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« Uranium Participation: Bucking The Sector Trend | Main | Lost Principles »
Sunday
Nov302008

Uranium-Stocks: Portfolio Update 01 December 2008






(Chart from u308.biz)

The uranium spot price stands at $55/lb according to UXC and TradeTech with the long-term price of uranium trading at $70/lb.

The long term factors behind uranium and nuclear power appear to have been completely disregarded over the past year or so, with the relentless dumping of uranium stocks and, more recently, the commodity itself with drops now being seen in the long term price.

However our intention remains to stay put as the damage has already been done to our uranium holdings, and we are holding our positions at heavy losses until such time that the uranium industry turns around, although we acknowledge this could be some time away.

Here follows our portfolio update as of 1st December 2008:

Cameco Corporation – Watch
This uranium heavyweight closed down at $17.23 on Friday, having taken a real battering in both the mainstream market sell off and the water problems at Cigar Lake. We currently have no position and are not buyers at this point.

RPT Uranium Corporation – Hold.
We bought RPT on the 19th February 2007 for $0.42 and sold it for $0.62 on the 13th June 2007 for a profit of 47.6% in 4 months. We then bought it back at around 50 cents, however RPT closed yesterday at $0.085

Uranium Participation Limited – Hold
Not much change in this stock since our last portfolio update, now trading at $7.39 as opposed to $7.74. We bought at $11.97 on 21 November 2006 so we well and truly in the red with this trade, however the position is a better condition than many other uranium stocks.

Strateco Resources Incorporated – Hold
We made a small investment in RSC at $2.30 but it crashed to $1.70 at our last update, before falling further to close Friday at $0.48, another major disappointment.

Crosshair Exploration and Mining Corporation Watch
We continue to watch CXX, however at $0.11 it has been completely pummelled and in fact, the stocks deterioration began before other uranium stocks, and before the uranium price starting to drop. Therefore we remain firmly on the sidelines with this one.


Laramide Resources Limited – Buy
We bought at $5.78 on the 28 July 2006 so again we are still in the red with this one, since it closed at 97 cents on Friday. When we were sitting on a paper profit of around 80% we sold half of our position in order to buy other uranium stocks, as we needed a bigger spread of stocks at the time.

Mega Uranium Limited – Buy
We bought MEGA at around $4.0 on 27 July 2006. MGA was trading at $0.72 yesterday. It appears that despite the positive news coming in from down under regarding uranium mining, the stock is continuing to slide, so buying this one is very much a speculation.

Khan Resources Ltd - Hold
We bought Khan on the 5th March at $3.63 and it has since dropped to lower levels due to licensing issues with the Mongolian regulators. So, in anticipation of Khans management team finding a resolution to this problem we decided to buy again. (See Khan Resources: A speculative buy) the stock rallied and we took a profit of 15% in a matter of days before the stock fell back again. Khan is still having a torrid time trading closing yesterday at $0.165. We would not make a small investment in this company but would seriously consider taking it over if we had the firepower available, since the company is extremely undervalued.

Aurora Energy Resources - Hold
We bought Aurora on the 5th March 2007 at $14.17 and it is now trading at $1.21, a total hammering for our position. This is due the sell off in the sector, as well as licensing issues in the central mineral belt.

Strathmore Mineral Corporation - Hold
We bought STM on the 14th April 2007 at $4.96 and it is currently trading at $0.24, which is a very disappointing performance indeed.

Ur-Energy - Hold
We bought Ur-Energy on the 23rd April 2007 at $4.75 and we also bought again on the 24th August 2007 when we acquired more stock at $3.03. We had hoped to have bottomed on this one, but it was not to be and it closed yesterday at $0.70, however it has made a recovery from trading for under 40 cents recently.

Denison Mines Corporation – Watch
We don’t own Denison (DML on the TSE) despite trying to buy it when times were better. However on 28 July 2008 we purchased the JAN09 Call Options of Denison Mines Corporation at a strike price of $7.50 for $1.10 per contract and they unfortunately closed yesterday at $0.05, so we’re dead in the water on this one.

Other than sit tight through these torrid times, there is little we can do right now. This situation may remain with us for some time, so we will just have to hold on until the argument for nuclear power begins to take centre stage again and gives the uranium price a boost.

One ray of hope on the horizon is that when the recession fully hit home, governments around the world will be looking to increase public spending to boost the economy and create jobs. Nuclear power could figure in this spending, especially since it is a logical step to be making anyway.

If you have any comments or suggestions then please feel free to add them to this article whether you agree with us or not.


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Reader Comments (5)

Hey there folks...I just hafe to say that I appreciate your honesty in declaring your holdings (results). Very often, in fact the NORM is for newswriters to talk of their high-fliers and the POSITIVE Gains...but never to tell it LIKE TI IS. You do that...so good on 'ya !!!!

December 1, 2008 | Unregistered CommenterRon L

I agree with Ron. Respect.

Next to that, you guys are well under.
Can any of you tell me what the forecast is for Uranium prices in the near to mid-term future?

I'm very fond of Denison Mines Corp. Its my first pick so far. Anyone care to share his best pick?

still investigatin'

brgds,

December 4, 2008 | Unregistered Commenterde Graaf

Well not my "best pick"...because it is in the TANK !!

But the pick that I did do...is UF.UN.TO....and I picked that because it is a conglomerate...a basket of MANY corporations..and I was banking on minimizing the exposure of the "singles"...Cameco with their flood...xyx whatever with their financial package etc etc.

Well, hasn't turned out..OK...because, as most will agree, this sector is not favoured now....and indeed WHAT sector is...in this world of turmoil in the markets?

December 4, 2008 | Unregistered CommenterRon L.

Reconsider Ron...reconsider.

What we are being offered right now, is the uppermost BEST opportunity to get rich, as we can't get any more poor than this.

So every monthly salary is going to the commodities sector.
Lets get rich Ron. How about that!

;)

December 4, 2008 | Unregistered Commenterde Graaf

Uranium stocks make up the majority of my holdings.
And indeed 2008 has been a real disaster.Nonetheless I keep holding on to DNN , URE.TO , PDN.TO and FCO.TO and am conviced that spreading within this sector is essential , but that the returns will in the end be worth it.

January 1, 2009 | Unregistered CommenterBart Goossens

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