Let us parse through what Middlefield has to say about this new uranium fund..

In light of the significant capital and time requirements associated with the development of new uranium mines, the Advisor expects uranium prices to remain strong over the life of the Fund, which will terminate on December 31, 2013.

They clearly expect uranium supply-demand fundamentals to remain strong until 2013, which is a longer period of time than I would predict; it is widely acknowledged that the “easy money” has been made in uranium, but that there is upside for investors over the next 12-24 months.

the Portfolio will be focused on the securities of issuers that operate in or have exposure to the uranium sector, supplemented with the securities of other energy related issuers that operate in or have exposure to the energy sector. The Advisor expects that the weighting in uranium related securities will comprise approximately 75% of the value of the initial Portfolio and will include such companies as Cameco Corp., Paladin Resources Ltd., Denison Mines Corp. and sxr Uranium One Inc.

This may have an impact on the latter three companies, all of them near-term or already producing uranium. Depending on how enthusiastic investors are in this uranium fund, I expect these three companies to receive a further boost from institutional buying.

A uranium-only mutual fund is an interesting option; certainly, those investors who are looking for exposure to uranium but do not know what risk tolerance they are willing to take would be relieved to buy essentially a basket of uranium stocks.

8th Uranium Stocks Pick: International Enexco (CVE:IEC)

2007-01-30T02:19:00.000-08:00

International Enexco (CVE:IEC)

Shares Outstanding = 16,674,651
Shares Fully Diluted = 24,562,057

Mann Lake Project
30% owned by IEC
35% owned by Cameco (NYSE:CCJ TSE:CCO), primary operator
35% owned by UEM

Located 30km from Cameco's McArthur mine (then again, who isn't close?), this project has gone unnoticed by virtually everyone in the uranium investing community until recently. However, summer 2006 drill results were arguably the most impressive out of any uranium explorers, drilling two holes totalling 1,259m with two highest grade intervals averaging 7.12% over 0.25m and 5.53% over 0.4m. Granted, these are over small distances, but the sheer uranium concentration was beyond anything reported that drilling season. This year, the exploration budget has been raised to $1.5 million, with an addition 7-8 drilling holes that should be completed by the summer. Expertise is not an issue, with uranium powerhouse Cameco assuming responsibility as primary operator of the project.

Contact Property
In addition, IEC also owns the Contact Property in Nevada, a project with NI 43-101 compliant resources of ~150 million indicated and another ~250 million inferred pounds of copper and 3.7 million ounces of silver that is currently being developed with the intention of mining the base metal. On January 10, 2007, they announced the commencement of phase one of a three-phase drilling program, with the planned purpose of the next two phases to upgrade resources from indicated and inferred to measured and indicated, paving the way for pre-feasibility studies and other pre-production processes. Phase one is expected to finish late March of this year and IEC will report results as soon as they can. Production optimistically is aimed at late-2009

Most Recent Insider Trades
Jan 9 Lloyd Bray Acquisition 20,000 @ $2.15
Jan 15 Arnold Armstrong Acquisition 8,100 @ $2.10
Jan 17 Paul McKenzie Acquisition 16,500 @ $1.50

IEC closed an $8.9 million January 5th and currently has $16 million in working capital. As you can see, the stock is locked into a long-term bullish trend, a series of progressively higher lows and higher highs, and just recently broke sharply to the upside on massive volume. It seems that word is finally getting out on this small uranium explorer with potential for striking highly concentrated uranium. With Cameco doing the work and the uranium gurus at Sprott owning roughly 10% of the company (as of October, 2006), and possessing an actual copper asset in addition to uranium prospects, International Enexco seems to be well-positioned for a continued run in 2007. CEO and President Arnold Armstrong directly and indirectly owns ~4 million shares and the rest of the management team and director own various chunks as well; there seems to not have been any insider selling that I could find

All in all, IEC is obviously the most speculative uranium play that I have recommended, but could represent a nice opportunity to invest in a cheaper explorer that has yet to gain widespread exposure, even in the mainstream uranium investing community, but with tremendous potential secondary to impressive past results.

Jan 29 Uranium Stocks Update: Denison Mines (TSE:DML)

2007-01-29T01:51:00.000-08:00

Peter Grandich, editor and publisher, Grandich Publications

DENISON MINES (TSE:DML): great thing about DENISON is that it replaces CAMECO CORPORATION (NYSE:CCJ TSE:CCO) in my portfolio..I think Cigar Lake will have much more delays..make people realize there are other uranium plays..I think what is going to happen is that institutions especially in US will finally wake up to uranium and target will be exceeded

David Cockfield, senior VP, Leon Frazer & Associates

DENISON MINES (TSE:DML): it has had quite a good run..seems to be one of the emerging offsets to Cameco in terms of uranium play..reasonable amount of ore, production..I am looking at it myself..starting to look respectable..going sideways, I would like to see keep at these levels..not quite ready to say it is a buy yet

Robert Floyd, R.A., Floyd Capital Management

DENISON MINES (TSE:DML): I think supply-demand matrix obviously really strong..crux of problem CAMECO (NYSE:CCJ TSE:CCO)..they are really largest uranium producer..DENISON MINES consolidator, building reserves..very interesting company..some of the research reports for company are not pushing price targets..$12-13..if uranium price is pushed up dramatically, targets move higher but for time being, not terribly aggressive on price..traders would take some profits and looking to reposition..uranium decent area to invest, question is price..how much do you want to pay? Need to look at reclamation at Cameco

Kyle McKay, portfolio manager, Leeward Hedge Funds

DENISON MINES (TSE:DML): done really well as have most uranium junior energy companies following Cameco Cigar Lake flooding..active, recently merged with IUC, producing 1 million lbs of uranium this year increasing to 4-4.5 next several years..one issue is Denison does have hedges in place for certain amount of production, roll off in 2008..I think there are other opportunities within uranium intermediate junior level..PALADIN (TSE:PDN) looks interesting, SXR URANIUM ONE (TSE:SXR) which had a very difficult day today, URASIA (CVE:UUU) as well

Jan 23 Uranium Stocks Update: Ur-Energy (TSE:URE)

2007-01-23T14:36:00.000-08:00

UR-ENERGY (TSE:URE) Quarterly Webcast

(a) 342% return in 12 months
(b) believe they have 10,000 shareholders, 5X as much as a year ago
(c) financed 3 times: August ($500,000 and $18.75 million) and (November $2.5 million); company is very comfortable able to satisfy all 2007 obligations and some of 2008, can take advantage of market conditions for next financing
(d) fully diluted ~79 million shares with only ~270,000 warrants and 5.4 options
(e) average share volume >1 million last 3 months
(f) cash on hand $28.7 million, potential cash $38 million
(g) 43-101 compliant resources of 24 million pounds, 88 million pounds historical
(h) 2 major projects being permitted and engineered for ISR production
(i) filling a strategic production niche in the USA; <5% of USA supply from USA mines
(j) Bootheel and Radon Springs intermediate development projects after Lost Creek and Lost Soldier
(k) exploration projects Screech Lake, Eagles Nest, Harding, Kaycee, Radon Springs, North Hadsell, Bugs
(l) Lost Creek Project: expect this to be first producing project late 2008 with wellfield construction; permit to mine application ~June 2007
(m) Lost Soldier Project: expecting pump test results; in several different zones versus Lost Creek, will be more complex
(n) all permitting activities on schedule and within budget
(o) like to emphasize that they are company with full range of exploration, development and near-term production projects
(p) $6 million budgeted for Lost Creek and Lost Soldier in 2007, $1.5 million for exploration and land acquisition in US, $2.5 million for Canadian expenses
(q) in Q1 2007, announcement of signing of toll milling arrangement with plant operator in Wyoming and completion of independent pre-feasibility study on production projects
(r) announcement of JVs, strategic alliances anytime in 2007

Q&A

Labor and Equipment?
good drill contractor, three drill rigs lined up to start in March, will not impede Lost Creek and Lost Soldier projects..continue to look for experienced people, is a bit of a problem, feel stretched in some areas but hiring regularly

US Listing?
they would have preferred to initiate process last year but decided not prudent use of funds..in 2007, want to expand retail distribution, expect application to be made within Q1..looking at both AMEX and NASDAQ, two frontrunners

Lost Soldier
average ISL leaching efficiency 68%; Lost Creek gives better leaching efficiencies, flow rates, seems to management to be somewhat simpler than Lost Soldier..makes sense to move Lost Creek first

Pre-Feasibility?
expect mid-year 2007, will put out summary of it, will be out before application to mine

Radon Springs
quite a lot of volume but low grade..geographic complexities that they were not quite ready to address yet..not first choice to moving forward with project, as much as grade as anything else..hope to have at least portions for ISL but still work needs to be done..

Bootheel Project
Southeast Shirley Basin project..2.7 million lbs historic resource, was owned by Cameco up until 2000..difficulty moving forward there is more of land problem than geologic, working with US land is not as easy as other countries..multiple mineral owners making more complex..feel close to having that solved..need to start drilling programs, testing them before do more planning

January 2006 Decision
would not move every project towards N43-101 resources..we felt that until a project is really ready to advance and move forward, not best time to use money and resources, lot of balancing, comparison between projects..intend on moving all projects in some manner, either moving to development stage or sloughing them off..

Selling Out vs Independent Uranium Company?
No comment

Potential Water Problems?
Obtaining water not particularly a problem, need to license wells, has not been a problem..ISL creates certain amount of bleed, somewhere in the range of 1.5-2% of total water produced..because of large volume, can be quite significant..can be taken by distillation, evaporation or deep injection..in the process of permitting deep disposal wells

Impression
As usual, Ur-Energy strikes me as having one of the most pragmatic, experienced, and transparent management teams in the uranium industry. Whether they will progress on their own or be tempted to sell out to a sweetened offer is almost irrelevant; their shareholders will profit either way. I firmly believe in this company and personally bought more shares when they were consolidating around the $3.70-$3.90 level.

Previous Uranium Bear Weighs in on Cigar Lake

2007-01-22T11:11:00.000-08:00

Paul van Eeden, president, Cranberry Capital

They probably at Cigar Lake now already have the ability to freeze from underground. So I don't know that the warmer temperatures -- I do not know to what extent the warmer temperatures are impacting them. But certainly if you do not have freeze up on surface then it would complicate matters for exploration drilling. But I am -- I do not know whether it is going to hamper the rehabilitation of Cigar Lake. But the rehabilitation of Cigar Lake is a very serious issue for both Cameco and to the uranium market. It is not going to be easy. -- For Cameco and to the uranium market. I am skeptical on Cigar Lake only because people forget only about three years ago Cameco had flooding at McArthur river and it was a very similar incident. Now they had essentially a similar event at Cigar Lake shutting down Cigar Lake, in my opinion, almost undetermined period of time because I think it is going to take a long time for them to figure out how to deal with that. It is not going to be easy. Until they deal with it I think the uranium market is, is going to be under pressure except for the fact that there was so many investment funds coming into the uranium space. And that all the uranium that they bought in the last two years, which caused the uranium price to move up before Cigar Lake flooded, that inventory that these investment funds now hold is potential supply. If that potential supply was to be coaxed into the market then you could see the uranium price doing the opposite of what people would expect. It can soften even though Cigar Lake isn't resolved. If I were not for Cigar Lake I would be an incredible bear on uranium prices. But Cigar Lake is very material. In my mind changes a lot. Cigar Lake takes out about 12% of worldwide demand. And demand is about almost twice as much than mine supply. So Cigar Lake accounts for almost 20, 24% of what we banked on as supply post 2008. That has now been postponed. This is a very major event.

RoBTV: Patricia Mohr

2007-01-18T05:13:00.000-08:00

Patricia Mohr, vice president of economics, Scotiabank

I have been bullish for number of years now and our average price for spot uranium is $80..averaged $48.10 last year, right now around $72..by end of this year could well be approaching $90..Cigar Lake had huge immediate impact because Cigar Lake would have been first major increase in new mine supply in world..we have not seen much incremental mine supply for really a decade and Cigar Lake would eventually ramp up to 18 million pounds, but now delayed at least a year, probably more..immediate price increase, moved up a lot more since announcement of flood

RoBTV: Jean-Francois Tardif, Sprott

2007-01-15T12:53:00.000-08:00

Jean-Francois Tardif, portfolio manager, Sprott Asset Management

ENERGY METALS (TSE:EMC): we own basket of uranium..ENERGY METALS has been one of primary holdings, still continue to own it..we like it..they have a lot of uranium on the ground, some proven, some inferred..US has largest shortage of uranium versus consumption..assets in US are going to be worth lots of money down the road

UR-ENERGY (TSE:URE): another uranium investment that we have..again US asset..rumors of this company to be taken over, possible..I think this company could be taken over in 2007

PELE MOUNTAIN RESOURCES (CVE:GEM): early uranium..we bought at private placement, very happy..goes to a basket because early exploration but not something I would buy here because of run..500% this year

SOLEX RESOURCES (CVE:SOX): indeed we like it..I have to admit that we own many uranium stocks..probably about 25..this one is exploration..I like the strategy of SOLEX..get some land, attractive projects, get somebody else to drill..not dilution going forward..still good upside from here

PAST PICK: WESTERN PROSPECTOR GROUP (CVE:WNP): uranium in Mongolia..hammered in 2006 because of Mongolia and lawsuit..if you are willing to take risk, this is one of cheapest stocks to buy

FORSYS METALS (TSE:FSY): uranium, have project in Namibia, same country as PALADIN RESOURCES (TSE:PDN), grade lower, cost should be higher, water issue as well..if uranium north of $100, this project will be able to produce uranium but take years and years..because of run, be careful in short-term..

DENISON MINES (TSE:DML): stock will do fine under a basket, more advanced company..not something that Sprott owns..

PALADIN RESOURCES (TSE:PDN): second stock you can buy, CAMECO (NYSE:CCJ TSE:CCO) the largest..PALADIN just started producing, no longer cheap but will stay expensive..for large cap investor, you can only buy CAMECO and PALADIN..we own it in our funds

SOLEX RESOURCES (CVE:SOX): client of ours..it really took off in last couple months due to runup in uranium and quality of projects in Peru..would like to see some consolidation in SOLEX because it has had big run..corporate-wise still has long ways to go..

CAMECO CORPORATION (NYSE:CCJ TSE:CCO): I am not a geologist but I know some of the best in the world..privately many of them they tell me that they think there is a good chance that Cigar Lake is lost..on that basis, it is not first hand, from what I hear..I do not think Cameco deserves to be number one uranium play..would sooner own DENISON MINES (TSE:DML)..look elsewhere

CROSSHAIR EXPLORATION (CVE:CXX): continues to be in my biased view single best junior uranium stock..world has woken up to Labrador play..AURORA ENERGY (TSE:AXU) I think will be a takeover target..have not changed fundamental view at all

Uranium Stock Profile: FIRST URANIUM CORPORATION (TSE:FIU)

2007-01-10T22:54:00.000-08:00

Introduction

In case you missed it, there is a new mid-tier uranium junior that just started trading several weeks ago. It is not one of my picks yet, but I thought this was a good time to start a section in my blog on profiling more uranium stocks.

First Uranium (TSE:FIU) is a new gold and uranium company that just completed its $233 million IPO. Its parent company Simmers & Jack will spin off two projects in South Africa called Ezulwini and Buffelsfontein to First Uranium: the main objective of Ezulwini project is to re-open and develop the underground mine while constructing a tailings recovery facility for the Buffelsfontein project. Simmers & Jack still retain more than two-thirds of First Uranium.

The company cites exposure to both uranium and gold as a "strategic commodity mix" and expects produce gold in the 2nd quarter of 2007 for the Ezulwini project with uranium being first produced from the same project by the end of 2008. The Buffelsfontein project is expected to produce both uranium and gold by mid-2008. Any uranium production next year represents a very serious claim and First Uranium must believe that it can do such, advertising near-term production as its very first "Business Strength" in their prospectus.

With the IPO money, First Uranium intends to use the bulk of it on the two projects, about $89 million on Ezulwini and $62 on Buffelsfontein

Ezulwini Project

First Uranium will recommission the underground uranium and gold mine. There are a number of reef packages, including the Upper and Middle Elsberg reefs which the company will focus on. Measured and Indicated Reef includes just over 2 million ounces of gold and 6.7 million ounces of uranium. There is some engineering work to be done, but the plan is for a 19 year mine life for Ezulwini.

Buffelsfontein Project

First Uranium wants to build a recovery plant for this mine that contains a total of 2.7 million ounces of gold and 42.7 million lbs of uranium in measured and indicated, both of much lower grade. The goal ramp up production after three years to produce 138,000 ozs of gold and 950,000 lbs of uranium a year. Again, the mine life is fairly long at 14 years. However, the caveat with Buffelsfontein is that First Uranium needs to convert their old mining permit to a new one that lets them mining in the tailing dumps.

Personal Thoughts

First Uranium is an interesting play of two very hot metals and is a company that comes from an impressive lineage; Simmers & Jack was THE stock to own in the JSE in 2006 and has established itself as one of the most promising South African mining firms. First Uranium's goals of near-term production of gold and then uranium, ramping up to 380,700 ounces of gold and 1,534,600 pounds of uranium in 2009, is something that does intruige me; however, one must consider that several important steps need to be taken before the company becomes a full-fledged gold and uranium producer. The stock debuted at $7, ran up to almost $9 before being caught in the uranium stock meltdown where it currently hovers just under the $8 mark.

Uranium Stocks Correcting IV

2007-01-10T00:27:00.000-08:00

Indeed, the broader market was not satisfied with just a three day correction and have retraced further. Uranium stock were pounded today, speculative ones moreso than producers, with some of the more precipitous parabolic stocks dangerously close to their 50 day MAs. Opportunities to buy uranium stocks will arise as a result of this correction but the entry point remains uncertain.

