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« Aurora Energy Resources Incorporated: Up 10.67% today! | Main | Laramide strikes gold at Westmoreland. »
Monday
Jun232008

Uranium-stocks: Portfolio Update 23 June 2008

Uranium Chart 23 June 2008


This chart is courtesy of www.U308.biz.

A month ago it looked promising as there were signs of a small rally forming however this appears to have dissipated as investors used the higher prices to cut their loses and return their cash to the sidelines. We had hoped to bring you more ‘buy’ signals but have decided to remain cautious until a clearer picture emerges.


Cameco Corporation – Watch
Cameco was trading at $42.48 when we last updated the portfolio and closed at $37.90 on Friday, not so good progress by this sectors heavyweight, however it is holding up better than most uranium stocks.


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 still like this stock and so bought it back at around 50 cents, however RPT has traded as low as $0.15 over recent months and just when we are beginning to despair it puts in a terrific run to double in just over a month and closed on Friday at $0.34. However, looking at the chart the RSI suggests that it is now overbought so expect a breather.

RPT Chart 22 June 2008

Uranium Participation Limited – Hold
U was trading at C$9.60 last month but as of yesterday it was trading at $9.05. We bought at $11.97 on 21 November 2006 so U is still showing a paper loss but we will continue to hold, as it offers direct exposure to uranium without the risks inherent in mining.

Strateco Resources Incorporated – Hold
We made a small investment in RSC at $2.30 and it has traded as high as $2.87, however it closed at $2.15 yesterday, a slight improvement on last month. The news flow has been good so we will continue to hold this stock in expectation that it will do well as this market sector regains its popularity with investors.

Crosshair Exploration and Mining Corporation Watch
We continue to watch CXX. The stock was trading at about $0.82 last month and has seen some dramatic moves in both directions; it closed yesterday at $0.76. We had hoped that CXX had found some support at $1.00 but that soon dissipated. The news flow has been good and frequent so this rapid deterioration remains as a puzzle to us. Although we do not own this stock it remains tempting at these price levels and we may be looking at a gift horse in the mouth. We do need to see some signs of improvement before investing Crosshair.

Laramide Resources Limited – Buy
This stock was trading for about $4.67 at the time of the last update it and closed yesterday at $3.85. We bought at $5.78 on the 28 July 2006 so we are still in the red with this one. 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. In the last update we said that Laramide might have formed a bottom at $3.00 so hopefully we can look forward to better things from this stock, when the market in general improves.

Mega Uranium Limited – Buy
We bought MEGA at around $4.0 on 27 July 2006. MGA was trading at $2.36 last month but has since dropped back to close at $2.10 yesterday, having traded as low as $1.79 recently. Hopefully Mega has found some support at $2.00, and can go on from here to higher ground.

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 having a torrid time trading as low as $0.79 before closing yesterday at $0.87. Here is an interesting news bite that we spotted the other day:

ALMATY, KAZAKHSTAN, June 19 /CNW/ - JSC Compass Asset Management
("Compass") announces that, through investment funds that it manages, it has acquired control of an aggregate of 5,669,100 common shares of Khan Resources Inc. ("Khan Resources"), representing approximately 10.47% of the presently issued and outstanding common shares of Khan Resources. The common shares were acquired in multiple trades through the facilities of the Toronto Stock Exchange. Compass acquired control of the common shares through its managed funds for investment purposes and may, depending on market and other
conditions, increase or decrease the number of common shares over which it exercises control through future purchases and sales. Khan Resources is listed
on the Toronto Stock Exchange under the symbol "KRI".


About Compass

Compass is one of Kazakhstan's leading asset management / hedge fund companies and is located at 240v Furmanova Street, Almaty Kazakhstan, 050059.


We have yet to decide just what this means so we will keep an eye on it for now.





Aurora Energy Resources - Hold
We bought Aurora on the 5th March 2007 at $14.17 and it is now trading at $3.62, having traded as low as $3.33. Aurora has implemented an outreach programme in an attempt to convey the benefits of their planned mining activities to the community. A resolution to the issues surrounding the granting of a mining license is desperately critical to their activities in the Central Mineral Belt, so lets hope that they are successful.


Strathmore Mineral Corporation - Hold
We bought STM on the 14th April 2007 at $4.96 and it is currently trading at $1.51, having been as low as $1.40, which is a very disappointing performance indeed. STM’s mini rally petered out as investors sold into what was a small rally.

Ur-Energy - Hold
We bought Ur-Energy on the 23rd April 2007 at $4.75 and we also gave a second buy signal on the 24th August 2007 when we acquired more stock at $3.03. In the last update we asked is this was the low for URE as it was down to $1.78, well it could have been as this stock moved up to $2.15, however this surge was also short-lived as it closed yesterday at $1.95.

Denison Mines Corporation – Watch
We don’t own Denison (DML on the TSE) despite trying to buy it when times were better. Recently this stock put in a run to break the $9.00 level only to fall back again to $6.85, before rallying again to close at $8.59 last month. Yesterday Denison closed at $7.44, another uranium stock struggling to find some traction.

The longer-term price remains strong although lower at $90/lb but the spot price continues to drift lower as TradeTech reports the uranium spot price trading at $59/lb and UX Consulting Company has it at $57/lb.

We hope that the importance of the spot price diminishes and the focus of attention becomes the long-term price, as this is where the lion’s share of the trade in uranium is conducted.

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 (3)

One news report stated that the Province of Saskatchewan (Canada) has authorized two new nuclear power stations.

Less pleasant for us long-suffering shareholders in uranium explorers and producers: France's A2 (Antenne 2) TV news stated today that Germany (long ago, I believe) opted to avoid nuclear power generation and is building new coal-powered electricity generators full tilt. The nuclear-powered stations they currently have will be phased out. Germany turns out to be a far worse per-capita carbon-emitter than France. The only heartening element to the report was that local populations in Germany are beginning to complain about the atmosperic pollution both on the local level and as regards the carbon contribution to global warming. But the hope that these protests could ever lead to a pro-nuclear switch is tenuous, at best.

June 24, 2008 | Unregistered CommenterNeil Bishop

Hi Guys,

Our labour party here in Australia are a bunch of tools, but there are some ministers within it, and in the correct places (Martin Ferguson our Minerals Minister) to effect change in Australia's overall Nuclear Industry. This is worth a read....

http://www.theaustralian.news.com.au/story/0,25197,23929647-601,00.html

Cheers
U308 Convert and hurting like you with the Juniors.

June 26, 2008 | Unregistered CommenterJohn Negrepontis

Hi John,

Interesting stuff and thanks for bothering to write to us. The uranium space is a bit of a lonely one at the moment with a lot of investors keeping an eye on the other precious metals. No doubt that uranium will move when we least expect it and catch a few of us by surprise.

June 26, 2008 | Unregistered CommenterUranium Stocks

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