Uranium stocks are becoming collateral damage in the sell-off in oil over the last couple of months. Since mid-July, oil is down around 20% from $102 per barrel to $83 as of October 201. This has also become a problem for many uranium stocks. Uranium Energy Corp. is down around 27% in the three months ending October 20,2 Fission Uranium Corp. has lost over 30%,3 and big uranium producer Cameco Corp. is off 20% in the same time frame.
The fundamentals for the precious metals are weak. This has been highlighted in recent weeks by the lack of a major rally in gold and the losses in silver despite a spike in volatility to its highest since 2011. Improving economic data, the tapering of QE, and discussion of when the first rate hike will be have resulted in heavy losses over the past two years in the precious metals, and are to blame for the poor performance in the recent risk off market conditions stemming from the Ebola fears.
These overwhelmingly bearish fundamentals are the reason that we have taken short positions on the precious metals sector and why we intend to continue to do so. However, while both gold and silver offer attractive levels for new shorts, which metal holds the better risk reward dynamics in the current market situation? To answer this we must consider how each metal behaves and performs during both risk off and on conditions, as well as their current technical situations.
By Justin Rowlatt BBC News
Uranium is the most divisive of elements.
When Otto Hahn first discovered in 1938 the astonishing amounts of energy that could be released by splitting a single uranium atom, he opened the way to a potentially unlimited source of electricity, but also to the atomic bomb.
Today, the element's potential poses a new conundrum, one that has split environmentalists right down the middle.
NEW DELHI: Russia tonight welcomed NDA government's decision to increase the number of nuclear power plants saying it is the only way to solve India's energy crisis.
"The Indian govt is talking about 22-24 nuclear power units,
It looks like the late 90’s are back in vogue in the mining industry.
Steve Todoruk, a mining veteran who joined Rick Rule in 2003 at Sprott Global Resource Investments Ltd. says he’s seeing some key similarities between today and the last big bear market for resource stocks, which lasted from around 1998 to 2001.
Jeff Desjardins is the founder of Tickerscores.com. When Rick Rule said he expected lots of companies to ‘give up’ or ‘de-list’ before this bear market was over – Jeff took note. But where are the reports of companies leaving the resource sector? In this piece, Jeff takes a deeper dive…
By Jeff Desjardins, Tickerscores.com
Many commentators had predicted that mediocre junior exploration companies would de-list or die off this summer.
“I plan on using this recording a few years from now as marketing material,” said Rick, speakingto current clients and friends of Sprott Global Resource Investments Ltd., the firm he founded in 1994. “What I’m going to talk about today I think will seem like a prescient market call three or four years from now.”
His recent update was about putting the ‘carnage’ and heavy damage to people’s natural resources portfolio over the last two years, and acutely in the last couple of weeks, in perspective.
“It’s times like these that you’ll look back on as the ‘good old days,’” Rick suggests. “In 2017 or 2018, I believe we will think of 2014 as the days when you could buy companies with the most compelling projects and management teams at 75 percent discounts from their previous highs. ‘Back then, we could see a company fall 30 percent after they refused to take money from us in a private placement, and we could buy the stock at even more attractive terms,’ we’ll say.
“We have all had the experience of seeing goods on sale and procrastinating, and later on seeing them priced much higher. You think to yourself ‘I really wish I’d participated.’ Those are the kinds of times that get referred to as ‘the good old days.’”
Right now, it feels like we couldn’t be done with good old days soon enough. As Rick puts it, “You are either a contrarian or a victim, I’ve often said. Sometimes, it’s possible to be both.” Right now certainly feels like one of those times.
That’s no reason to give up on your contrarian investments, according to Rick. If you were correct in your initial assessment, and the goods you bought were indeed ‘on sale,’ then the right thing to do is to hang on.
As Rick explains, this is what made his fortune during the last period of ‘good old days’ for the resource sector – the profound bear market of the 1998 to 2001 period. He checked his reasoning for investing in the companies he owned, and decided he’d made the right choice.
Rick tells the story: “Companies in the resource sector were in a once-in-a-decade sale at the end of the 90’s. There was one commodity in particular, uranium, which had been in a 20-year bear market. The price had gone from 32 dollars to 8 dollars a pound. Not only did people lose money, but, to make things worse, it was a despised material. It was perceived as having cost people their lives at Hiroshima, Nagasaki, or Three Mile Island. The commodity had underperformed so bad that the margins on producing it were now negative.
“There was one Australian company at the time, called Paladin, which owned a uranium mine. The bear market for resources was even more severe in Australia than it was in Canada.
“In 1998, I realized that uranium was a spectacular contrarian investment. Nuclear power made up 16% of the world’s energy. As long as the Western world continued to want to have electricity, the price would have to go up, or the lights would go out. I had decided that Paladin was a highly speculative bet on that outcome.
“I financed them at 10 cents, and the stock rose a little. I financed them again at 12 cents. Then, things got ugly.
President Evo Morales said Thursday that Bolivia will launch its civilian nuclear energy program this year, a project that will include the construction of plants in the western province of La Paz and an investment outlay of more than $2 billion through 2025.