Peter Grandich of The Grandich Letter was on RoBTV last Friday and I really liked his comments:

On Uranium:
I think uranium stocks going through a correction, good that they are..I am still extremely bullish, $100/lb uranium when not if..being bullish since $18, raising target price thrice, just raised from $75 to $100..only very early concern that I would express is starting to see some froth in junior resource side..overconfidence..if it continues and shares double or triple without a lot of low volume, I would grow more concerned..$100 fairly safe bet, think juniors still have multiple returns in them

Although tempting to buy some uranium stocks right now, I still see more pullback ahead as the broader market figures to bottom out sometime in the next week or two. Remember, the supply-demand fundamentals of uranium remain the same, unlike many base metals at the moment; for example, inventories even in high-flyer zinc have gone up in the LME and that metal has corrected 17% just this year.

Jan 8 Uranium Stocks Update: sxr Uranium One (TSE:SXR)

2007-01-08T14:10:00.000-08:00

SXR Uranium One (TSE:SXR) received a nasty surprise today when mining giant RIO TINO (NYSE:RTP) pulled its offer of the Wyoming Sweetwater mill and adjacent properties to the uranium junior. The reason, of course, being that the Cigar Lake impetus has rocketed uranium prices and the original $110 million offer by SXR in the summer now to Rio Tinto does not seem to make as much sense. SXR shares were down sharply in today's trading session, shaving 7.8% as investors reacted disappointingly to the news.

So now, the company has several challenges: first, to seal its other 2006 summer deal with US Energy Corp for the Shootarang Mill in Utah, and secondly, to figure out what to do with its pile of cash; it had recently completed a $155 million offering of convertible debentures. The company already has said that it would not seek to purchase uranium explorers; personal speculation puts out the logical possibility that it would seek to buy one of the uranium near-producers with American properties: UR-ENERGY (TSE:URE), ENERGY METALS (NYSE:EMU TSE:EMC), STRATHMORE (CVE:STM), URANERZ (AMEX:URZ) are candidates, although Energy Metals has a generous market cap of around $650 million, while Ur-Energy (~$280 million), and Strathmore ($225 million) would be somewhat more palatable.

Uranium Stocks Correcting III

2007-01-06T01:24:00.000-08:00

Trading week was done with progressively smaller corrections in both the TSX and Venture Exchanges, with some opportunistic buying at the end as bargain hunters stemmed the red tide somewhat. Uranium stocks were fairly mixed as a whole, with about half of the top twenty uranium junior by market cap rising and, in general, none of them swaying by more than a few percent. Whether or not this signifies a bottoming out of the correction is uncertain, however, as one needs to look at the broader market. In the past year, the TSX to me has had two significant corrections of >500 points and they both lasted longer than three days. Whether or not this trend continues, however, is a matter which I feel unqualified to settle. I myself have been hunting for some reasonably-priced stocks: UR-ENERGY (TSE:URE) is one of my picks that seems to be fairly attractive at the moment compared to its peers.

Uranium Stocks Correcting II

2007-01-04T23:55:00.000-08:00

Another huge correction for both the TSX and Venture Exchanges brought further correction in the uranium sector, with 18 of the top 20 by market capitalization uranium juniors in the red; only STRATECO RESOURCES (TSE:RSC) and LARAMIDE RESOURCES (TSE:LAM) gained modestly while heavyweights CAMECO (NYSE:CCJ TSE:CCO), PALADIN (TSE:PDN), URASIA (CVE:UUU), and SXR URANIUM ONE (TSE:SXR) all dropped between 2-5% in value. Although many have been caught in this correction, the smart ones know that uranium fundamentals have not changed, the supply-demand imbalance is still there, and heavyweights from Sprott Asset Management, CIBC World Markets (Jeffrey Rubin) and Scotiabank (Patricia Mohr) are still saying all the right things about uranium. Indeed, it is my hope that the broader market corrects even further and cools down this overheated sector as sensible buying opportunities for uranium stocks at these levels still remain far and few in-between in my opinion.

Uranium Stocks Correcting

2007-01-04T04:20:00.000-08:00

As the TSX shrank >200 points and the Venture Exchange gave away proportionally even more, uranium stocks were crushed alongside. None of the top 20 market cap uranium juniors escaped unscathed except for URANIUM PARTICIPATION CORPORATION (TSE:UPC). Some, like ALBERTA STAR (CVE:ASX), shrank by double digits. Even relative heavyweights in the uranium sector like SXR URANIUM ONE (TSE:SXR) gave back over 8%. As I alluded to yesterday, a correction looked impending, both for uranium stocks and the broader market. One of the best comments I heard yesterday was an analyst speaking on RoBTV who said that the bearish trend might continue for a little while, because you do not just drop >200 points one day and expect things to return back to normal the next. In addition, I also hinted yesterday that dips might represent buying opportunites for uranium stocks and I personally am hoping to find some bargains in the trough of the correction.

2006 Uranium Stock Picks Recap

2007-01-03T00:30:00.000-08:00

As we head into 2007 and, by all accounts, another strong year for uranium stocks, let us take a moment and reflect on the performance of my past uranium picks @ uraniumstockinvesting@blogspot.com. While the numbers might be hard to see, the trendline for each and every stock is undeniably positive, with a massive spurt at the end secondary to the Cigar Lake fiasco. Increased publicity and new investor money has added tremendous fuel to the uranium momentum and it remains to be seen whether this uptrend can perptuate itself much further before an inevitable correction hits. However, as long as the supply-demand picture is still sharply skewed, these corrections should be viewed as a further buying opportunity or entry point for those patient enough.

SXR URANIUM ONE

URASIA

UR-ENERGY

URANIUM PARTICIPATION CORPORATION

PALADIN RESOURCES

FORSYS

DENISON MINES

Jan 2: Jean-Francois Tardif, Sprott Asset Management

2007-01-02T01:03:00.000-08:00

Jean-Francois Tardif, senior portfolio manager, Sprott Asset Management

PALADIN RESOURCES (TSE:PDN): uranium producer as we speak..producing first few hundred pounds in next few weeks..mine in Namibia..they have many many projects..8 million years in five, six years..number of producers in one hand..it is not cheap but if you believe price of uranium keep on going, can own this..core holding in many uranium portfolios

CAMECO (NYSE:CCJ TSE:CCO): as a takeover potential, I doubt it..reason is there are rules in Canada..uranium is strategic resource..Cameco as my hedge against junior uranium..half a percent of my fund, small short position..

STRATHMORE MINERALS (CVE:STM): company that owns some uranium in ground, not a producer..have been an early player, grabbed assets..we are confident over time they will be able to take to production..it is true that it has not done as well..it is good holding in basket..some risk, not producer..it will take time..we feel it is reasonably cheap

PELE MOUNTAIN (CVE:GEM): we were lucky to be invested..paid 27-30 cents..uranium exploration company, goes into a basket of different uranium stocks..we own more than a dozen..maybe even twenty..some early exploration, some resources in ground..involves a lot of risk..after big run wait to buy..hard call short-term..I tend to wait for some correction before buying stocks I like

UEX CORPORATION (TSE:UEX): discovered new deposit..it is although a risky stock because they are drilling further and more, depending on news..definitely some of those holes huge grade..time before taken to production..market cap not small anymore..risky situation especially after this big run..will be news-driven

URASIA ENERGY (CVE:UUU): producer of uranium in Kazakhstan..some political risk even with deal with government, probably is fine..personally not comfortable with it..probably cheapest of producers but I prefer to invest to invest in Canada, Australia..not something we own

Jan 1: Patricia Mohr, vice president economics, Scotiabank Uranium Outlook 2007

2007-01-01T03:33:00.000-08:00

Here are some interesting excerpts from commodities heavyweight Patricia Mohr regarding her views on uranium for the upcoming year..

uranium is my top commodity pick of the 32 commodities in the index..there has been a fundamental rejuvenation..138 new reactors between now and 2020..even in the United States, 20 new reactors in the next decade..not really much progress in boosting up mine supply..this year global uranium production probably down again because of operating problems..while you getting some price response in terms of supply, a little bit of reactivation of shut-down mines, expansion of existing ones, usually long lead times between rising prices of uranium and actually getting a new mine onstream..couple of small projects but quite small relative to overall demand picture..we are expecting uranium prices currently at $72 to end next year at ~$85-90
The conscensus amongst experts seem to be that uranium will still be relatively strong in 2007 compared to other commodities and that the window for investing in uranium stocks is open for at the next 12 months.

Dec 12: Merrill Lynch Uranium Forecast, International Uranium Update

2006-12-12T20:38:00.000-08:00

Merrill Lynch Research Analyst Anita Soni increased her 2007 spot forecast for uranium 42% from $53/lb to $75/lb. Amongst modest increases in Merrill Lynch's forecast for gold and silver, this 78% upwards increase in the uranium forecast definitely stands out. Because of Cigar Lake's aftermath, Soni said that "utilities are now scrambling to cover their commitments and thus demand is expected to remain tight for some time to come."

Soni cite various factors for her drastic revision, including a lack of new mega-projects moving to development, a future decrease in Russian uranium material exports, and growth in Far East nuclear reactor development. She did remark that potential supply could come from government-owned KazAtomprom in Kazakhstan and I have detailed before Kazakhstan's very ambitious plans to be one of the leaders in uranium production.

Australia continued its march towards uranium export. Several weeks ago, the Switkowski report on the future of nuclear energy in that country came out and was decidedly positive for nuclear power, paving the way for export to China, and possibly India and Japan.

Finally, the spot price of uranium hit $65/lb this week.

Dec 11 Uranium Stocks Update: Denison Mines (TSE:DML)

2006-12-11T19:53:00.000-08:00

Ron Hochstein, now president and COO of Denison Mines (TSE:DML) after the official merger of International Uranium Corporation (IUC) and Denison was on RoBTV several days ago commenting on the company's recent attempted acquisition of Australia's OmegaCorp. (OMC.AX). The main impetus for acquiring seems to be OmegaCorp's Kariba asset in Zambia. This is what Hochstein had to say:

"we were targeting products and companies who could bring production in very near-term..2010-2011..Lundin family very comfortable with, our board very comfortable with..right now we are looking at producing 5 million pounds by 2010..this will add additional 1.5 million pounds, plus exploration potential"

On the subject of soaring uranium stock prices and uranium spot price, Hochstein had this to say:

"we are still seeing tremendous shortage..with Cigar Lake flood, accentuated industry overall..tight supply..we will need higher prices..capital costs have increased, operating costs have increased..I think uranium price will increase..many analysts coming out with $100/lb..we will definitely see continued increase..essentially, Cameco will be coming out shortly with prognosis..we are looking at anywhere from 2-5 years, more likely to be 5 years..we have seen number of utilities jumping into the market to shore up supplies..Denison Corp will be well-positioned to take advantage."

Dec 10: State of the Uranium World

2006-12-10T21:40:00.000-08:00

Firstly, a note of apology for not updating for a month. I have been busy with work (not related to investing) and must give it precedence over this uranium blog.

In the last weeks, uranium stocks have continued to climb, moving smartly along with the broader market. In fact, it seems that uranium stocks outpace the general market during bull runs and double-digit gains are the norm. Conversely, however, uranium stocks have a tendency to precipitously drop just as quickly during sell-offs in the broader market. So, in an analogous way to gold stocks having the tendency to trade more like stocks than the metal, I make myself take a look at the general trend in the broader market, as uranium stocks will be under heavy pressure if investors decide to bail out of the market highs that we have been experiencing lately.

News out from uranium bellweather Cameco Corporation (NYSE:CCJ TSE:CCO) several days ago were significant for two things:

(1) Cameco’s CEO Jerry Grandey announced that the company "may acquire smaller rivals after years of insufficient investment by the industry leaves tight supplies and high prices," with a strategy "to watch very carefully how they succeed. And at some point in time, if they need expertise or money or joint ventures or acquisitions, it would certainly be possible."

(2) Cameco is expecting to drill about 20 holes and plug the Cigar Lake mine leak with cement. Previously it had announced that revised cost estimates and timelines for Cigar Lake would be available in February. Cigar Lake is 50 percent owned by Cameco, with the remainder held by AREVA Resources Canada Inc., Idemitsu Uranium Exploration Canada Ltd. and TEPCO Resources Inc.

With Cigar Lake flooded, Cameco seems to be more willing to go into acquisition mode to compensate for the delay. While the company is already involved in numerous joint ventures, it has not really made a big splash in the acquisition of other larger uranium companies to date. One might presume that the answer seemingly lies in how long it would take Cameco to de-flood Cigar Lake; the longer it takes, the more interested Cameco naturally becomes to acquiring a fairly advanced-stage uranium junior.

Nov 12 Uranium Stocks Update: Urasia Energy (CVE:UUU )

2006-11-12T14:50:00.000-08:00

Urasia signed five new contracts to sell its uranium to North American utilities that totals 5.75 million lbs over a span of nine years all the way to 2016. As expected, these contracts are subject to changes in uranium price, as uranium producers like Urasia and Paladin pride themselves on being unhedged. Urasia CEO Phillip Shirvington attributes these five new contracts in part to the Cameco Cigar Lake disaster, which has obviously scared those who rely on the use of physical uranium to sign these long-term contracts.

As you can see from the stock chart, Urasia has appreciated along with all other uranium stocks not named Cameco in the last two weeks or so, rising to $3.25 from a trough of $2.40. MACD and RSI remain positive, although it remains to be seen whether or not there will be a golden cross, as the 50DMA seems to have trouble breaking above the 200DMA. While this announcement of new contracts is positive, I remain concerned about Urasia's foreign exchange losses, and nothing in the last few months has convinced me otherwise. To an extent, the lack of transparency of Urasia as compared to Paladin (TSE:PDN) for example, has led many institutional investors to opt for Paladin as a first alternative to Cameco (that and Uranium Participation Corporation). I would hope that Urasia will be more forthcoming and directive in their communications to existing and potential investors.

Cameco's Disaster Fuels Uranium Boom (Part 4)

2006-11-05T16:55:00.000-08:00

Several days ago Cameco came out with their Q3 numbers. This is what they have to say about Cigar Lake:

We anticipate that a phased plan will be in place within three months outlining a preferred option and several alternatives. Most of the alternatives under consideration involve drilling from the surface and isolating the source of the inflow from the underground workings by using grouting or freezing techniques and then pumping the water out of the mine. Discussions are under way with relevant authorities to review the incident and chart a regulatory path to ensure timely review of remediation plans. The existing environmental assessment of the Cigar Lake project allows for mine remediation from the surface in case of flooding.

Now, some analysts have speculated that the Cigar Lake project has been delayed for at least two years and possibly longer. I am certainly not an engineer, but to need a few months just to devise a plan is an indication for me that two years might be a fair estimation.

The short-term implications have already reverberated in resounding ways. Uranium stocks of every ilk have profited enormously, be it microcaps or billion-dollar uranium juniors. As long as the general market does not trend downward, uranium stocks seemingly have a limitless cap on potential for gain.

However, if one were to ask if this is the right time to buy, the answer is much hazier. Yes, there has been a fundamental change in each and every uranium stock because they more or less have a premium based on the uranium price and with the supply-demand fundamentals being skewed by a potential two year delay in a 17 million lb/yr project, I have no doubts that some of the appreciation in the last week is here to stay.

Still, I see a whole new wave of speculators coming into the uranium stock game now, who by virtue of Cameco’s bombshell has suddenly woken up to uranium investing and are throwing money into uranium stocks fairly indiscriminately. I see the signs of speculation around me: the sudden spike in my blog subscribers, upswing in various uranium stock bulletin boards, an uptick in search engine-directed activity into this website. And of course, these small uranium stocks themselves who are suddenly jumping 50, 100% in value over the course of a single week.

Now, the question becomes, when does this multi-digit gain stop? And when is the crash going to happen? Because, in my opinion, there will be a fall at some point. Take a look at what happened in April-May of this year. Yes, there has been a fundamental change, but no, that should not be applicable for every uranium stock out there. Simply put, I do not think that there will be two to three hundred uranium producers out there. Yes, many of them might be taken over, but one might not want to play such a risky game..

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Cameco's Disaster Fuels Uranium Boom (Part 3)

2006-10-26T20:38:00.000-07:00

Yesterday, Neal Froneman, president and CEO, sxr Uranium One was on RoBTV educating the general masses about the impact of Cameco's Cigar Lake disaster. Let’s first take a look at what he says..

(Uranium) price rise driven by constraints of supply. One of the best miners have very significant problems. Lots of new producers with very aggressive targets. We're very much on track, probably a quarter ahead in terms of commissioning. We have held off entering into any forms of sales contract. Clearly as demand as robust as it is and the disruption at Cigar Lake, nice time to negotiate. In 6-18 months we expect to exit out of gold vehicle to become focused uranium company. Before incident at Cigar Lake, I said we would say before the end of the year $60 and $70 by the end of next year. I daresay now $65 by the end of the year, long-term require at least $55-60 for industry to come into supply-demand balance..I think there's a window of opportunity for new producers like ourselves where supply-demand not in balance..that window probably 5-10 years..if you’re a new uranium company, need to establish in that time frame.

Personally I agree with what Mr. Froneman is saying. The long-term uranium stocks worth holding on to are the ones who have feasible assets that can be produced within 5-10 years, preferably closer to 5. Because, who here really can predict beyond these five years anyway? There are too many variables here at play and I'm much more comfortable investing for the here and now, with an eye on the next few years to come.

Others, of course, like to make money in the absolute here and now. Certainly, every uranium stock has received a bounce as we enter day 3 post-Cameco meltdown. Major mid-tiers reversed course today in trading as profits were taken. Some of the smaller uranium microcaps, meanwhile, ascended double-digits; many of these small exploration plays have been languishing for months in their 52-week lows. Fast money can definitely be made, but only if you are willing to take on substantial risk as double digits in the opposite direction can happen just as quickly.

