Tuesday, June 30, 2009 at 06:24PM
Chart courtesy of u3o8.biz.
The uranium spot price stands at $54/lb up from $50/lb at the last update as reported by UX Consulting with the long-term price of uranium trading at $70/lb as reported by TradeTech. Uranium stocks, with a few exceptions have moved lower since our last update in May despite the spot price of uranium moving higher. However there has been a very good rally over the short term and this no doubt has tempted profit takers to bank some of their gains.
Here follows our portfolio update as of 28 May 2009:
Denison Mines Corporation – Buy
Bought on 6th January 2009 for $1.66, a uranium stock that we had watched for some time but for various reasons we had never managed to purchase it. We are happy to own some of this stock and believe it to be a good quality acquisition, DNN closed at $1.68 yesterday
Crosshair Exploration and Mining Corporation – Buy
We never expected to see Crosshair trade as low as it is today so we acquired some on 6th January 2009 at a cost of $0.25, again we are pleased to own this uranium stock despite the price falling back over the last few months. CXX closed at $0.23 yesterday.
Cameco Corporation – Watch
This uranium heavyweight closed yesterday at $25.68 having been around $15.61 at the last time of the last update. This rapid rise tempted us into buying PUT options in anticipation of a correction. We bought the June 09 $25.00 PUTs for $1.40 per contract (CCJRE) on Cameco Corporation (CCJ) unfortunately Cameco remained steady and thees contracts expired worthless.
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 $0.175 up from $0.145 from last time.
Uranium Participation Limited – Hold
Another improving stock since our last portfolio update, now trading at $7.52 as compared with $7.90 at the last update . We bought at $11.97 on 21 November 2006 so still in the red with this trade with a long climb ahead.
Strateco Resources Incorporated – Hold
We made a small investment in RSC at $2.30 but it crashed to $0.48 a few months ago, has started to recover slightly to close at $0.95 yesterday. So its still fingers crossed for this one.
Laramide Resources Limited – Buy
We bought LAM at $5.78 on the 28 July 2006 so again we are still in the red with this one, it was trading at 97 cents recently however has started to recover and closed yesterday at $1.73 having experienced some extreme volatility . 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 has traded at $0.72 recently and closed yesterday $1.79, again a very volatile uranium stock.
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 and was trading at $0.165 recently but it closed yesterday at $0.405.
Aurora Energy Resources
Has now been devoured by FRG which is both a gold and uranium play and we have included it in the gold portfolio.
Strathmore Mineral Corporation - Hold
We bought STM on the 14th April 2007 at $4.96 and it traded as low as $0.24, however, it closed yesterday at $0.48 still a very disappointing performance indeed and extremely volatile.
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, it closed yesterday at $0.93 having been up to $1.60 at the last update, having traded for sub 40 cents recently.
Extract Resources Limited
This is a stock that was brought to our attention by our readership so we placed it in the watch list so we could observe it before actually buying it. At the time it was trading at around $5.00, it then dropped to $3.50 before recovering to close at $6.50 yesterday. The market capitalization is A$2.10 with 323.30 million shares outstanding.
Kalahari Minerals PLC (KAH.LN), an AIM-listed (London Stock Exchange) mining exploration group with a portfolio of uranium, copper and base metal interests in Namibia, now holds 40% in Extract Resources Limited. Extract trades on the Australian Stock Exchange under the symbol of EXT.AU.
For UK residents who have difficulty in accessing the Australian markets you might want to consider trading Extract and Kalahari via Geiger Counter GCL which is on the LSE International.
For disclosure purposes we do not own either of these stocks yet.
Other than sit tight through these torrid times, there is little we can do right now. This situation is improving as we can see by the increase in most of the stock prices, so we will just have to hold on until the argument for nuclear power begins to take center stage again and gives the uranium price a boost. We do believe that the worst is behind us now, so now is the time to be looking to acquire a few more of your favorite uranium stocks as this tiny sector begins a slow course of recovery.
Have a good one.
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