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« Cameco Corporation Options Trade Update | Main | Alberta Tar Sands and Nuclear Power »
Wednesday
Jun102009

Uranium One Incorporated Dynastic Complications

UUU Chart 11 jun 09.JPG

Chart courtesy of Stockcharts


Uranium One Incorporated (UUU) is trying to come out from under a cloud that reads like a script for a day time TV soap opera with allegations of behind the scenes corruption and a dynastic approach to leadership.

The arrest of the former head of the nuclear state company who is being charged for selling vast amounts of the states assets for a nominal sum and pocketing the proceeds has led to various investigations being instigated. The question is did Uranium One buy some of these properties illegally or not, which brings us to the debate on Stars and Dogs featured on the business television programme BNN today.

Angela Wiebeck, executive director - Head of KeyClient Group, UBS was asked to judge the situation as to whether she would be a bull or a bear on UUU. Now we are in Kazakhstan where the 24 year old grandson of the President is head of one of the countries biggest banks and his three daughters are in charge of the media, energy and construction sectors.

Well the political situation was just too much for Angela Wiebeck who came out as bearish on this one.

Just click here to catch the nine minute clip.

Also take into account that this country has been under Russian rule for three generations and now has to adjust to a western style of capitalism.

UUU has started to recover as we can see from the above chart but the political uncertainty remains so expect a few more gyrations in the stock price before this one settles down.

We did mention when this story broke that it could be worth a punt on 27th May 2009 when we wrote “If all is well this could be a wonderful buying opportunity for those who are quick and have all the facts before them” if you took such a punt please write and let us why you thought UUU was a reasonable investment at the time and if you have an exit strategy just how you intend to play this one.


Have a good one.

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Reader Comments (3)

Hey, came across your article, and am responding to your request. I bought into UUU at the begininng of June. I had a couple different trains of thought, it basically all boiled down to this:

1) All deals were approved by Kazakh gov't

2) Kazakh gov't hopes to become the world's leading uranium producer by 2012.....they'd be lucky if they are in the top 20 by 2015 if they go around nationalizing foreign assets.

3) Everything I read, combined with my gut feeling, is that this is an internal power play, designed to get rid of the ex-head of KazAtomProm, who recently fell out of favour when his good friend, the ex-head of the Kazakh National bank, took off for Austria (I believe) with a whole lot of money, adn then wrote a book criticizing the President of Kazakh.

4) Even if we assume a worst case scenario, and they lose the 30% stake of the mine in question....they lost over $1 billion in market value when this story broke....even if they lost that ine, should that account for over $1 billion? I don't think so.

That was my original thinking....since then, I came across an interesting article from a European news source. here is the link:

http://www.neurope.eu/articles/94588.php

It is an interview with Kairat Kelimbetov, the head of Samruk Kayzna, whcih is the parent company of KazAtomProm, and all large gov't corporations. Not very relevent until you get to the end of it. it says this:

"...We cannot but ask about the situation around the national company Kazatomprom caused by the arrest of its now former head, Moukhtar Dzhakishev. Now, as is known, there has been a reaction to his arrest from the foreign partners.
As to the reaction from the foreign partners having either contracts or joint ventures with Kazatomprom, we are now preparing a letter from Samruk-Kazyna confirming all earlier international contracts and joint ventures, so there should be no doubts or anxiety about it. "

To me, this is somewhat of a confirmation of my original thougts. The gov't relaizes all they can/will lose, and I don't think this was ever abour uranium, or UUU at all. It is simply a powerplay designed to get one of the bosses henchmen out who had fell out of favour. But in this paragraph, I think it is clear that the gov't knows that it would be unwise to cast doubt on their attractiveness for foreign investment.

Obviously, this is not official, and is not set in stone, but for me, it is positive semi-confirmation of the reason that I bought in UUU in the first place. I bought in at around $1.70, because I wanted to be sure we had hit a bottom. Since then it's gone to $2.97 pretty much without stopping, so I would expect a pullback. But I am holding until this mess gets settled, which I believe will be in favour of Uranium One.

June 11, 2009 | Unregistered CommenterRob Ambrose

Many reasons to run for the hills with this company.Their ex-CEO was a snake while their new CEO lies everytime he speaks.You ask how do I know; because I've saved almost every uranium story from 2006, 2007 and 2008 from almost every news wire for all the "real" uranium companies !!! UUU which use to be SXR took the ticker symbol from the company it "merged" with, UrAsia on Feb. 13th 2007 I believe....UrAsia was the bigger company of the 2 when the "merger" took place.When UrAsia owned the Kazakhstan mine in question in their press releases back in 2006 & 2007, UrAsia spelled it KHARASSAN (with 2 's'), while Uranium One spells the mine with 1 's', KHARASAN in all their press releases since the "merger".I believe this is more than a typo error and there just might be 2 mines that are almost spelled the same & Uranium One got the lesser of the possibly 2 mines ??? Also in Jan.'08, Uranium One stated that in the 2nd qtr. of '09 they would be producing alot of uranium (can't find that article now with that exact amount they stated).Well the 2nd qtr. is almost over and that mine in question is far from delivering any uranium at this point in time !!!!!!! and finally the nail in the coffin from an article written by analyst Bart Jaworski @ Raymond James on 10/15/2007....Bart wrote Uranium One's share price has fallen enough back then due to the cancellation of a analyst trip to its property in Kazakhstan that the company had planned for later that month and its decision to pull out of the BMO Nesbitt Burns investor conferences that week as well in Switzerland and London.Bart went on to say," at face value, we believe the company's explanation is plausible (why they couldn't make thoses meetings), EVEN THOUGH THE MARKET MAY FIGURE URANIUM ONE HAS RUN INTO START-UP OR OWNERSHIP PROBLEMS IN KAZAKHSTAN"..... READ JUST THE LAST SENTENCE OF MY EXPLAINATION IF YOU DON'T LIKE TO READ AND YOU WANT TO KNOW IF YOU SHOULD BUY OR SELL UUU.TO !!!!!!!!!! THIS ANALYST BART HIT THE BULLS-EYE 1 1/2 YEARS AGO.....BART SHOULD GET A RAISE RAYMOND JAMES !!!!!!! URANIUM ONE IS THE ENRON SCANDAL OF THE U.S. Their new C.E.O.,Jean is another Ken Lay; and we all know what happened to that
thief.I have all of Jean Nortier's interview's & press releases saved in a folder from 2007 & most of 2008.When I went over most of them last week and read what he hoped for and what has actually happened, I couldn't stop laughing.This was the company that was going to surpass CAMECO as the world leader in 2012 for supplying uranium.Yet last year they had to sell 1/2 of their Australian mine to raise desperately needed.If a good analyst was able to go over their books very closely, he/she would see that this company is probally close to going UNDER........How about 2 years ago when UUU said their cost basis for getting uranium out of the ground was in the teens; yet today the mine is shut down, laid off the workers at site, find out the cost basis is alot higher than they were reporting and the grade of uranium is alot worse than they stated.....Now ther're crying because the African Gov't. wants to take the mine away from them because of inactivity at site !!!!! In time you'll all see the next ENRON OF THE UNITED STATES; PROMISE !!!!!!!!! SO MY ANSWER IS SELL AND DON'T BUY !!!!!

June 11, 2009 | Unregistered CommenterRico Hammer

Thanks Rob.

June 11, 2009 | Unregistered CommenterUranium Stocks

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