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Cameco's Disaster Fuels Uranium Boom (Part 2)

2006-10-25T00:11:00.000-07:00

Yesterday's gains by uranium juniors not named Cameco continued today as all but two of the twenty uranium companies posted green figures. SXR and Ur-Energy continued their double-digit ascent while Paladin traded a staggering 30 million shares.

These are all good and well, but since I touched on the same thread yesterday, I will attempt to place my observations in another context.

Word amongst uranium investors first circulated several days ago about a uranium story that broke on Marketwatch. Myra Saefong wrote what basically amounts to a uranium primer, mainly for those investors curious, but with little or no prior knowledge of the sector. The only companies mentioned were, of course, Cameco, and Uranium Participation Corporation.

Similarly, on RoBTV today, Cameco's water problems put the immediate spotlight on uranium. Lunch Money did a brief segment detailing Paladin as a more speculative, but possible alternative to Cameco. A chart of five uranium stocks was shown, comprising of UEX, Paladin, Denison, IUC, and SXR Uranium One.

Finally, the Canadian Press released an article entitled 'Uranium Stocks Surge' and detailed the rise of Paladin, SXR Uranium One, Forsys, Urasia, Denison and IUC.

The point that I'm trying to get at is this: money is pouring into uranium, but disproportionately so towards the "large caps" of uranium, the mid-tier junior producers/near-producers. Whether it is from institutional investors bailing out of Cameco or Norther American investors who have just started to notice uranium, the publicity and the attention are on a select group of stocks, the ones that I have observed being spewed over and over again.

And when one thinks about it, why not? Seriously, what are the alternatives to Cameco? If you wanted to invest in uranium, but wanted a stock at least, if not roughly equal in market cap (nobody is remotely close), or even just a TSX-listed stock, the choices are few and far between. One of my picks Forsys Minerals was mentioned in the same breath as Paladin and SXR. Why? Well, how many other uranium companies are TSX-listed?

I will not talk about uranium price forecasts at this point, but from what I'm observing, uranium investing education is still only in its infancy and savvy investors will do well to keep this consideration in mind.

Cameco's Disaster Fuels Uranium Boom (Part 1)

2006-10-23T22:44:00.000-07:00

Cameco (NYSE:CCJ TSE:CCO) today shocked the uranium world with news that its massive Cigar Lake would be delayed at least a year because of uncontrollable flooding. This was the second such delay and markets were swift to punish the company, sending it down almost 10%. Conversely, stocks of ALL other uranium mid-tier juniors shot up in reaction. Case in point, take a look at these companies (in descending order of market capitalization):

Paladin Resources (TSE:PDN) up 14.8%
Urasia Energy up (CVE:UUU) up 14.5%
sxr Uranium One (TSE:SXR) up 16.1%
UEX Corp (TSE:UEX) up 9.61%
Aurora Energy (TSE: AXU) up 13.7%
International Uranium Corporation (TSE:IUC) up 5.36%
Uranium Participation Corporation (TSE:U) up 12.8%
Mega Uranium (TSE:MGA) up 8.2%
Fronteer Develoment Group (TSE:FRG AMEX:FRG) up 9.9%
Energy Metals Corp (TSE:EMC) up 23.5%
Laramide Resources (TSE:LAM) up 4.7%
Tournigan Gold (CVE:TVC) up 7.7%
Ur-Energy (TSE:URE) up 14.0%
Altius Minerals (CVE:ALS): up 5.1%
Alberta Star (CVE:ASX) up 3.55%
Western Prospector Group (CVE:WNP) up 7.7%
Strathmore Minerals (CVE:STM) up 2.1%

Now, if an existing uranium investor who had listened to certain analysts in Canada and the United States (Jim Cramer anyone?) say that Cameco is the ONLY uranium stock to buy, I imagine you might be feeling slightly queasy right about now. Yes, Cameco is the uranium giant, but no, it is not the best uranium stock to own at the moment, even without this major announcement today.

As I have stressed in the past, due diligence is an absolute must in the uranium stock field, because there are just so many companies to choose from. As it is foolhardy in my opinion to ignore solid promising mid-tier juniors, it is also foolhardy to lay all your money down in extremely risky, speculative uranium microcaps. I challenge all my readers to do their own due diligence. Avoid the easy play and lay money on a uranium stock just because a bunch of analysts said so. People who did essentially shot themselves in the foot twice, by buying one, and not buying any others..

Doug Casey on RoBTV Oct18

2006-10-18T23:38:00.000-07:00

Mr. Casey was on Market Call with Jim O'Connell for a full hour today talking about energy, metals, and resources. Let's see what he had to say about our little world of uranium.

ON URANIUM:

still lots of misconception..nuclear power is way to fly for mass energy generation..by far the safest, by far the cheapest..440 active nuclear plants..Chinese putting up 2 plants/year..India, rest of the world..tremendous deficit of uranium..since it takes about 10 years from time to discover economically uranium deposit to time to production, permitting being as onerous as it is..there will be a uranium deficit for some time..not surprised to see uranium $100-150/lb..several years ago only 4-5 uranium companies..now more than 200..grown like poison mushrooms after rainstorm..how many competent uranium teams are there? not a lot of expertise for mining in general, uranium in particular..out of those 200 or so companies, how many have competent teams? half a dozen? a dozen? odds not good..having said that, there will be a uranium boom..

Analysis:

This is one of the reasons why I chose to be an affiliate of Casey Research (as evidenced by the promotional banner on the right sidebar). Doug is amongst the biggest uranium bulls out there, but he will not unabashedly prop up any and every single uranium stock. He, like I, preaches caution and the need to find good quality companies with feasible assets and strong management. Although he might have not been the most traditional guest on RoBTV (literally refusing to talk about individual stocks and mixing in history and philosophy into his points), Doug really knows his stuff.

Ux Price Ready to Vault in 2007

2006-10-18T11:41:00.000-07:00

by Garth Theunissen

The uranium price has been tipped to average $53/lb in 2007, representing a 14.5% year-on-year increase, said the Australian Bureau of Agriculture and Resource Economics (ABARE). It forecasts price strength for uranium for at least two more years.

Analysis: 2 years is a good conservative number. I would be hesitant to believe ABARE if they had the ability to forecast beyond 2 years.

An expected decline in secondary uranium supplies is one the factors behind good prices, particularly from the Russian Federation, Abare said.

Secondary supplies have predominantly been sourced from the conversion of highly enriched uranium from disarmed nuclear weapons, government inventories and reprocessing. ABARE expects the supply from secondary sources to decline only marginally in 2006 and 2007. It foresees "substantial reductions" beyond 2013.

Analysis: beyond 2013 is when the HEU agreement runs out to melt Russian warheads into uranium.

A further supply constraint is that world uranium consumption currently outstrips supply by more than 28,000 tons/year.

With the growing acceptance of nuclear power generation as an energy source - the only significant commercial use for uranium - ABARE predicts plenty of demand-side support for uranium in the near to mid-term future.

For 2007, ABARE sees a minimum 4% increase in consumption to 80,500 tons as a number of new nuclear reactors start production in India, China and Romania.

Analysis: see my latest sxr Uranium One (TSE:SXR) update for more validation of this fact

However ABARE's average spot price forecast of $53/lb for 2007 seems conservative.

Gary Stoker, marketing manager at Nufcor International, is far more bullish and reckons the average uranium price will be even higher given. At $55.75/lb, the current spot price it is already higher than the ABARE prediction.

We are optimistic that the uranium price will continue to increase over the medium term, and anticipate an average price in 2007 of well over $60/lb, says Stoker.

Fundamentals are driving uranium prices rather than investor speculation, he says. Although there has been a lot of talk of speculators driving up the price, if you look at the volumes they take up in the market it is very small, he says.

Although there are a lot of initiatives around the world to increase production, we're of the view that not a great deal can be achieved to boost supply in the short term. As such we see continued upside support for the uranium price at least in the short to medium term.

Says Neal Froneman, CEO of sxr Uranium One: I believe that the constraints on the supply side are grossly underestimated. I also think Gary is one-hundred percent correct in that a lot of the predicted new supply will not come on as forecast. My estimate will be that we will see $60/lb by the end of this year and that by the end of next year we will see at least $75/lb. This will put the average at about $68/lb. These estimates I believe are conservative.

Incidentally, according to the website UXC, investors and hedge funds accounted for just over 24% of the total spot trading volumes in the uranium market for 2005. In the year to date, UXC says around 34% of overall uranium trading volumes have been purchased by the investment community, which suggests that speculators are exerting some degree of upward pressure on prices.

Analysis: good writing..instead of regurgitating calming sentiments about this increasing secondary/investment uranium demand, the author has actually done a little research. In my opinion, not only is the absolute number 34% somewhat alarming but the rise from 24% to 35% in a year, coupled with my coverage of new hedge funds coming into the uranium sector makes me wary. As a uranium investor, I want to monitor these numbers very closely, however unpopular the notion that uranium prices are to an extent being artificially inflated.

Not to toot my own horn, but check back to what I wrote over half a year ago in mid to end-March:

http://uraniumstockinvesting.blogspot.com/2006/03/mar-23-uranium-stocks-update-paladin.html

http://uraniumstockinvesting.blogspot.com/2006/03/mar-29-uranium-stocks-update-sxr.html

I was wary of speculators back then, and I'm wary of speculators now. Don't get me wrong, I love uranium (why else would I write a uranium blog), but it never hurts to be cognizant of where you're putting your money into..

Oct 17 Uranium Stocks Update: sxr Uranium One (TSE:SXR)

2006-10-18T00:03:00.000-07:00

sxr Uranium One is considering discussing the sale of future uranium production to China. Their imminent production from the Dominion project that ramps up to 4 million pounds of uranium oxide a year by 2010 would be tempting for China, which needs to add two reactors a year to meet the target of generating 4 percent of its power from nuclear plants by 2020. China has already stated that it was seeking out uranium supply from multiple sources to diminish risk: it lists Canada, South Africa, Namibia and Kazakhstan as potential sources and is in known discussions with BHP Billiton (NYSE:BHP) and Rio Tinto Group (NYSE:RTP) to import uranium.

In addition, sxr announced a few days ago that they were going to issue 18,100,000 Common Shares to sell to the public at a price of C$8.30/Common Share, representing an aggregate amount of C$150,230,000 with closing is expected on or about October 31, 2006. As of today, sxr closed at $8.88.

Oct 16 Uranium Stocks Update: Uranium Participation Corporation (TSE:U)

2006-10-16T22:16:00.000-07:00

Add John Zechner, chairman, J. Zechner Associates and Peter Brieger, chairman and chief investment officer, GlobeInvest Capital Management to the list of uranium bulls. Both were on hour-long RoBTV segments today and both gave a positive outlook on uranium.

Zechner stated: uranium's got its own story..clearly supply tightness there..buyers much less sensitive to price (versus oil)..in uranium there's not much else you can get running a nuclear reactor right now..as long as these things are growing and demand is there..plus not the biggest cost input in running a reactor..can see uranium @ $80-100

Analysis: Uranium Participation Corporation was one of Zechner's top picks today and, as such, predicates his bullish views on the spot price of uranium oxide has UPC is really the ETF or proxy of U3O8, although its stock chart is nowhere as pristine as yellowcake prices have been in its upward ascent.

Brieger followed with: we've owned UPC since the initial issue..between now until May we will exercise warrants..like long-term outlook for uranium..one of the great solutions to American energy crisis..have to take 3-5 year view..in order of priority..a) continue to hold UPC..b) exercise warrants if you can take 3-5 year view..there are a ton of people exploring for uranium..and at some point if some of the explorations prove successful, you can have an excess of supply..make take is if you take on all the proposed construction of nuclear facilities..there is a genuine shortfall..I don't know where supply is coming from

Analysis: Brieger's latter comments were in response to host Michael Hainsworth's probing as to why Paul van Eeden had such bearish sentiments against uranium investing. Brieger and Zechner do not immediately make me think uranium, not nearly as much as people like Dines and Taylor for example. To me they are part of the uranium bandwagon, believing in the supply and demand fundamentals of uranium without wanting to delve too deeply into analyzing and parsing through hundreds of uranium juniors. Nevertheless, this represents another victory for uranium supporters in the battle to draw investors into the uranium field and furthering uranium away from the likes of base metals.

The Case AGAINST Uranium?

2006-10-15T09:09:00.000-07:00

I've heard few analysts in recent days who, upon talking about uranium, are nothing but bullish. Jim Dines, Doug Casey, Jeff Rubin, anybody from Sprott Asset Management, all look favorably upon yellowcake. However, there is one notable dissenter: Paul van Eeden. As bullish as he is on gold, van Eeden is staying away from investing in uranium stocks.

His reasons are as follows:

(1) based on available data, uranium supply will match or even exceed demand until ~2012
(2) as uranium prices soar, you can get more uranium just by enriching it longer
(3) this enrichment process skews the fundamental supply crunch that uranium bulls rely on as the keystone for their favorable uranium sentiments
(4) furthermore, the price escalation of uranium is largely the fault of speculators entering the market: for example, Uranium Participation Corporation (TSE:U), Nuclor, and numerous small hedge funds who buy and hold physical uranium, thus taking it out of the market and squeezing supply
(5) however, at some point, since they can't use the uranium, they must sell to make a profit..then, the excess supply will drive uranium prices down
(6) since van Eeden cannot see how uranium prices will react, he stays away from uranium investing: the only stock he owns with uranium exposure is Strateco (TSE:RSC)

My own view on uranium lies somewhere in-between van Eeden and the uranium bulls. As I have made clear on this blog in the past, I do favor uranium because of its importance to the nuclear renaissance. Countries like China are scrambling to secure future uranium supplies. Why else would they sign that agreement with Australia in full knowledge that Australia has some of the tightest regulations on uranium mining? Why would Chinese companies JV in Canada (see CanAlaska Ventures CVE:CVV) and in other places around the world with small uranium juniors? Why is Russia not going to renew the HEU agreement to melt down more nuclear weapons into uranium after the current one expires? Why is Kazakhstan so eager to exponentially increase their uranium production? Why is BHP Billiton (NYSE:BHP) spending billions on Olympic Dam to increase uranium production? See Cameco's (NYSE:CCJ TSE:CCO) Cigar Lake project for another example. Japanese companies have a part in Cigar Lake, as well as signing agreements with Kazakhstan's Kazatomprom.

I'm being rhetorical, but you get the point..there is a very real demand for physical uranium, and it stems from all the nuclear power plants that will be built in the next two decades or so. The question is: will we overcompensate a few years down the line when uranium production finally kicks in? Remember, uranium itself is hardly a rare metal; it is quite abundant. Problem is to mine it out of the ground in a timely fashion. That's why there are so many uranium EXPLORERS but so few uranium PRODUCERS currently. This scenario might, however, not be the same in several years.

The other question is: how much is this secondary/artificial demand for physical uranium from UPC, Nuclor, and other hedge funds masking the real supply-demand fundamentals? I agree with van Eeden that speculators, indeed, have entered the uranium market, thus adding a level of inherent volatility.

Personally, I like to invest in high-quality uranium stocks and my recommendations have reflected such. In general, however, I would simultaneously encourage new investors to give a hard look at uranium stock investing while urging necessary due diligence and employing diversification strategies to minimize volatility risk.

RoBTV Commodities Report on Uranium

2006-10-11T17:38:00.000-07:00

RoBTV Commodities Report on Uranium

Jean-Francois Tardif, portfolio manager, Sprott Asset Management was on RoBTV last Thursday giving an introduction to uranium fundamentals and tips on investing in uranium stocks

On Uranium
-supply-demand imbalance
-price of uranium has not gone down 1 month in 3 years
-energy consumption growing, push for nuclear power in China and India
-French company AREVA (85% government owned) need uranium to sell reactors

On Investing in Uranium Stocks
it's very hard for small investor..look for established reserves..if you want to take more risk, look at companies with resources..depends on grade, how deep it is, which country it's in, management..you need to do a lot of research..find out what experts are saying..look at grade and say..how much is it worth per ton?

On Specific Uranium Stocks

you can buy URANIUM PARTICIPATION CORP. (TSE:U) which owns raw uranium

PALADIN RESOURCES (TSE:PDN): Paladin is next company that will produce uranium..decided to build mine..will produce ~11 million lbs in 5-6 years..not cheap but after CAMECO (NYSE:CCJ TSE:CCO), next one on the list to build high quality uranium stock portfolio

SXR URANIUM ONE (TSE:SXR): very aggressive company, bought two mills in US..I think they will continue to buy uranium assets and become a large company..assets in South Africa to take to production, produce ~4 million lbs..

DENISON MINES (TSE:DEN): just merged with TSE:IUC..must look at combined entity..both will be producing uranium..expectation 4-5 million lbs/year starting 2010..has definite upside

TOP PICK WESTERN PROSPECTOR (CVE:WNP): high risk in Mongolia..tax situation hopefully will be rectified..intrinsic value north of $10, lots of risk..do have assets..government asked for too much..think they will do the right thing down the road

URASIA ENERGY (CVE:UUU): exposure to Kazakhstan..lack of news and understanding make people worried..easier to buy other companies that people understand better

TOP PICK TOURNIGAN GOLD (CVE:TVC): have gold assets, Slovakia, hopefully spin out next year..John Embry of Sprott loves it..uranium asset 40 million lbs..doing pre-feasibility study..as a firm we like that company very much

ENERGY METALS CORPORATION (TSE:EMC): very smart management..got database and figured out where uranium was in US..ownership in lots of resources..not proven but potentially 200 million lbs uranium..now starting to work on 3 properties..will take a long time but this company down the road will produce uranium

TOP PICK UR-ENERGY (TSE:URE): will produce uranium expectation between 2008-2009..have 20 million proven lbs with 43-101..some people speculate that they could be bought out..SXR, Paladin, EMC maybe..

Sep 28 Uranium Stocks Update: Forsys Metals (CVE:FSY )

2006-09-28T00:18:00.000-07:00

Since my last update on Forsys almost two weeks ago, the company announced that it has received the conditional approval of the Toronto Stock Exchange (TSX) to list the common shares of Forsys on the TSX.

I continue to think highly of this company and, with a TSX listing, institutional investors might start piling in too. As you all know, major financial institutions like RBC, CIBC, Scotia and Deutsche in the last few weeks have all had to revise and raise upward their forecasts for the uranium oxide price. Multiple analysts have remarked that uranium and gold seem to be the safest of resources to invest in because of their uniqueness: uranium has a supply-demand imbalance even worse than zinc and gold trades as money.

Now as I see it, of the several hundred uranium companies listed in Canada, only a fraction are on the TSX while the bulk of them, including Forsys, currently reside in the Venture Exchange. If you screen out those companies that do not have uranium as their primary asset (eg Globex Minerals, a company dealing with gold, copper, zinc, silver, platinum, palladium, magnesium and talc as well as uranium), I can only find a handful of pure uranium plays out there.

The companies that are both largely pure-play uranium and listed in the TSX are the comparative goliaths of the uranium industry; recognizable names like Cameco (TSE:CCO), Paladin (TSE:PDN), SXR Uranium One (SXR.TO), UEX Corp. (UEX.TO), Aurora Energy (TSE:CCO), International Uranium Corp (IUC.TO), Denison Mines (DEN.TO), Uranium Participation (U.TO), Mega Uranium (MGA.TO), Energy Metals Corporation (EMC.TO), and Ur-Energy (URE.TO). I list them in descending order of market cap, with Ur-Energy being the smallest at roughly $196 million.

As far as I can tell, there is only one other uranium pure-play (could be several more, but you get my point) with a lower market capitalization than Forsys ($101.7 million); that would be High Plains Uranium (HPU.TO), a $48.7 million company that is about to be taken over by EMC.

The corollary to this observation is that the all of these companies are either producers of uranium (Cameco, Paladin, IUC, Denison), near-producers of uranium (SXR), or have advanced-stage projects complete with feasibility studies that should let them produce uranium within two to three years (UEX, Mega, Ur-Energy).

So what does this mean for Forsys? Well, if institutional investors start making good on their word about being bullish on uranium, money will be piling into uranium stocks (so far, it's somewhat puzzling why stocks have not nearly appreciated as much as the uranium spot price itself). However, Venture Exchange uranium stocks are a dime-a-dozen. The ones that trade on the TSX generally will receive more attention and investor backing, simple as that.

David Miller on RoBTV

2006-09-25T14:31:00.000-07:00

David Miller, President of Strathmore Minerals (STM.V) and contributing editor of the newly-released book "Investing in the Great Uranium Bull Market", was on RoBTV's Market Morning today.

Miller's first prefaced his key observations of the uranium sector by establishing some credibility:

"I started my career in uranium in 1976 in the previous boom"
"I think it's (uranium boom) stronger than in the 1970's"

Key Points

(1) right now, uranium is finally entering the market as a commodity
(2) we've consumed all the excess uranium available
(3) in 1985, consumption started > production
(4) since 1985, consumption steadily increased
(5) half the power generated by nuclear in the US comes from Soviet weapons
(6) demand for uranium comes from ~440 nuclear plants
(7) current production 105 million lbs
(8) current demand 180 million lbs
(9) China, India, Russia main drivers for new nuclear plants
(10) needs to become acceptable around the world
(11) clean, plentiful, no carbon dioxide
(12) spent fuel rods needs reprocessing
(13) need regulation
(14) don't rely on anyone, do your own due diligence
(15) uranium needs organization to be traded as a commodity (futures)
(16) nuclear utilities worried about security of supply, signing long-term contracts
(17) current long-term price $51, spot price $53.5 U3O8
(18) only 4-5 dozen players setting uranium oxide price, small market
(19) cost of uranium fuel very tiny fraction to cost of running nuclear power plants, uranium oxide price can double with minimal impact
(20) uranium not really tied to other energies (coal, oil, natural gas)

Analysis

Yes, Mr. Miller has been in the uranium business for decades now, and brings along a wealth of experience and insight. The book is probably a good read for newer uranium investors.

However, I'm more curious as to Mr. Miller's company, Strathmore Minerals (STM.V). The company promotes itself as having one of the largest exploration land packages in the prolific Athabasca Basin along with additional holdings in the United States, Canada and Peru. Historical estimates of reserves (some are not NI 43-101 compliant) on several of their properties are impressive but the stock price has staggered along for some months now, even with the publicized backing of Mr. Miller, Sprott (Kevin Bambrough) and Halcorp Capital (Mike Halvorson).

Some months ago, Strathmore and Ur-Energy (URE.TO) had roughly the same market capitalization; currently, Ur-Energy is more or less valued at $50 million more. The difference, in my opinion, lies in the perception that Ur-Energy will be a uranium producer in Wyoming faster than Strathmore will be in New Mexico with its Church Rock Project. Whereas Ur-Energy has set some very definite goals for its Lost Soldier and Lost Creek project, Strathmore seems to be comparatively late in joining the mid-tier uranium junior-to-uranium producer progression that accompanies with it a substantial revaluation in market capitalization.

This is not to say that Strathmore is a bad company. If permitting goes smoothly at Church Rock, the company stands to gain back some ground. Meanwhile, a little publicity for Strathmore and the whole Canadian uranium industry courtesy of Mr. Miller obliges this uranium blogger to thank him.

Sep 24 Uranium Stocks Update: sxr Uranium One (TSE:SXR)

2006-09-24T22:30:00.000-07:00

Several weeks ago, SXR.TO was raised to "speculative buy" from "hold" by Graeme Currie at Canaccord Adams in Vancouver. The analyst cited strength in the uranium market, his firm's bullish outlook for uranium demand and the limited number of companies expected to commercially produce uranium in the next three years.

In addition, five days ago, plant commissioning commenced at the Dominion Uranium Project, one quarter ahead of the Corporation"s previously anticipated schedule.

Neal Froneman, CEO of SXR Uranium One, commented: "Dominion is moving smoothly towards start-up of production. The commencement of plant commissioning is a significant milestone and I am pleased to see that the team has been able to meet this milestone one quarter ahead of schedule. We remain confident that we are well on track to achieve our objective of hot commissioning in the first quarter of 2007."

Impressive. SXR's three months ahead of schedule, even better than Paladin's one month ahead on Langer Heinrich. Watch out for SXR as it seems hellbent on acquiring another North American uranium junior this year.

Dominion

SXR Uranium One's flagship project in South Africa, with project payback expected to be five years from the start of construction. In addition, Dominion is now proven to have at least 31-million pounds of uranium oxide (U3O8) after the completion of the first-phase feasibility study, and work is now underway to prove more of the estimated 300 million lbs of uranium oxide in Dominion. The average operating cost for the first phase is expected to be $14.50/lb of U3O8, net of gold by-product credits; originally the cost was supposed to be higher but due to the high uranium oxide price, SXR Uranium One plans to mine lower-grade ore as well.

You Know Uranium Is Hot When..

2006-09-23T11:09:00.000-07:00

RobTV has had guests talk about uranium every day of the week for the past week. Just a week-and-a-half ago, I had this to say about the future of uranium stock investing:

"As most uranium investors know, it has been most profitable in the last two years or so to put money into uranim stocks. However, uranium has not been talked about too much outside of a very small circle. It has been only in the last few months that I've seen more and more coverage initiated by such popularity indicators as Report on Business TV (RoBTV). Sprott has been heavily invested in uranium but the company cannot be considered a giant in the financial world. With Deustche Bank and CIBC World Markets now weighing in on the bullish side of uranium, you can bet that your ordinary Joe and Jane will eventually get to know uranium oxide and the benefits of investing in U3O8 stocks."

Now yesterday, listening to RoBTV's host preface Peter Grandich's view on uranium by stating
"uranium as you mention, it's a no-brainer, boy there's no slowing uranium at all, is there?"
Peter Grandich remained extremely bullish about uranium, citing that the price would go up because:

(1) there is no substitute for uranium
(2) uranium prices could double and not really adversely affect the cost of running a nuclear power plant
(3) US Energy Department would like to build 30 new nuclear plants in the United States

Grandich's top pick was Crosshair Exploration (CXX.V) in Central Labrador, citing its proximity to Aurora (AXU.V) and impressive land package.

HOWEVER

Keep in mind that CXX, by Grandich's own admission, is his largest personal holding. Furthermore, here's what I pulled out of a Google search:

Crosshair Explorations pays Grandich Publications $1,000 a month U.S., and has issued 200,000 stock options @ $.25; 100,000 options @$.45; and 100,000 @ $1.31 100,000 @ $.25 have been exercised and sold.

The point is, always try to know why an analyst says what he says and exactly at what angle he is trying to play at..

Finally, as if the ordinary Jane and Joe can somehow miss hearing about uranium, David Miller, President of Strathmore Minerals (STM.V), will be on Monday.

Sep 20 Uranium Stocks Update: International Uranium Corporation (TSE:IUC)

2006-09-20T01:06:00.000-07:00

A conference call was held today by Denison Mines (DEN.TO) + IUC, as well as appearances by both Denison CEO Peter Farmer and IUC CEO Ron Hochstein on RoBTV's Squeeze Play segment. Highlights are summarized for your convenience.

(1) commanding North American milling capacity

(2) stronger equity currency for strategic acquisitions

(3) asset base includes:
(a) McLean Lake Mine and Mill
(b) Midwest Mine,
(c) White Mesa Mill
(d) Colorado Plateau Mines
(e) Henry Mountain Mines
(f) Arizona Strip Mines
(g) Mae Exploration Project (Mae Zone + Wheeler River)
(h) Moore Lake Exploration Project

(4) multiple mines decrease operational risk

(5) JVs with Mongolian government + AREVA on various projects

(6) Equity investments totalling ~$35 million in Fortress Minerals (FST.V), Energy Metals Corp (EMC.TO), Energy Metals Ltd of Australia, JNR Resources (JNN.V, $5.6 million), Santoy Resources (SAN.V, $2.8 million), Erdene Gold (ERD.TO)

(7) Will continue to run Uranium Participation Corporation (U.TO)

(8) 174 million shares outstanding, repriced warrants will be all Denison warrants, 1/3 of which strike price $5.20 expiring Nov, 2009 , other 2/3 expiry 2011 @ $10.40

(9) Working capital $140 million, no debt

(10) 66.7% approval Denison shareholders, 50.1% approval IUC shareholders, lock-up agreement signed by board and management already

(11) 0.5-1.0% ownership by management NOT including the Lundins

(12) $30 million CapEx for McLean Lake expansion

(13) mined U3O8 will come out of White Mesa mill in 2007

(14) Lundins currently own ~20% of IUC, will want to own ~15-20% of combined Denison Mines Ltd.

(15) Topaz Mountain ore will be shipped to White Mesa mill sometime in November. Henry Mountain permitting expected to go through on schedule.

(16) reevaluating Mongolian property to see if they can covert from ISL to open-pit mining, potentially increasing uranium assets by 30 million lbs

(17) AREVA open to Denison-IUC merger, not threatened

(18) Exploration budget in Athabasca Basin for combined company will be around $20 million

(19) Colorado Plateau (Topaz) ~$2.5 million CapEx, small because of existing structures

(20) Tony M Mine + Bullfrog CapEx $35 million, Tony M about 110 miles away from White Mesa mill, not too much of concern

(21) synergy between Denison + IUC in Mongolian projects + Athabasca Basin, higher production IUC @ lower grades, lower production @ higher grades Denison

(22) uranium company stocks have corrected while uranium spot price continually increased partly attributed to technical difficulties bringing production on-line

Sep 18 Uranium Stocks Update: International Uranium Corporation (TSE:IUC)

2006-09-18T17:18:00.000-07:00

With today's merger announcement between IUC and Denison Mines (TSE:DEN), a new $1 billion market cap uranium mid-tier powerhouse emerges with the ability to produce 5.5 million lbs of uranium by 2010. Let's take a look at the details taken from various news sources, along with some of my thoughts.

The deal values Denison at about $518 million and its shares at $17.02 based on share prices Monday. IUC has a market capitalization of about $523 million.

The combined company, named Denison Mines Ltd., will have cash and short-term investments of $127 million and no long-term debt. Existing IUC and Denison shareholders will each own approximately 50 per cent of the new company, which will have about 176 million common shares outstanding after the merger.

The CEO of Denison, Peter Farmer, with be the CEO of the combined company while the CEO of IUC Ron Hochstein will be President and COO. The Infamous IUC Lukas Lundin will be chairman of the combined company.

Each company is expected hold a special shareholder meeting in November to vote on the transaction. The deal is expected to close by the middle of December.

Analysis

While I was slightly disappointed that there was very little premium on IUC, I am at the same time hopeful for the future of this compnay. Denison and IUC made much more sense than a merger between Denison and SXR, for example, partially because of SXR's potential financial constraints secondary to their recent purchases in the past few months.

The Denison-IUC merger allows the Canadian uranium assets of Denison to be melded with the American assets of IUC. The McLean Lake mill, of which Denison owns a stake in, combined with the White Mesa mill of IUC, affords the combined company plenty of milling capacity for their U3O8 production.

Management is also strengthened by the merger, with even more experience and influence concentrated together. Many companies would kill to have the management qualifications of either company, let alone in one. And as always, it's nice to have a Lundin getting your back..

Combined together, Denison-IUC slots nicely in front of SXR and just behind Urasia Energy (UUU.V) in terms of market capitalization, making it the the fourth biggest uranium company listed in Canada, lagging only behemoth Cameco (CCO.TO), Paladin (PDN.TO), and Urasia.

I'm looking for continued M&A activity in the uranium sector, and several uranium juniors including one of my recommendations, Ur-Energy (URE.TO), seem to be prime candidates for a takeover

Sep 17 Uranium Stocks Update: Uranium Participation Corporation (TSE:U)

2006-09-17T18:27:00.000-07:00

Originally recommended in early-March, Uranium Participation Corporation (U.TO) has since climbed from $7.30 to $8.80Cdn on the strength of the ever-increasing uranium spot price. The company, if you remember, basically buys up uranium oxide and holds it in hopes that the price of U3O8 will appreciate. So far it's been a very successful strategy: it's NAV has increased steadily and investors are paying a premium to invest in the company.

In the last few months, others have crowded into buying physical uranium for investment gain, including Nufcor International, a joint-venture between AngloGold Ashanti Limited and FirstRand Limited, which holds over 1,000 tonnes of uranium and trades at around 30 percent above its NAV. Nufcor recently announced it planned to raise another $50-million or so in the next several months to buy more uranium oxide.

This is in addition to around half a dozen hedge funds who own physical uranium as well, including the newly brandished Solios Uranium Fund, consisting of 75% physical uranium and 25% uranium equities, with the equities being used to hedge or enhance returns.

All in all, this secondary uranium demand IS undeniably having an impact on the overall uranium landscape. Of the spot market volume for uranium this year, only about 1/5th of the uranium oxide is being bought out by utilities. You can guess where the other 80% is going.

As uranium production from the ground is still expected to lag behind demand, I predict that the secondary uranium demand created by these funds will serve to benefit every uranium stock out there by drawing attention to its remarkable rise in prices. However, I did note a few months ago the potential danger of this artificial/financial/investment demand secondary to the actual physical demand of uranium oxide. Any mass selling of these uranium stores could potentially wreak havoc on the uranium market and collapse the price of U3O8. It would be highly unlikely for the next several years, but could potentially happen once supply ramps up to challenge uranium demand. After all, the exit strategy for all of these funds is to SELL the uranium oxide back at a profit.

Sep 15 Uranium Stocks Update: Forsys Metals (CVE:FSY )

2006-09-15T15:54:00.000-07:00

I first wrote about Forsys back in May and make it my 7th uranium stock recommendation. Back then, I noted the company's strengths, including proximity to Paladin's Langer Heinrich mine and good insider ownership.

Since May, Forsys has continued drilling on its Valencia uranium property, trying to complete the pre-feasability study that it started in November of 2005. Results of the drilling have been given out intermittently and they have remained remarkably consistent:

(1) June 22:
21.48 m grading 0.292 kg/t U3O8 from 24.02 m to 45.5 m + 5.78 m grading 0.289 kg/t U3O8 from 111.88 m to 117.66 m
21.84 m grading 0.204 kg/t U3O8 from 108.89 m to 130.73 m + 7.45 m grading 0.201 kg/t U3O8 from 143.17 m to 150.62 m

(2) July 5:
26.47 m grading 0.214 kg/t U3O8 from 90.64 m to 117.11 m
40.48 m grading 0.414 kg/t U3O8 from 219.55 m to 260.79 m.
4.40 m grading 0.226 kg/t U3O8 from 36.40 m to 40.80 m
6.03 m grading 0.257 kg/t U3O8 from 221.8 m to 227.83m

(3) July 26:
61.60 m grading 0.337 kg/t U3O8 from 26.10 m to 87.7 m
51.74 m grading 0.224 kg/t U3O8 from 144.12 m to 195.86 m
20.62 m grading 0.338 kg/t U3O8 from 93.45 m to 114.07 m
16.72 m grading 0.255 kg/t U3O8 from 188.0 m to 204.72 m

(4) September 14:
29.07 m grading 0.236 kg/t U3O8 from 246.47 m to 275.54 m
84.74 m grading 0.332 kg/t U3O8 from 38.35 m to 123.09 m
10.03 m grading 0.231 kg/t U3O8 from 42.42 m to 52.45 m

Forsys's drilling program should be completed within six to eight weeks. These set of drill results seem to confirm the original November 2005 NI 43-101 report estimating the Valencia uranium deposit average grade of 0.22 kg/t U3O8 using a cut-off grade of 0.17 kg/t U3O8.

Because of a seeming dearth of news, the company's stock price had plummeted to a closing price of $1.10Cdn at the end of June. However, as noted in my original recommendation, Forsys CEO Duane Parnham has been consistently picking up more shares in his own company, and stood at the end of August with 3.1 million shares (Forsys has 46.5 million shares outstanding).

Perhaps as people finally realize that Forsys is fully intending to move from pre-feasibility study to a bankable feasibility study (BFS), Forsys is finally getting the attention it deserves, with the stock price leaping almost 20% today to close @ $2.26Cdn. With uranium grades similar to Paladin's Langer Heinrich property, close proximity to LH, drilling almost finished, and a BFS definite possibility, I remain optimistic that my original assessment of Forsys being an earlier version of Paladin remains correct. This is what I wrote in closing back in May and I will end of this note with the same words:

"When one considers that Paladin currently has a market cap of 1.9 billion and Forsys that of 87 million, the upside potential of the latter is made immediately obvious. Of course, Paladin's uranium projects are much more advanced than Forsys', but that difference can mostly be attributed to time, and not fundamentals. Forsys essentially IS Paladin, just at a previous stage. Paladin rushed through their Bankable Feasibility Study in 2 years and is doing their best to fast-forward into uranium production within a year of finishing their BFS. Forsys would be wise and is indeed following that same path as emblazoned by Paladin. Long-term investors should give this company a hard look as it is reasonably priced compared to its more famous uranium junior counterparts like Alberta Star or Western Prospector."

"Macroeconomic" Uranium Trends

2006-09-12T11:39:00.000-07:00

Ever since I started writing about uranium investing nine months ago, I have witnessed multiple corrections in the markets where resource stocks have very quickly slipped and mass panic ensues. Although the supply and demand fundamentals of uranium are different than many other base or precious metals, uranium stocks have always been lumped together with their resource counterparts during times of panached selling. Of course, it does not help that only a tiny fraction of the 140 Canadian uranium stocks listed on PreciousMetalResources are actual current uranium producers; they are clearly not immune to the fickleness of speculators.

However, it is also true that if one takes the long view and chart uranium stocks over the last year or so, there is no doubt that uranium stocks have benefited from the long-term bullish uranium outlook. It is during this difficult time in the Canadian stock markets that I want to reinforce the positive outlook for uranium as encouragement to be patient and wait for this storm to blow over.

Deutsche Bank Initiates Uranium Coverage

A week ago, Deutsche Bank came out with a 21-page article announcing to the world that it too, believed in the future of uranium oxide and its associated investing opportunities. The benefit here is two-pronged: first, a major investment bank lending credence to uranium investing is a joy to behold for all uranium stock enthusiasts. And secondly, the article itself is a very good summary of the current uranium cycle and is a valid analysis on what to expect in the near future in terms of supply and demand, with corresponding implications to uranium investors everywhere.

While it is impossible to summarize 21 pages, here are Deutsche Bank's main points on uranium:

(1) Concern over the availability of supplies has led to a surge in long term contracting in 2005 and 2006, resulting in increased competition and higher spot and term contract U3O8 prices.
(2) These concerns are expected to persist through to the end of 2009 before a significant increase in planned mine production results in a temporarily oversupplied market.
(3) Renewed supply concerns are expected to emerge from 2013 onwards as the US-Russian HEU agreement expires and removes a considerable amount of supply from the market.
(4) As a result, Deutsche Bank is forecasting spot price increases through to the end of 2008. Thereafter, prices are expected to decline until 2013 when the termination of the US-Russian HEU agreement is expected to put renewed upward pressure on prices.
(5) We are forecasting a continued rise in spot uranium prices in the second half of 2006, bringing the annual average U3O8 price to $US45.92/lb in 2006, US$59.00/lb in 2007 and US$63.00/lb in 2008.

CIBC World Markets: Uranium to $70/lb by 2007 End

Hot on the heels of CIBC's Chief Economist Jeffrey Rubin's implication that uranium stocks as viable investments during the coming economic slowdown and initiation of uranium coverage with bullish sentiment by investment giant Deustche Bank, CIBC World Markets came out with a view the uranium oxide might hit $70/lb by the end of 2007.

Rubin states: "Just like we have seen with oil, the appetite for uranium to feed the rapidly growing energy needs of the burgeoning Chinese and Indian economies is straining supply and driving prices up.

Mine production supplies only 62 per cent of the uranium used today. The rest comes from a variety of other sources such as natural and enriched uranium inventories and the reprocessing of spent reactor fuels — and supplies from these secondary sources are steadily declining. Increased demand from Asia will continue to put pressure on prices and the need for more rapid mine development."

Analysis:
As most uranium investors know, it has been most profitable in the last two years or so to put money into uranim stocks. However, uranium has not been talked about too much outside of a very small circle. It has been only in the last few months that I've seen more and more coverage initiated by such popularity indicators as Report on Business TV (RoBTV). Sprott has been heavily invested in uranium but the company cannot be considered a giant in the financial world. With Deustche Bank and CIBC World Markets now weighing in on the bullish side of uranium, you can bet that your ordinary Joe and Jane will eventually get to know uranium oxide and the benefits of investing in U3O8 stocks.

CanAlaska Ventures (CVE:CVV) Volume + Price Spike

2006-09-06T19:42:00.000-07:00

An announcement by CanAlaska Ventures today resulted in nearly a 20-fold increase in trading volume and a healthy 19% gain to pace the uranium juniors.

The impetus that sparked this particular spike was the unfurling of a JV agreement between CanAlaska and a subsidiary of Japanese-owned Mitsubishi Corp., in which Mitsubishi Development Pty (MDP) can acquire a 50 per cent stake in the CanAlaska-owned West McArthur uranium project by spending $11 million over the next 3 1/2 years.

West McArthur uranium project

CanAlaska's flagship McArthur uranium project is located in Saskatchewan, within kilometers of Cameco Corporation's (TSE:CCO NYSE:CCJ) world-class McArthur River mine.

At the end of May, CanAlaska announced the presence of uranium in the four holes it had drilled on the McArthur property, the best of them containing 0.28% of uranium oxide over 0.2 meters at about a kilometer deep. Continued drilling was deemed to be the next logical step.

In mid-June, the company began its summer exploration program, with four crews, fifty staff, and a $6.5 million budget to further delineate the McArthur property, among other endeavors (CanAlaska has 18 uranium projects in the Athabasca basin alone). A hole 100 meters away from its promising 0.28% U3O8 neighbour was beginning to be drilled late-June.

The Deal

Mitsubishi Development Pty (MDP) is the ferrous raw materials division of its famous parent company. As expected from its Australian roots, its strength lies in coal and MDP has a stake in some 10 coal mines. It is interesting but not necessarily surprising to witness an Australian coal producer committing to a Canadian uranium venture. This deal serves to highlight the escalating interest in uranium worldwide, with the logical progression in the uranium sector now being increasing M&A activity and JVs.

Case in point, as Japan readies new nuclear reactors in the future, several Japanese companies have been actively seeking out stakes in future uranium production. If my readers can remember, Sumitomo Corp. and Kansai Electric Power Co., Japan's third-largest trading firm and second-ranked utility, negotiated a JV with Kazakhstan's state-run KazAtomProm to develop uranium deposit in Kazakhstan.

As for CanAlaska, today's agreement represents a real coup. $11 million dollars is substantial, not to mention the credibility of having a multinational behemoth getting your back; I know of no other uranium junior with a market cap under $50 million who has successfully signed a JV of this size, let alone with a partner like MDP. Still, continued drilling needs to be done and further good results would go a long way in furthering CanAlaska's uranium ambitions.

Sep 6 Uranium Stocks Update: Ur-Energy (TSE:URE)

2006-09-06T10:56:00.000-07:00

Ur-Energy was featured as my sixth uranium stock pick back in April. At that time, I commented on the company's potential and drive to become a uranium producer within two years at their Wyoming property:

Production at Lost Soldier is optimistcally set to begin in mid-2008. Of the 26 million lbs of uranium in Lost Soldier, half are indicated and half are inferred. A look at their proposed timeline indicates that several key events must take place for 2008 production to happen: good resources studies, environmental studies + permitting, engineering, financing, and then construction of the actual in-situ leaching ISL wellfield. In addition, Ur-Energy must establish a satellite plant to expedite the ISL operation, and to tie the plant in with an existing uranium-producing company's NRC license, most likely with Power Resources (Cameco-owned).

In the months since, Ur-Energy has seen its share price rise almost 33%. Several key developments have brought about this impetus:

(1) In early June, URE announced results of two National Instrument 43-101 compliant resource estimations that increased the resources on its Lost Creek and Lost Soldier projects from the relevant historic resources; Lost Soldier specifically went from a historic indicated and inferred resource of 10 million pounds U3O8 to 12.2 million pounds U3O8 of NI 43-101 compliant Measured and Indicated Resources with an additional NI 43-101 Inferred Resource of 1.8 million pounds U3O8

(2) In July, URE announced that they had nearly a dozen crews operating at Lost Soldier and Lost Creek, conducting necessary engineering and baseline data studies. Ur-Energy also presented Applications for Permit to Mine to the Nuclear Regulatory Commission with members of the Wyoming Department of Environmental Quality and Ur-Energy contractors AATA International and Hydo-Engineering

This company reminds me of a smaller, earlier version of Paladin Resources (TSE:PDN) in that it is one of the few uranium juniors who present a transparent plan, set deadlines and then aggressively meet them. Their singular drive to become uranium producers in late-2008 is commendable and each successful step in making that a reality is reflected with a revaluation in their stock price.

With sxr Uranium One (TSE:SXR) buying up Rio Tinto's (NYSE:RTP) Sweetwater Uranium mill in Wyoming, there has been speculation that UR-Energy is primed to become a takeover target for SXR. Bill Boberg, CEO of Ur-Energy, intriguingly commented a few days ago that:

"The uranium sector continues to be characterized by a high level of M&A activity. The Company has had preliminary discussions since early 2006 with several companies concerning potential consolidation but nothing has progressed beyond that point."

Whether Ur-Energy ultimately is taken out by a larger uranium company or progresses towards uranium production, its prospects remain bright as long as the company keeps on being aggressively driven towards being a uranium producer.

Sep 4 Uranium Stocks Update: Urasia Energy (CVE:UUU )

2006-09-04T16:36:00.000-07:00

Although I was less than impressed with their foreign exchange losses hampering the balance sheet, Urasia Energy has gained in recent days due to its trading in the London Stock Exchange's Alternative Investment market (AIM). Canaccord Adams has maintained its "buy" rating at $4, citing increased investor exposure of the uranium company as impetus.

Urasia's CEO Philip Shrivington spoke at RobTV's Power Breakfast on August 29, 2006, with his key message being:

(1) Akdala continues at full production capacity: 70% of 2.6 million lbs U3O8/lb
(2) further production in Kazakhstan to commence end of 2007, JV with Kazatomprom
(3) uranium production worldwide remains tight, prices will continue to increase due to lag
(4) Kurdistan and Kazakhstan exploration continues
(5) mentioned Urasia's board as being aggressive, citing Goldcorp's lineage
(6) cash @ $100 million
(7) AIM listing to accomodate UK interest and provide another market to raise funds if needed
(8) uranium prices have gone up for two years in a row and will likely not be affected by the coming slowdown in the economy
(9) Urasia is leveraged to uranium price, growth in resource base, and production, implying stock momentum can be sustained.

None of what Urasia's CEO said was too new or surprising. I would have liked to hear a pointed question to him about what Urasia plans to do about its foreign exchange losses, but it seems everything was scripted away from looking at the company's balance sheet. Aside from that, it looks like Urasia remains on schedule and its uranium production model in Kazakhstan is working out.

Sep 1 Uranium Stocks Update: International Uranium Corporation (TSE:IUC)

2006-09-01T12:31:00.000-07:00

Seven weeks ago I had written on the significance of IUC.TO reopening its American uranium and vanadium mines. Since then, the stock has rebounded and has broken past the psychological $6.00 mark on good volume.

The company released a MD&A in mid-August so let's see what they have to say in their outlook:

In June 2006, the Company announced the re-opening of a number of its U.S. uranium/vanadium mines. Mining is scheduled to begin during the fourth quarter of 2006 with mined ore stockpiled at the Mill. The Company plans to begin development activities on one mine and commence mining operations at three other mines, all on the Colorado Plateau.

Basically, IUC and Paladin Resources are both going to be producing U3O8 at roughly the same time. Uranium oxide is trading close to the $50/lb mark and vanadium, exclusive to IUC, is around $8-9/lb.

The Mill is continuing to process alternate feed material and is expected to produce approximately 500,000 pounds of U3O8 from the processing of a high-grade alternate feed material, of which approximately 210,000 pounds are scheduled to be produced during 2006. The current mill run began in March 2005 and is anticipated to last through to the second quarter of 2007. The Company does not have any fixed contracts for this material and will evaluate commercial opportunities for sale of the material throughout the year.

Even without the restart of uranium mining, IUC has half a million pounds of U3O8, which at current market price represents roughly $25 million US.

The Company’s exploration programs continue through 2006, both in Canada and Mongolia. Currently, the Company has two drilling programs underway at the Moore Lake Joint Venture and Park Creek project. In addition to the drilling programs, the Company has significant field programs on a number of its properties.

Just today, IUC announced the starting of drilling on Consolidated Abaddon's (CVE:ABN) Sims Lake uranium project in western Labrador. IUC has the right and initial option to acquire a 51% interest in the uranium rights to the Sims Lake property over a period of two years.

With prospects continuing to look bright for IUC, insider buying has also picked up:

Ellegrove Capital Ltd., a Barbados resident company, through its joint actor, has acquired 1,985,500 common shares of International Uranium Corp. As a result of this acquisition, Ellegrove, together with its joint actors, holds as at the date hereof, a total of 12,982,000 common shares, which total holdings represent approximately 14.67 per cent of the issued and outstanding shares of IUC.

Ellegrove is owned by a trust, of which trust's settlor is Adolf H. Lundin.

Lundin is part of IUC's board.

Of all the uranium stocks I have recommended, IUC to me seems to have the greatest disparity between intrinsic and actual value. At $550 million, it behooves me to find it beneath the market cap of a company like Aurora Energy TSE:AXU, who admittedly has great uranium properties but will not mine a lick of it for years.

Aug 31 Uranium Stocks Update: sxr Uranium One (TSE:SXR)

2006-08-31T15:53:00.000-07:00

For the past month, SXR's stock has essentially been flat, although volume in the last week has picked up, along with most of its uranium counterparts. Let's examine any updates pertaining to SXR.TO:

Dominion

SXR Uranium One's flagship project in South Africa remains on schedule to produce uranium oxide in the first quarter of 2007. Neil Froneman, CEO of SXR Uranium One, comments that the project payback is expected to be five years from the start of construction. In addition,
Dominion is now proven to have at least 31-million pounds of uranium oxide (U3O8) after the completion of the first-phase feasibility study, and work is now underway to prove more of the estimated 300 million lbs of uranium oxide in Dominion. The average operating cost for the first phase is expected to be $14.50/lb of U3O8, net of gold by-product credits; originally the cost was supposed to be higher but due to the high uranium oxide price, SXR Uranium One plans to mine lower-grade ore as well.

Honeymoon

The long-awaited fourth Australian uranium mine has been approved by SXR.TO's board after favorable recommendations from the feasibility study. Honeymoon will be an ISL project with an annual production capacity of 400 tonnes (880,000 lbs) of U(3)O(8) and a total project life of between 6 - 7 years. Project costs are estimated to be $35.9 million with production to start in 2008 (need to build infrastructure such as roads) with a payback period of 2.9 years from commencement of construction. Lifetime operating cost for Honeymoon will be about the same as Dominion at $14.13/lb of U3O8.

Aflease + Modder East

SXR.TO through its 75%-owned subsidiary Aflease Gold announced the results of a feasibility study in the Modder East project located also in South Africa. In short, the feasibility study suggested that Modder East indeed was a workable project with a million ounces of gold, production to start roughly in 2009-2010 with approximately 110,000 ounces of gold a year, an average cash operating cost of $217/oz and project payback from commencement of mine construction is estimated to be 4.5 years

Financing

SXR recently engaged in a $50 million lending transaction using its Aflease shares as collateral. The loan has a term of 12 months with a 9% interest rate. With its recent excursions into the States with the two purchases of Sweetwater from Rio Tinto (NYSE:RTP) and Shootaring Canyon from U.S. Energy Corp. (NASDAQ:USEG) totalling $165 million, with continuing developments costs for Dominion and now Honeymoon and only $84 million in cash, there was some doubt as how SXR was going to finance its assortment of projects. The fact that they chose to finance through loans shows that the company is not going to use share issuance exclusively.

African Company Status

The South African Reserve Bank (SARB) has confirmed SXR Uranium One as an "African Company", meaning that qualifying South African institutions can hold an additional 5% of their portfolios in Uranium One shares to their normal entitlement under South African exchange controls.

Conclusion

As SXR continues to close in on the status of being a uranium producer, it has managed to navigate a tricky course with panache, filling its pipeline with uranium and gold projects alike. I look for continued development in this fast-growing company, whose total number of shares outstanding are surprisingly only a quarter of Paladin Resources' (TSE:PDN) and Urasia Energy's (CVE:UUU). With a current market capitalization of $943 million, SXR is not a cheap stock, but one that I classify as a uranium blue chip, if there were such designations. Long-term investors fear not putting your money into this company.

Aug 31 Uranium Stocks Update: Paladin Resources (TSE:PDN)

2006-08-31T02:37:00.000-07:00

Paladin announced that its Langer Heinrich project, originally set to be commissioned in September of this year, actually was commissioned a month earlier than expected. In keeping with past deadlines, the company seems to be well worth the premium that investors are placing on it as it has yet to disappoint with any news incongruent with what they had originally detailed in their presentations; a very demonstrative and comforting statement thrown out by Paladin is that its Langer Heinrich project "remains within the stated US$92M 2005 BFS CAPEX budget."

In addition, it is expected that the first contracted shipment of uranium oxide concentrate from Langer Heinrich will be shipped in the first quarter of 2007. It is expected to produce 2.6 million pounds of U308 a year over the next 17 years.

The current uranium oxide price, by the way, is $48.50/lb as reported by uxc.com

In other Paladin news, Valhalla (being bought out by Paladin) and Resolute Mining are paying a quarter of a million dollars to Summit Resources to restructure Valhalla's Isa Uranium joint venture, in which Summit agreed to forego the option of acquiring the whole of the joint venture project after a notice period. This still does not resolve their attempted legal action in blocking Paladin's takeover of Valhalla, but it is a step in the right direction.

Finally, on a slightly more concerning note, Malawi rights groups are protesting Paladin's involvement in Malawi to start uranium production in 2008. Both the company's 16 year tax break and potential environental impact secondary to uranium mining have been raised as concerns. It would be interesting to see Paladin's response to this local opposition, although it has plenty of time to do so.

Still, as Paladin Resources' stock has jumped appreciably, the short-term plusses seem to definitely outweight the potential long-term negative at present.

G8 + Nuclear Power + China

2006-07-16T23:35:00.000-07:00

G8 leaders agreed today to make low-enriched uranium available to each other for use in nuclear power plants. A conference with a keen focus on energy, nuclear power has been on the G8 agenda and uranium is the obvious benefactor. The resurgence in nuclear energy is being fronted by multiple countries, chief amongst them Japan, Russia, Great Britain, Canada, and the United States, not to mention China and India, not members of the G8 but clearly uranium-hungry countries.

Speaking of China, senior representatives of four Chinese trading companies will attend a conference in Perth next week with a view to signing equity deals with Australian uranium explorers. In order to build the forty or so reactors in the next fifteen years, China had signed a uranium treaty with several Australia months ago. Legislation allow uranium mining has not changed significantly since that time, but do not expect that to last. China will get its uranium, and Australian uranium stockholders would like nothing more than to see that happen.

July 12 Uranium Stocks Update: Paladin Resources (TSE:PDN)

2006-07-12T23:44:00.000-07:00

Paladin officially announced their A$174 million ($130 million) bid for Valhalla Uranium Ltd.
The company is offering one share for every 3.16 Valhalla shares, valuing the company at A$1.45 a share, or 41 percent above the average price of the shares over the past 20 trading days. Valhalla directors recommended shareholders accept the bid in the absence of a higher one.

Of course, Summit Resources owns half of the Valhalla and Skal deposits and it was expected that they would have major objections at being overridden by Paladin on their Joint Venture (JV) with Valhalla. However, Summit has already come out with a terse statement stating that, pending legal consultation, Paladin did not trigger any pre-emptive rights in the original JV agreement between Summit and Valhalla. It is an admission of sorts that this deal will most likely go through successfully.

State of the Uranium World

2006-07-12T22:43:00.000-07:00

Uranium has been heating up on all fronts in the last few weeks. Acquisitions by Mega Uranium (CVE.MGA), Paladin Resources (TSE:PDN), SXR Uranium One (TSE:SXR), and the merger of Bayswater Ventures (CVE:BVE) and Pathfinder Resources (CVE:PHR) reinvigorated uranium stocks while signalling the advent of the merger and acquisition phase of the sector.

In addition, England has thrown its proverbial hat into the uranium game with its just-unveiled Energy Policy:

Blair was speaking on the eve of the publication of a major energy review by his own government, which is expected to endorse greater use of nuclear power.

The establishment of new nuclear powerplants in the United Kingdom has been approved. Industry secretary Alistair Darling says that nuclear power would be a vital part of the mix of energy supply for the UK over the next 40 years.

A reader of my blog asked me about the new English uranium fund

Geiger Counter Limited, a new fund to concentrate on investing in uranium and nuclear power opportunities, launched this week on the London Stock Exchange [LSE:GCL] and Channel Islands Stock Exchange [CISX:GCL], offering investors yet another way into yellowcake.

Finally, uranium has even managed to propel itself to the world stage at the G8 conference. The idea of global nuclear alliance has been bandied around by several nations, although Germany and Italy has been reluctant because of minority acceptance of nuclear power amongst their respective peoples.

One potentially interesting sideshow is the attempt by Russia to alter the agreement with the United States on the sale of uranium.

Russian President Vladimir Putin has said he will urge Bush at this weekend's rich nations' meeting in St. Petersburg to alter two supply agreements in order for Russia to ship more enriched uranium to the United States.

Russia already supplies about half the enriched uranium used by U.S. nuclear power plants and the lawmakers said allowing Russia to "dump" more of the fuel in the U.S. market could scuttle construction of two planned American uranium enrichment facilities.

Additionally, Russian access to the U.S. market at this time is likely to result in market destabilization potentially jeopardizing resurgence of the nuclear-related industry.

Putin said he was against U.S. "discriminatory" restrictions on the sale of Russian nuclear fuel and will raise the issue with Bush when they meet at the G8.

The future outlook of the uranium spot price, and consequently, the entire uranium industry, is ultimately determined by supply and demand and readers would do well to do DD on not only the state of the uranium juniors, but the macroeconomic nuclear picture that is in a constant state of flux presently.

Jul 11 Uranium Stocks Update: sxr Uranium One (TSE:SXR)

2006-07-11T08:39:00.000-07:00

SXR has done it again. A day after announcing a deal with Rio Tinto to acquire its uranium assets, SXR is buying most of U.S. Energy Corp.'s (NASDAQ:USEG) assets as well, specifically the Shootaring CanyonUranium Mill (the "Shootaring Canyon Mill" or the "Mill") in Utah and interests in a substantial land package comprising 40,589 acres of uranium properties in Utah, Wyoming, Arizona and Colorado.

This means that SXR will own two of the four conventional uranium mills in the United States and represents a continuation of their aggressive foray into American uranium.

In October 2005, U.S. Energy reported that independent consultants BehreDolbear & Company had estimated the replacement value of the Shootaring CanyonMill to be US $80.5 million.

As you can imagine, the land package itself is neither developed nor sounds all that impressive right now. SXR is basically buying for the mill and the land itself is a bonus. The most advanced uranium asset in USEG's portfolio is a 50% interest in the Sheep Mountain claims, 30 miles away from the Rio Tinto-acquired Sweetwater mill and with a historical (not verified) resource of 8.6 million pounds.

Neil Froneman, CEO of SXR, had this to say today:

We think that these two mills together, once they’re in full production will produce about five million pounds. So. you know, this has the potential to more than double the US output. I have no doubt that there will be other production, other than ours, but certainly five million is quite a decent number for the United States as an incremental value.

Remember, I quoted in my International Uranium Corporation (TSE:IUC) update that John Indall, Uranium Producers of America Executive Director stating that uranium production will head towards 20 million lbs/year in the U.S. SXR producing 5 million lbs and IUC producing another 1.5 million lbs will sure help to help that goal. Other production should follow from promising uranium assets of companies like Ur-Energy (TSE:URE), Strathmore Minerals (TSE:STM), and Energy Metal Corporation (TSE:EMC)

A conference call is scheduled for tomorrow by the company..we'll see what SXR has to say about their recent moves then.

Jul 10 Uranium Stocks Update: sxr Uranium One (TSE:SXR)

2006-07-10T23:00:00.000-07:00

SXR Uranium One made a tremendous move today, acquiring Rio Tinto's (NYSE:RTP) Sweetwater Uranium mill and associated Green Mountain uranium properties located in south-central Wyoming.

Uranium One will pay Rio Tinto $110-million on closing, of which $65-million will be payable in cash and $45-million will be paid by way of the issuance of about 6.1 million Uranium One common shares.

The uranium game is clearly heating up with the spate of recent announcements. We are now witnessing move and countermoves by some of the biggest uranium juniors in their efforts to fast-track and grow their respective companies and shares of the uranium market on a worldwide level. Paladin's (TSE:PDN) takeover bid of Valhalla and now SXR's foray into the American market from its South African stronghold are key signals.

For the multinational multibillion dollar Rio Tinto, this is a great deal for them as well, letting a junior company do most of the work fro them. It would be interesting to observe over the next year or so what or if they have more ambitious intentions towards SXR.TO as the mammoth Dominion mine gets ready to produce 4 milllion pounds of uranium oxide in the spring of 2007.

July 9 Uranium Stocks Update: International Uranium Corporation (TSE:IUC)

2006-07-09T20:24:00.000-07:00

Revisiting IUC.TO

About a week ago, an interview with Uranium Producers of America Executive Director Jon Indall revealed his thoughts about uranium oxide production in the United States.

"It's fairly apparent this industry, in the next four to five years, could be producing in the range of 20 million pounds.” Questioned about the big jump from about two to three million pounds of current uranium mining production, Indall explained, "Conservatively, five to six years, but maybe even sooner."

This was nicely timed with the announcement three weeks ago by International Uranium Corporation that they were reopening their American uranium mines. Now their stock has rebounded from a closing low of $4.40 to $5.89 Cdn, but still a far cry from their 52-week high of $8.15. The stock had already been on a slow descent even before the steep market correction of all resources, most likely related to the absence of IUC's direction as to when to proceed mining. However, let's take a look at what IUC had to say about their re-opening and why I am re-recommending IUC stock now:

International Uranium Corporation (TSX:IUC) is pleased to announce the re-opening of its U.S. uranium/vanadium mines. Mining activity will commence immediately and mined ore will be stockpiled at the Company's wholly-owned White Mesa uranium/vanadium mill in southeastern Utah. Initial production rates will be approximately 3.4 million pounds of uranium and 5.9 million pounds of vanadium. The Mill is currently completing an alternate feed contract which will net the Company in excess of 500,000 pounds uranium in 2006.

I like many things in this paragraph. Immediately is probably the best word to my ears, as you do not hear this often in the uranium production side of things. 3.4 million pounds of uranium is also a tremendous number. Urasia Energy (CVE.UUU) averages 1.8 million lbs per year and they just achieved production rates in April 2006. IUC will mine 3.4 million lbs this year, as thereafter, plan on averaging at the 1.5 million lb level. Still, this is a great number and they will further benefit by mining tons of vanadium, which in itself is also a fairly expensive metal.

The Company holds conventional mining properties in the Four Corners region of the western United States. The properties are in three distinct mining districts; the Colorado Plateau, the Henry Mountains and the Arizona Strip. The Company intends to immediately commence mining activities at the Pandora, Topaz, Sunday and St. Jude mines on the Colorado Plateau. This will be followed by two additional mines in the Colorado Plateau region in early 2007. All of IUC's mines on the Colorado Plateau are fully permitted. In the Henry Mountains area, plans are to complete the permitting on the Tony M mine with production slated for late spring 2007. Development of the Bullfrog property will begin in the spring of 2007 and production is projected to begin mid-year 2008. The Company will also review and revise the engineering estimates for the fully permitted Arizona 1 Mine in the Arizona Strip district with development scheduled to begin early 2007 and production beginning in late summer 2007.

This is an extremely short timeline for production and, if indeed it is achievable, would vault IUC into the upper echelon of uranium juniors. Note that Paladin Resources (TSE:PDN) is planning production in September 2006 whereas SXR Uranium One (TSE:SXR) is starting in the spring of 2007 so IUC is really not far behind at all. It also helps that IUC has had their White Mesa mill operating throughout and have half a million pounds of uranium oxide waiting to be sold.

IUC is also pleased to announce that Mr. Harold Roberts, P.E. has been appointed IUC's Vice President of Operations and will be responsible for the Company's U.S. mine and mill operations. Harold was previously Vice President, Corporate Development and prior to joining IUC was the President of Energy Fuels Nuclear, Inc. prior to the acquisition of the Energy Fuels uranium assets by International Uranium Corporation. From 1975 to 1978, Mr. Roberts was with Western Nuclear, Inc., a subsidiary of Phelps Dodge Corporation, during which time he participated in the design, construction and operations of the Sherwood Uranium Mill, and was involved in numerous projects related to the company's mining and milling operations in central Wyoming. Beginning in 1978, Mr. Roberts was employed by Energy Fuels with his responsibilities including design and construction of the White Mesa Uranium Mill.

IUC really sounds like they are serious now. Bringing back the former President of the company that IUC bought out years ago and a guy with this much uranium expertise and experience was a coup.

In short, IUC's prospects brightened up considerably with their announcement mid-June. Although the stock is no longer as cheap as it was two weeks ago, it is still very reasonably priced now. With a market cap of just over half a billion dollars, IUC is actually undervalued and is trading at a discount of at least 10%.

July 9 Uranium Stocks Update: Paladin Resources (TSE:PDN)

2006-07-09T00:10:00.000-07:00

A report from The West Australian claims that the trading halt of Paladin on the ASX is probably due to its attempted takeover of Resolute Mining-controlled Valhalla Resources and their uranium deposits in the Queensland region, where uranium mining arguably may be permitted sooner than any other Australian territory, although protection of the coal industry remains a considerable roadblock.

It is understood Resolute is negotiating to sell its 83 per cent stake in Valhalla to Paladin. Valhalla shares last traded at $1.22, valuing Resolute’s stake at just over $120 million.

Paladin’s chief focus remains on Langer Heinrich and the Kayalekera project in Malawi, but it has made no secret of its desire to start mining in Australia within five to 10 years.

This is a reasonable estimate of how long it will take for uranium to ever be mined out of new Australian mines. Paladin is trying to diversify its core holdings and $120 million, while significant for a $2 billion dollar uranium junior, is a fair price for future growth.

Yet the prospects of a trouble-free deal with Paladin appear unlikely, given Summit’s own desire to consolidate the Valhalla and Skal projects.

Summit Resources ASX:SMM owns a portion of the properties of interest and PDN.TO will likely have to negotiate with them to seal the deal.

I'd like to emphasize at this point that no official announcement has been made by Paladin as of this time. However, it seems that uranium merger mania might have struck again..

Uranium Merger..Mania?

2006-07-08T03:25:00.000-07:00

Intercontinental uranium marriages between Australian and Canadian juniors are signalling the advent of the M&A phase of the uranium cycle. Canadian junior Mega Uranium (CVE.MGA), with a market cap of roughly $375 million Cdn, offered a friendly bid for Australian junior Redport (RPT.ASX) at about $75 million undiluted. Apparently, Mega wants several of the uranium properties Redport owns in Western Australia, one of the few Australian areas where even the idea of further uranium mining has not met with fierce opposition.

I believe that uranium mergers such as the one being proposed will increase in rapidity. Urasia Energy (UUU.V) has proven that it is possible for a junior to have a viable uranium business model, and they started out less than a year ago. Just looking at a list by market capitalizations of the top fifteen or so Canadian uranium companies, it is not hard to believe that a fair number of them who are already producers or soon to be producers will start to swallow up their smaller uranium junior counterparts, whose market caps usually range in the $20-80 million range, who have great prospective uranium properties but are not interested or have not started to develop them.

Companies to keep an eye out for include my favorites Paladin Resources (TSE:PDN), sxr Uranium One (TSE:SXR), as well as the bigger uranium juniors like UEX Corp (TSE:UEX), International Uranium Corporation (TSE:IUC), Denison Mines (TSE:DEN), Laramide Resources (CVE.LAM), Fronteer Development Group (TSE:FRG), Aurora Energy (TSE:AXU), and Altius Minerals (TSE:ALS)

July 7 Uranium Stocks Update: Paladin Resources (TSE:PDN)

2006-07-07T08:48:00.000-07:00

Paladin Resources (PDN.TO) has been in the news recently. Let's see what they have done..

(1) appointment of Brenden O'Hara to executive team

Paladin has a stated global expansion strategy, designed to allow the Company and its shareholders to benefit from the unique window of opportunity it has created for itself in the natural uranium supply industry. Mr O'Hara will have responsibility in this area of activity and his extensive business and corporate experience will considerably strengthen this cornerstone of the Company's growth.

How can Mr. O'Hara benefit Paladin? He was lured away by Paladin from the Australian Stock Exchange (ASX) itself, where he came into contact with many of the Western Australian companies listed on the exchange.

(2) first drawdown of $71 million bank finance project

Paladin has in place US$71M bank project finance facilities, consisting of a 7 year Project Finance Facility of US$65M and a Standby Cost Overrun Facility of US$6M.

Langer Heinrich remains on schedule to commence the staged commissioning of the plant on 22 September 2006. Overall, the project is 80% complete and construction is anticipated to be completed within the stated budget of US$92M.

As stated before in previous articles, Paladin is very punctual about its deadlines. No surprises here.

(3) trading halt on ASX

..Company's securities are in a trading halt on the Australian Stock Exchange ("ASX") as the Company has announced it is currently negotiating a potentially material transaction. The trading halt will be lifted following the release of an announcement detailing the transaction, expected to be made before opening of trading on TSX on Monday 10 July, 2006.

Interesting. Paladin's stock on the TSE has been soaring for the past few days. Right now I hesitate to speculate on what the material transaction might be, but I will definitely discuss it once it is made.

Overall, Paladin continues to impress me with their robustness. Their uranium mine is just over two months from producing and the uranium conditions remain very much in their favor.

July 6 Uranium Stocks Update: Urasia Energy (CVE:UUU )

2006-07-06T08:47:00.000-07:00

Urasia Energy's three and nine-month financial statements came out about a week ago and I thought it might be interesting to see what management had to say in their discussion and analysis. As I have said before, Urasia's performance in this quarter is to my mind very important as a rough barometer of how successful these new uranium producers (Urasia and soon to be Paladin (TSE:PDN), SXR Uranium One (TSE:SXR)) are going to be.

The Akdala planned annual production rate of 2.6 million pounds of U3O8 (1,000 tonnes uranium) was first reached on a monthly basis in April, 2006.

This means that because the three month quarter ended in April, the numbers do not reflect the planned annual production rate yet, whereas the next quarter's financial statements will.

ISL Uranium mine production, development and operations are critically dependent on how many wells can be completed and placed into production in a year. This is the single most important limiting factor in ISL Uranium production.

This is why Urasia Energy spent $13 million to purchase eight drilling rigs. They increased their number of rigs from 4 to 8, completed 39 new wells in this quarter, and increased their flow rates from the wells. All this added up to Urasia reaching their annual production rate in April.

The average unit price obtained for sales in the quarter was $38 per pound of U3O8, which resulted from recently negotiated contracts, as opposed to $17/lb obtained in the previous quarter from deliveries made in terms of older lower priced contracts. The spot price of uranium at April 30, 2006 was $41.50/lb U3O8. During the quarter the average unit cash cost per pound of U3O8 sold (including mining general and administration expenses) was approximately $10.00/lb U3O8, as opposed to approximately $11.00/lb U3O8 in the previous quarter.

Net income from operations from this quarter to April was almost +$4 million. As we all know, since April 30, the uranium oxide spot price is now at $45.50 according to uxc.com. With a higher uranium spot price and increased volume, revenue from uranium sales in this quarter will exceed the $14.38 million of last quarter.

The foreign exchange loss during the three months amounted to $12,403,000. The majority of the loss consists of a non-cash loss of $12,483,000 arising from translation of the future Kazak Income Tax liability in respect of the Company’s investment in Kazakhstan. During the quarter the Tenge strengthened approximately 7% against the US dollar. The translation loss was partially offset by realized gains on holding Canadian dollars which also strengthened against the US dollar.

This is the worrisome part. Urasia ended up with a net loss of $12 million, largely in part of this foreign exchange loss. I'm much less concerned about the size of the tax levy of the Kazakhstan government ($5.4 million) than I am about the Tenge continue to strengthen against the US dollar, which is not at all inconceivable. Taxes are much more predictable (even in a foreign country like Kazakhstan) and reflect the profitability of the Akdala operation for Urasia. Foreign exchange losses, however, essentially reflect nothing of the company's underlying business model or its future viability, yet stain the bottom line nonetheless.

Australian Uranium Stocks Listing (June)

2006-05-29T20:47:00.000-07:00

Acclaim Exploration ASX:AEX
Adelaide Resources Limited ASX:AEX
Alliance Resources ASX:AGS
Apex Minerals ASX:AXM
Arafura Resources ASX:ARU
Ashburton Minerals ASX:ATN
Aura Energy ASX:AEE
Australian United Gold ASX:AUL
Bannerman Resources ASX:BMN
Batavia Mining ASX:BTV
BHP Billiton ASX:BHP
Bullion Minerals ASX:BLN
Cazaly Resources ASX:CAZ
Compass Resources ASX:CMR
Contact Resources ASX:CTS
Curnamona Energy ASX:CUY
Deep Yellow Ltd ASX:DYL
Encounter Resources ASX:ENR
Energy Metals ASX:EME
Energy Resources of Australia ASX:ERA
Equinox Minerals ASX:EQN
Extract Resources ASX:EXT
Georgetown Mining ASX:GRG
Globe Uranium ASX:GBE
Gold Search ASX:GSE
Golden State Resources ASX:GDN
Goldstream Mining ASX:GDM
Glengarry Resources ASX:GGY
Giralia Resources ASX:GIR
Great Western Exploration Limited ASX:GWE
Green Rock Energy ASX:GRK
Havilah Resources ASX:HAV
Hindmarsh resources ASX:HMR
Image Resources ASX:IMA
Jindalee Resources ASX:JRL
Kalgoorlie Boulder Resources ASX:KAL
Korab Resources ASX:KOB
Marathon Resources ASX:MTN
Matrix Metals ASX:MRX
Maximus Resources ASX:MXR
Monaro Resources ASX:MRO
Monax Mining ASX:MOX
Nickel Australia ASX:NKL
Nova Energy ASX:NEL
Omegacorp ASX:OMC
Paladin Resources ASX:PDN
PepinNini ASX:PNN
Redport ASX:RPT
Polaris Metals ASX:POL
Red Metal ASX:RDM
Reefton Mining ASX:RTM
Rio Tinto ASX:RIO
Scimitar Resources ASX:SIM
Siberia Mining Corporation ASX:SIB
Southern Gold ASX:SAU
Southern Cross Exploration ASX:SCX
Stellar Resources ASX:SRZ
Strike Resources ASX:SRK
Summit Resources ASX:SMM
Toro Energy Limited ASX:TOE
U3O8 Limited ASX:UTO
Uranex ASX:UNX
Uranium Exploration ASX:UXA
Washington Resources Limited ASX:WRL

American Listed Uranium Companies (June)

2006-05-29T20:42:00.000-07:00

BHP Billiton Limited (NYSE:BHP)
CanAlaska Ventures (OTC:CVVLF)
Cameco Corporation (NYSE:CCJ)
Entourage Mining Ltd (OTC:ETGMF)
Fronteer Development Group Inc. (AMEX:FRG)
Lakefield Ventures Inc. (OTC:LKFV)
Rio Tinto (NYSE:RTP)
Uranium Energy Corp (OTC:URME)
Uranium Resources, Inc. (OTC:URRE)
U.S. Energy Corp. (NASDAQ:USEG)
USEC Inc. (NYSE:USU)

Uranium Stocks Post Correction

2006-05-28T16:16:00.000-07:00

An inevitable broad-based correction hit the TSE and Venture exchanges and uranium stocks were not spared. As I have cautioned before, there were many uranium juniors whose market caps were out of proportion to their actual value. These were the companies who were hit worst of all and who have been slow to rebound.

Out of panic selling, however, comes opportunity and many bargains could have been found during the nadir of correction. For example, Duane Parnham, CEO of Forsys Metals Corp. (CVE:FSY) added 40,700 shares from May 12-19, increasing his personal stake during a time where FSY plunged from $1.93 to $1.59 (it is back up to $1.80).

Of course, the fundamentals of uranium supply and demand has not changed a single iota during this time. Weekly uranium oxide spot price from uxc.com is still at US $43.00/lb. Speculative buying and selling were largely to blame for the the massive upward trend of uranium juniors, and the painful correction thereafter.

This is why picking the right uranium stock is essential. While it was disheartening to see Urasia Energy (CVE:UUU) plunge from all the way down to $2.67 from the $3.40 mark, the fact that I have full confidence in its management and its status as one of the emerging uranium producers in a market with unchanged fundamentals gives confidence to average down my buying price. The stock right now is at $2.95.

Great companies will always live through corrections. Urasia, Paladin Resources (TSE:PDN), Forsys, Ur-Energy (TSE:URE), sxr Uranium One (TSE:SXR), and Uranium Participation Corporation (TSE:U) can give you that measure of comfort even in these volatile times.

7th Uranium Stocks Pick: Forsys Metals Corp (CVE:FSY)

2006-05-13T11:41:00.000-07:00

Few are the places in this world where a uranium mine can open within a few short years of applying for a permit. Namibia was one of them as Paladin Resources (TSE:PDN) managed to obtain government approval, perform Pre-Feasibility and Bankable Feasibility Studies, and accelerate their building to the point where they are scheduled to begin producing uranium oxide in a few short months. Investors of Paladin have been greatly rewarded as the company transformed itself into a uranium near-producer; Paladin has basically outperformed every other Australian stock for the last few years.

It did help that Namibia is very amenable to mining in general, and especially, uranium mining. Rio Tinto's (NYSE:RTP) Rossing mine has been operating in Namibia for decades, and currently produces 7.7% of the world's uranium. In fact, the government of Namibia owns 3% of the company while the mine accounts for 10% of the country's GDP. In other words, Namibia is reliant on uranium and quite amenable to further uranium production coming out of their country.

Paladin's Langer Heinrich is only forty kilometers away from Rossing, and claims the status as the imminent second uranium mine in Namibia. This, along with visionary leadership, experience with mining uranium, and clear communication with investors has vaulted Paladin as the preeminent uranium junior, with a market cap even beyond that of uranium producer Urasia Energy (CVE:UUU).

Now, the astute investor would wonder, is there a third prospective mine in uranium-friendly Namibia? Indeed there is, and the company aiming to put it all together is Forsys Metals Corp. (CVE:FSY).

The company's main uranium interest lies in the Valencia deposit, about the same distance away from the Rossing mine as it is away from Langer Heinrich. An NI 43-101 report verified what Goldcorp had discovered a few decades ago when they had drilled 108 holes into Valencia:
(1) there was a lot of uranium (>20 million lbs)
(2) that it was easy to mine out, being mostly near the surface
(3) unsurprisingly, the mineralization is similar to the Rossing mine and amenable to open-pit mining.

With this in mind, the company initiated a Pre-Feasibility Study in mid-November of 2005. Forsys has drilled 18 holes to date and results have been encouraging. In addition, with $25 million in cash, the company projects to be able to complete the Bankable Feasibility Study without having to raise more capital.

In evaluating a uranium junior, one would want to know who the management is and what they've been doing on the insider market.

Duane Parnham, Chairman & CEO
Ownership: ~ 3 million common shares
Last Insider Activity: April 25, 2006 acquired 15,000 shares @ 2.10

Wayne Isaacs, President
Ownership: ~ 440,000 common shares
Last Insider Activity: October 21, 2005 acquired 10,000 shares @ 1.26

Rick Bonner, Exploration Manager: 25 years with BHP & Diavik
Ownership: ~ 1.7 million common shares
Last Insider Activity: April 27, 2006 sold 10,000 shares @ 2.48

Roger Laine, Director, 15 years experience with COGEMA

Allan Walden, Project Manager: former Namibian mining commissioner

With 45 million outstanding shares, Forsys has reasonable insider ownership. While Forsys does not have a bankable name to fall back on like Urasia has with Ian Telfer or Ur-Energy has with William Boberg, the company has assuredly the right people in place with the right connections to facilitate a smooth transition into eventual uranium production in Namibia.

When one considers that Paladin currently has a market cap of 1.9 billion and Forsys that of 87 million, the upside potential of the latter is made immediately obvious. Of course, Paladin's uranium projects are much more advanced than Forsys', but that difference can mostly be attributed to time, and not fundamentals. Forsys essentially IS Paladin, just at a previous stage. Paladin rushed through their Bankable Feasibility Study in 2 years and is doing their best to fast-forward into uranium production within a year of finishing their BFS. Forsys would be wise and is indeed following that same path as emblazoned by Paladin. Long-term investors should give this company a hard look as it is reasonably priced compared to its more famous uranium junior counterparts like Alberta Star or Western Prospector.

China + Uranium Supplies: An Analysis

2006-05-10T17:42:00.000-07:00

Along with other base and precious metals, China picked uranium to stockpile as part of its five-year plan to make sure the country has adequate natural resources to supply its amazing growth. Indeed, the country is building two new nuclear reactors a year for the next twenty years so uranium oxide should definitely be on China's wish list.

The question for uranium investors, then, is to tease out what China's strategy for uranium might be. Yes, they did sign an accord with Australia, but in order to secure supplies within a relatively short window of five years, they had better hope that Australian legislation changes in a hurry to permit more uranium mines.

In fact, it is unlikely that Australian uranium could totally satisfy China's uranium thirst within the next five years, even with BHP Billiton's (NYSE:BHP) Olympic Dam expansion. China will likely adopt a multi-tiered strategy for uranium as they did with oil, with a mixture of buying companies outright and, for others, JVs.

Thus, for uranium oxide producers like Urasia (CVE:UUU), Denison Mines (TSE:DEN), UEX Corporation (TSE:UEX) and near-producers like Paladin Resources (TSE:PDN), sxr Uranium One (TSE:SXR), this announcement by China can only be interpreted as being positive for their respective companies and their investors.

Uranium Stocks Volatility

2006-05-08T23:01:00.000-07:00

If you check out Canadian uranium stocks lately on PreciousMetalResources, you'll find that many of them are trading with speculative volatility, often jumping up >10% on day while dropping the same amount on another.

For example, these nine uranium stocks today had jumped greater than 10%:

(1) Gravity West Mining Corp (GRW.V) up 24%
(2) Strateco Resources Inc (RSC.V)
(3) Monster Copper Corp (MNS.V)
(4) UGL Enterprises Ltd (UGS.V)
(5) Buck Lake Ventures (BUC.V)
(6) Pele Mountain Resources (GEM.V)
(7) Rodinia Minerals Inc. (RM.V)
(8) IGC Resources Inc. (IGC.V)
(9) Crosshair Exploration (CXX.V) up 10.7%

while these three uranium stocks fell more than 10%:

(1) Marum Resources Inc. (MMU.V)
(2) Strategic Metals Ltd. (SMD.V)
(3) Rare Earth Metals Corp (REM.V)

Before you conclude that uranium stocks in general did well this Monday, consider this caveat: 25 uranium stocks fell greater than 5% while only 18 gained greater than 5%.

What we are seeing right now is a period of extreme volatility in the uranium stock stratosphere. Caution is advised and a great deal of risk tolerance is needed if one wishes to buy uranium stocks at this moment.

Cameco Corporation (NYSE:CCJ TSE:CCO) Q1 Analysis

2006-05-06T22:48:00.000-07:00

I make it a point to read CCJ's Q1 results, because, even though it's not one of my six favorite uranium plays at the moment, it is the dominant company in the uranium sector and its financial results often contain valuable nuggets on both the now and the later of this industry. So without further ado, here is Cameco's publication of their results, with my commentary interspersed between:

Revenue $285 million
Gross profit $97 million
Gross profit 34%
Earnings before taxes $89 million
Average realized price 19.61 ($US/lb)
Sales volume 12.0 million lbs
Production volume 4.3 million lbs

Uranium Results
First Quarter

Compared to the first quarter of 2005, revenue from our uranium business rose by 265% to $285 million due largely to a 179% increase in sales volume. The timing of deliveries of nuclear
products within a calendar year is at the discretion of customers. Therefore our quarterly delivery patterns can vary significantly. An increase in the realized selling price also contributed to the higher revenue, rising by 45% (in US dollars) over the first quarter of 2005. The average realized price in Canadian dollars, however, increased by only 29% due to the strengthening Canadian dollar relative to the US dollar. The increase in the average realized price was the result of higher prices under fixed-price contracts and a higher uranium spot price, which averaged $38.96 (US) per pound in the first quarter of 2006 compared to $21.80 (US) in 2005.

Analysis: Cameco's results are skewed in that they sold almost three times the amount of uranium that they actually produced, thus explaining why their profit was so large compared to the first quarter of 2005. The Canadian dollar continues to be a hindrane to all uranium companies, as it continues to strengthen against the US dollar; it will definitely have a negative impact on company profits.

Our earnings before taxes from the uranium business improved to $89 million from $7 million last year, while the profit margin rose to 34% from 15% in 2005 due to the higher realized selling price.

Uranium Outlook for Second Quarter 2006
Our earnings from the uranium segment are projected to be about half of those in the first quarter of 2006 due to lower sales volumes. We expect deliveries to be about 50% those of the first quarter 2006 due to the timing of customer requirements. The average realized price is expected to be similar.

Uranium Outlook for the Year 2006
In 2006, we expect uranium revenue to be 20% higher than in 2005 due to a projected 18% improvement in the expected realized selling price (in Canadian dollars) and a 2% increase in deliveries. Uranium sales volume is expected to be about 35 million pounds in 2006. Cameco's share of uranium production for 2006 is projected to increase slightly to 21.4 million pounds of U3O8 from 21.2 million in 2005.

Uranium margins are expected to improve to about 30% compared to 23% in 2005.
The second quarter and the 2006 financial results outlook for the uranium business segment is
based on the following key assumptions:
- no significant changes in our estimates for sales volumes, costs, and prices,
- no disruption of supply from our mines or third-party sources, and
- a US/Canadian spot exchange rate of $1.16.

Uranium Price Sensitivity 2006
For the remainder of 2006, a $1.00 (US) per pound change in the uranium spot price from $41.00 (US) per pound would change revenue by about $2 million (Cdn) and net earnings by $1 million (Cdn). This sensitivity is based on an expected effective exchange rate of $1.00 (US) being equivalent to about $1.22 (Cdn), which accounts for our currency hedge program.

Analysis: essentially, Cameco is betting that the uranium price will increase faster than the Canadian dollar strengthen against its American counterpart, buttressing their bet with currency hedging.

Uranium Market Update

Uranium Spot Market

The industry average spot price (TradeTech and UxC) on March 31, 2006 was $40.75 (US) per pound U3O8, up 12% from $36.38 (US) at December 31, 2005. This compares to $22.55 (US) on March 31, 2005 and $20.60 (US) on December 31, 2004.

Total spot market volume reported for the first quarter of 2006 was 5.0 million pounds U3O8. Although lower than the 12.2 million pounds transacted in the first quarter of 2005, prices continued to increase, as supply remains tight.

Industry sources indicate that discretionary purchases, or purchases not for immediate consumption, remained strong accounting for about 50% of first quarter spot volume. This reflects utility purchases, likely for inventory building, and both trader and investment groups taking positions in a moving market.

Analysis: Interesting. One way of interpreting this is that regular buyers are becoming somewhat reluctant to buy are these prices and that much of the demand and subsequent price increase of uranium oxide is driven by investment demand, such as my 5th stock pick Uranium Participation Corporation (U.TO), a company that buys uranium oxide for the sole purpose of storing it and acting as the uranium equivalent of CEF.

Uranium Long-Term Market
The industry average long-term price (TradeTech and UxC) on March 31, 2006 was $41.50 (US) per pound U3O8, up 15% from $36.13 (US) at the end of December 2005. This compares to $27.25 (US) on March 31, 2005 and $25.00 (US) on December 31, 2004. The long-term market continued to be active in the first quarter as utilities attempted to mitigate the risk of potential future supply shortfalls by securing long-term contracts with reliable primary suppliers. Currently, we estimate that more than 200 million pounds will be contracted in the long-term market for 2006 compared to 240 million pounds in 2005 and a five-year annual average of 80 million pounds. The trend for long-term contracting is well above historical levels and may decline from the 2005 level.

Cameco Corporation NYSE:CCJ TSE:CCO Q1 Results

2006-04-30T21:29:00.000-07:00

Cameco posted net earnings for the first quarter of C$117.0 million or C$0.32 per share, up from C$26.0 million or C$0.07 per share in the same period of last year. Earnings from operations for the quarter grew to C$143 million from C$15.0 million in the corresponding period of previous year. The company attributed the rise in earnings to improved results in the uranium business.

Cameco reported first quarter revenue of C$542 million compared to C$216 million in the comparable period of prior year. Revenues from uranium were C$285 million, up from C$78 million, while from fuel services grew to C$44 million from C$26 million in the year-ago period.

Revenues from Bruce Power Limited Partnership fell to C$334 million from C$411 million, while from gold declined to C$107 million from C$113 million in the corresponding period of last year.

Looking ahead, the company expects second quarter-consolidated earnings to be lower than that of the first quarter. Further, Cameco sees fiscal year 2006 earnings to be marginally less than fiscal year 2005 earnings, while revenues to grow by 50% from last year.

Analysis: Cameco surprised me slightly with their stronger-than-expected Q1 performance but the lower guidance for Q2 should temper the enthusiasm. What was not surprising was the driver for Cameco's improvement, that being uranium. Although a large proportion are hedged, enough of Cameco's contracts could take advantage of the overall price increase of uranium oxide to raise the overall profit. Which of course, makes Urasia's (CVE:UUU) next quarterly report all the more important as a benchmark, as that company is fully unhedged. Still, Cameco, being the behemoth of the uranium industry, is expected to give all uranium juniors a spark with these earning results when the markets reopen tomorrow.

Uranium Stocks Tool

2006-04-28T17:22:00.000-07:00

Website: http://www.preciousmetalresources.com

This is the very best website to keep track of all uranium companies (of course, I am biased since I helped to bring it to fruition!) It has the latest news for each uranium company as well as hourly updates of their stocks as they trade on the markets.

I had noticed that it was becaming very difficult to keep track of all the existing uranium companies, let alone all the new ones that are popping up every day. Look for www.preciousmetalresources.com to expand even further in the near future. We have surprises for everybody!

Revisiting Past Uranium Picks

2006-04-26T19:42:00.000-07:00

Well, my uranium mining stocks blog has hit the 3 month mark! A big thank you for all of you who have given your input and helped to fuel my passion for writing about uranium stocks! I still have the same enthusiasm now as I did at the end of January and will continue to write as long as there is a thirst from uranium readers worldwide.

At this point I thought I'd give everyone a quarterly report on my uranium picks. Now unlike other sites, I'm not going to quote exact numbers. That's really not my style. Suffice to say, all my picks went up, some significantly, some less so, save one..

International Uranium Corporation (IUC.TO) has seen its stock stagnate, but then if one actually read my original article on IUC, would discover that I had urged caution on this stock until they had actually announced reopening of their American mines. To this day they haven't and I am frankly skeptical about the reason why.

Paladin Resources (PDN.TO), sxr Uranium One (SXR.TO), Uranium Participation Corporation (UPC.TO), and Ur-Energy (URE.TO) have all performed very well.

Urasia (UUU.V) has also gained, modestly well, but I wanted to highlight this stock for a particular reason. Urasia will be the bellweather stock for all other uranium juniors in the months to come. If you remember, Urasia announced a $5.5 million loss for the three months of November, December and January. The next quarterly report for the months of February, March, and April should be out sometime near the end of June, will be critical. The reasoning is that these three months will see Urasia sell uranium at fully unhedged prices, aka prices determined by the current uranium oxide charts. Urasia is probably the first company to jump from non-producing uranium junior to uranium producing powerhouse and its success or lack thereof on the bottom line will determine in a big way the way investors feel about the future viability of many other uranium companies.

Below are the links to all six of my uranium picks made this quarter. Feel free to read my original articles!

Uranium Penny Stocks

2006-04-24T22:29:00.000-07:00

Here are some uranium companies who can be considered penny stocks in terms of their market valuations. As always with penny stocks however, make sure you do full due diligence first! Sometimes there are reasons why these penny stocks!

Benton Resources (BTC.V)
Buck Lake Ventures (BUC.V)
Consolidated Pacific Bay (CBP.V)
El Nino Ventures Inc. (ELN.V)
Garnet Point (GRV.V)
Glen Hawk Minerals (GHM.V)
Global Uranium (GU.V)
Gravity West Mining Corp. (GRW.V)
IGC Resources Inc. (IGC.V)
MAX Resource Corp. (MXR.V)
Monster Copper Corporation (MNS.V)
New Shoshoni Ventures (NSV.V)
Rare Earth Metals Corp. (REM.V)
Sea Green Capital Corp. (SGS.V)
ValGold Resources Ltd. (VAL.V)
Waseco Resources Inc. (WRI.V)

Canadian Uranium Stock Market Caps (April 23)

2006-04-23T17:52:00.000-07:00

Alberta Star Development (ASX.V)
$193,043,962.80

Aldershot Resources Ltd. (ALZ.V)
$13,198,819.30

Altius Minerals Corp. (ALS.V)
$171,116,569.75

Aurora Energy Resources (TSE:AXU)
$282,655,416

Azimut Exploration Inc. (AZM.V)
$27,180,891.92

Bayswater Ventures (BVE.V)
$23,641,000.96

Benton Resources Corp. (BTC.V)
$7,382,964.60

Brilliant Mining Corp. (BMC.V)
$19,681,431.44

Buck Lake Ventures Ltd. (BUC.V)
$1,525,440.22

CAMECO (CCO.TO)
$16,598,273,506.08

CanAlaska Ventures Limited (CVV.V)
$40,956,177.90

Cash Minerals Ltd (CVE:CHX)
$38,528,628.39

Commander Resources Ltd. (CMD.V)
$15,071,932.78

Consolidated Abaddon Resources Inc. (ABN.V)
$20,545,038.00

Consolidated Pacific Bay (CBP)
$8,175,675.20

Continental Precious Minerals Ltd. (CZQ.V)
$23,555,479.90

Crescent Resources Corp. (CRC.V)
$12,433,908.46

Crosshair Exploration (CXX.V)
$84,975,401.79

Dejour Enterprises (DJE.V)
$85,513,289.76

Denison Mines Inc. (DEN.TO)
$491,632,223.52

East Asia Minerals Corp. (EAS.V)
$33,295,809.60

East West Resources (CVE:EWR)
$15,478,308.16

El Nino Ventures Inc. (ELN.V)
$5,435,966.97

Eloro Resources Ltd. (ELO.V)
$19,446,129.28

Energy Metals Corp (EMC.V)
$194,478,642.24

Equinox Resources Ltd. (EQN.TO)
$651,391,445.76

Erdene Gold Inc. (ERD.TO)
$30,449,635.00

ESO Uranium Corp. (ESO.V)
$38,127,457.20

Firestone Ventures Inc. (FV.V)
$15,142,519.22

Formation Capital (TSE:FCO)
$65,032,807.20

Fortress Minerals Corp. (FST.V)
$100,464,750.75

Forum Development Corp. (FDC.V)
$17,025,090.36

Fronteer Development Group Inc. (FRG.TO)
$371,365,746.40

Full Metal Minerals Ltd. (FMM.V)
$67,847,169.60

Garnet Point (CVE:GRC)
$5,031,528.95

Glen Hawk Minerals (CVE:GHM)
$2,733,840.04

Global Uranium (CVE:GU)
$8,970,900.00

Globex Mining (TSE:GMX)
$73,620,314.40

Golden Valley Mines Ltd. (GZZ.V)
$17,741,723.02

Gravity West Mining Corp. (GRW.V)
$2,869,756.23

Great Western Mining (CVE:GWG)
$25,702,622.53

Hathor Exploration Ltd. (HAT.V)
$21,744,205.30

High Plains Uranium, Inc. (HPU.TO)
$41,717,636.87

Hornby Bay Exploration Ltd (HBE.V)
$50,841,342.72

IGC Resources Inc. (IGC.V)
$9,447,849.60

International KRL (CVE:IRK)
$19,120,173.02

International Uranium Coporation (IUC.TO)
$552,619,162.50

JNR Resources Inc. (JNN.V)
$100,118,558.60

Kilgore Minerals Ltd. (KAU.V)
$15,955,290.50

Laramide Resources Ltd. (LAM.V)
$358,816,923.50

Lateegra Gold (CVE:LRG)
$13,860,574.00

Logan Resources Ltd. (LGR.V)
$14,747,504.10

Magnum Uranium Corp. (MM.V)
$19,232,937.65

Mawson Resources Ltd. (MAW.V)
$29,753,928.40

MAX Resource Corp. (MXR.V)
$6,471,232.30

Mega Uranium, Inc. (MGA.V)
$394,028,756.60

Mesa Uranium Inc. (MZU.V)
$14,106,417.78

Mexivada Mining Corp. (MNV.V)
$12,523,266.00

Monster Copper Corporation (MNS.V)
$9,771,455.60

New Shoshoni Ventures (CVE:NSV)
$4,585,765.50

North American Gem Inc. (NAG.V)
$10,585,421.86

Northern Canadian (CVE:NCA)
$10,829,990.34

Northern Continental Resources Inc. (NCR.V)
$15,433,756.80

Northwestern Mineral Ventures Inc. (NWT.V)
$72,976,581.00

Nova Uranium Corp. (NUC.V)
$58,711,141.50

Nuinsco Resources (TSE:NWI)
$26,960,490.06

Paladin Resources Ltd (PDN.TO)
$1,977,071,422.85

Pan African Mining Corp. (PAF.V)
$34,719,153.50

Pathfinder Resources Ltd. (PHR.V)
$20,541,368.25

Pele Mountain Resources Inc. (GEM.V)
$18,864,797.40

Pioneer Metals Corp. (PSM.TO)
$27,029,644.20

Pitchstone Exploration Ltd (PXP.TO)
$46,128,756.80

Purepoint Uranium Group Inc. (PTU.V)
$20,883,222.48

Quattera Resources (QTA.V)
$105,371,168.00

Quincy Energy (CVE:QUI)
$76,359,551.40

Rampart Ventures Ltd. (RPT.V)
$15,532,193.70

Rare Earth Metals Corp. (REM.V)
$5,751,482.69

Red Dragon Resources Corp. (DRA.V)
$29,470,995.40

Rodinia Minerals Inc. (RM.V)
$13,832,536.80

Santoy Resources Ltd. (SAN.V)
$52,783,886.50

Sea Green Capital Corp. (SGS.V)
$4,796,321.00

Signet Minerals Inc. (SGN.V)
$16,196,154.24

Silver Spruce (CVE:SSE)
$6,385,332.58

Solex Resources Corp. (SOX.V)
$20,805,243.82

Solitaire Minerals Corp. (SLT.V)
$17,839,236.45

Starfire Minerals Inc. (SFR.V)
$11,539,374.66

Strateco Resources Corp. (RSC.V)
$72,126,842.82

Strategic Metals Ltd. (SMD.V)
$22,362,673.20

Strathmore Minerals Corp. (STM.V)
$150,688,708.05

Strongbow Exploration Inc. (SBW.V)
$34,240,255.84

sxr Uranium One Inc (SXR.TO)
$1,170,301,585.24

Thelon Ventures Ltd. (THV.V)
$12,707,511.16

Titan Uranium Exploration (TUE.V)
$63,059,530.40

Tournigan Gold Corporation (TVC.V)
$186,940,831.20

Triex Minerals Corporation (TXM.V)
$31,349,240.00

Twenty-Seven Capital Corp. (TSC.V)
$10,183,418.08

UEX Corp. (UEX.TO)
$801,526,336.05

UGL Enterprises Ltd. (UGS.V)
$41,790,572.80

United Carina Resources Corp. (UCA.V)
$11,054,682.94

Universal Uranium Ltd. (UUL.V)
$17,436,384.42

Uranium City Resources Inc (UCR.V)
$11,843,434.71

Uranium Participation Cooperation (U.TO)
$278,607,004.50

Uranium Power Corp. (UPC.V)
$50,671,756.56

Urasia Energy Ltd. (UUU.V)
$1,616,290,160.03

Uravan Minerals Inc. (UVN.V)
$28,680,142.50

Ur-Energy Inc. (URE.TO)
$122,230,180.80

ValGold Resources Ltd. (VAL.V)
$7,956,298.35

Vena Resources Inc. (VEM.V)
$41,842,927.35

Waseco Resources Inc. (WRI.V)
$5,063,477.13

Wescan Goldfields Inc. (WGF.V)
$33,989,244.10

Western Prospector Group Ltd. (WNP.V)
$174,442,322.60

April Uranium News

2006-04-19T23:50:00.000-07:00

(1) Japanese power companies are actively seeking new uranium sources, signing JV agreements with uranium companies around the world. Japan wants to cut down on its oil reliance and nuclear power seems to be the way to go for them. If you remember, two Japanese companies are invested in Cameco Corporation's (NYSE:CCJ TSE:CCO) Cigar Lake mine.

(2) Queensland, one of the Australian districts, is politically divided over allowing uranium mining. Its current premier wants to defer debate for a year, which could definitely affect Australian uranium juniors with interests in that region.

(3) Bayswater Ventures Corp. (TSX VENTURE:BVE) and Pathfinder Resources Ltd. (TSX VENTURE:PHR) are merging to form a bigger uranium junior, with uranium properties in both Canada and Nigeria. This is probably a sign of things to come as the sheer number of uranium juniors will create impetus to merge and form bigger uranium juniors.

6th Uranium Stocks Pick: Ur-Energy (TSE:URE)

2006-04-16T07:15:00.000-07:00

Ur-Energy (TSE:URE) is a company focused in on North American uranium. If you haven't noticed already, I traditionally like companies with uranium properties elsewhere: sxr Uranium (TSE:SXR) in Australia and South Africa, Paladin Resources (TSE:PDN) in Namibia and Urasia Energy (CVE:UUU) in Kazakhstan. North American uranium plays generally have a much longer permitting process and therefore, will not produce yellowcake anytime soon (not to mention that there are hundreds of uranium juniors all vying to use the same drill rigs!)

However, there are reasons to be interested in Ur-Energy:

Uranium Claims

While Ur-Energy has stakes in Northern Canada, the ones of main interest are in Wyoming. The uranium company's main priority are the Great Divide Basin Projects comprised of the Lost Creek, Lost Soldier, Radon Springs and North Hadsell properties. Other uranium claims include URE's Shirley Basin Project comprised of the Bootheel, Buck Point and Chalk Hills and the Kaycee and Shamrock Project. Just a few days ago, Ur-Energy and Energy Metals Corporation (TSE:EMC) traded several Wyoming properties between them in an effort to consolidate and become more efficient: Ur-Energy gave up Chalk Hills and Shamrock in exchange for consolidation of the Bootheel project.

Of the Great Divide Basin Projects, Lost Creek and Lost Soldier are the ones of most interest because they are in the process of being verified to industry NI 43-101 standards. Historical estimates of 13 million lbs and 26 million lbs respectively should actually be taken seriously, as these estimates were provided by Conoco and Cameco through actual drilling. Ur-Energy claims another 45 million lbs of historical uranium resources distributed amongst its other Wyoming properties (34 million in Radon Springs) but these are not as accurate and should be taken with several grains of your proverbial uranium salt.

Production at Lost Soldier is optimistcally set to begin in mid-2008. Of the 26 million lbs of uranium in Lost Soldier, half are indicated and half are inferred. A look at their proposed timeline indicates that several key events must take place for 2008 production to happen: good resources studies, environmental studies + permitting, engineering, financing, and then construction of the actual in-situ leaching ISL wellfield. In addition, Ur-Energy must establish a satellite plant to expedite the ISL operation, and to tie the plant in with an existing uranium-producing company's NRC license, most likely with Power Resources (Cameco-owned).

Lost Creek has much the same elements for their timeline, but is not scheduled to begin production until 2009.

Uranium Environment

Fortunately for Ur-Energy, Wyoming is a very uranium-friendly environment. The state already has ISL plants and knows the technology well so Ur-Energy is not expected to run into opposition here.

The People

With any investment in an uranium junior, experience with uranium is of paramount importance. Ur-Energy prides itself on having 18 geologists with 340 combined years of uranium experience between them. URE is currently headed by William Boberg, who has a wealth of experience in uranium exploring in Wyoming. This is an acting CEO who is also their senior geologist with 25 publications under his belt, a guy who has actually written articles entitled "Exploration for Uranium in Wyoming."

Quick Facts

Shares Outstanding = 49 million
Fully Dilated = 65 million
Cash on Hand = $11 million
Cash from Warrants = $10.7 million

Insider Activity

William Boberg: Director + CEO = 400,000 common shares, no activity
Jeffrey Klenda: Chairman + Director = 700,000 common shares, no activity
Eric Cragie: Senior VP Exploration + Director = 350,000 common shares, no activity
Paul Pitman: VP Canadian Exploration = 500,000 common shares, no activity
James Franklin: Chief Scientist + Director = 250,000 common shares, no activity
Paul Macdonell: Director = 150,000 common shares, no activity
John McNeice: CFO = 250,000 common shares, no activity

Final Thoughts

With a $100 million Cdn market cap, Ur-Energy is not cheap, but not overly expensive either. They are still at least two years away from uranium oxide production, and that's in the most optimistic light. Still, they have all the right elements to become one of those few succesful uranium juniors to separate themselves from the pretenders.

For that reason, Ur-Energy becomes my 6th uranium stock pick.