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Sunday
May112008

Uranium down $2/lb, but stocks stir!

Uranium chart 12 May 2008

Chart courtesy of www.u3o8.biz


According to The Ux Consulting Company (UxC) the price of uranium on the spot market slipped recently $2/lb to $63/lb. However, the long-term price remains steady at $95/lb and over at NYMEX the futures price for most of this year is around $65/lb. But, we can detect some stirring amongst uranium stocks as bargain hunters move to secure stocks at cheap prices.

As we wrote about recently both Laramide and Mega uranium jumped dramatically and also managed to hold onto those gains. To get a feel for what is happening to stocks in this sector we took a peak at a web site called Canadian Uranium Stocks, well worth a visit if you can find the time. This site lists the stocks, along with the latest price, price change, %change, Volume, shares outstanding and market capitalisation. We then scanned the list for those uranium stocks that had achieved a percentage gain of more than 20% on Friday and the following is a list of those stocks. There are also many more stocks that we have not listed showing good gains of between 5% and 20%.










Cash Minerals Ltd. +23.08%
Crosshair Exploration & Mining Corp. +23.61%
Delta Exploration Inc. +20.00%
Ditem Explorations Inc. +26.09%
Mawson Resources J1. +27.78%
North American Gem Inc. +40.91%
Nova Uranium Corp. +20.00%
Pacific Ridge Exploration Ltd. +25.00%
Silver Spruce Resources Inc. +40.63%
Uranium Power Corp. +33.33%
Universal Uranium Ltd. +89.29%

We agree that this is not a scientific form of analysis but it does indicate that there are buyers out there who are prepared to make an investment despite the spot price drifting aimlessly and uranium being out of favour.

We hope that the above brings some good cheer to your Monday and puts you in a positive mood for the week ahead.

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Thursday
May082008

Uranium stocks get a boost!

LAM logo 10oct07 ................ mega logo 10sep07

We have only 2 BUY recommendations in our portfolio of uranium stocks at the moment and they are Laramide Resources Limited and Mega Uranium Limited both up today, 22.37% and 22.95%!

This is what we wrote in the portfolio update, which as you know is published free, on this web site.

Laramide Resources Limited – Buy
This stock was trading for about $5.00 last month and closed yesterday at $3.63, we bought at $5.78 on the 28 July 2006 so we are now in the red with this one. When we were sitting on a paper profit of around 80% we sold half in order to buy other uranium stocks, as we needed a bigger spread of stocks at the time. Laramide may have formed a bottom at $3.00 however we need a little more time for a confirmation.

Mega Uranium Limited – Buy
We bought MEGA at around $4.0 on 27 July 2006. MGA was trading at $3.32 last month but has since dropped back considerably to close at $2.38 yesterday. Hopefully Mega has found some support at $2.00, which appears to be very cheap buy at the moment.


LAM is trading at $3.72 and Mega is trading at $2.25 as we write, so if you did bag a few shares at those levels then well done to you. However, we aware that one swallow does not make a summer, but this move upwards will bring some relief to many investors. We adopted a strategy of grin and bear it and there hasn’t been a lot to grin about lately. We have not sold any of our stocks during this grim period and continue to hold on to what we have at the same time we are looking to increase our holdings in this sector. The time to buy is when there is blood in the streets and this sector has been severely beaten up. We may see some retraction after such a jump in uranium stocks prices as some investors choose to take money off the table, hopefully this will be short lived.

We will continue to watch for signs that confirm that the market is about to rally. Gold and silver have also put in a good day so the temptation for investors to transfer funds from uranium to the glittering sector beckons brightly, draining some funds from this sector.

Going forward we see all three metals finishing a lot higher come the end of the year. However uranium will be coming off a much lower base and in terms of percentage increases could well be the star performer over the next twelve months. Once again it’s your money and you must make the final decision, we can only call it as we see it and invest our funds in a way that suits us. One strategy does not fit all investors, so read as widely as you can and take charge of your own investment decisions.

Go Uranium’s go!

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Wednesday
May072008

Major decisions await the next President

NEI Logo 08 May 2008

According to The Nuclear Energy Institute (NEI) President and Chief Executive Officer Frank L. (Skip) Bowman:

"No matter who is elected president in November, it seems clear that climate change will dominate the national debate over energy and environmental policy in 2009 and beyond. Whether you believe the scientific evidence justifies mandatory controls on carbon or not, there is one fact on which we can all agree: There is no credible strategy to address the conundrum of climate change and increasing electricity demand unless nuclear power is part of the portfolio."

Mr Bowman’s statement is founded on analyses carried out by U.S. Energy Information Administration, the International Energy Agency and the Electric Power Research Institute. They have all arrived at a very similar conclusion, which unmistakably points towards nuclear power as a major component of the energy basket in order to reduce carbon emissions. These statements are timely for the nuclear industry as the U.S. Senate, in a months time, begins a floor debate on a climate change bill pending in Congress, known as the Climate Security Act. Capital expenditure in excess of $1 trillion will be required between now and 2020 for new electric generating capacity, and associated infrastructure.

NEI Chairman John Rowe had this to say:

"We need 25 to 30 new nuclear plants just to start on the problem. To make a dent in carbon emissions, we need several times that. Failure to build large new power plants threatens the long-term health of the U.S. economy simply put; there is a growing need for new base load generating capacity. This nation cannot afford to use natural gas as virtually its sole fuel”

Our sentiments entirely!

However it will be interesting to observe the new president in action on these issues, assuming that they have some energy left after what appears to be an exhausting campaign.

You can read the article in full by clicking this link, also worth a visit is The Nuclear Energy Institute, which you can get to by clicking this link.

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Tuesday
May062008

Aurora Energy: Good drill results

Aurora small logo

Aurora Energy Resources Incorporated has released an update regarding their current drill programme at the Jacques Lake Resource.

Highlights from their winter infill drilling program were as follows:

- 0.10% U3O8 over 40.79 metres including 0.19% U3O8 over 11.79 metres in JL08-080
- 0.12% U3O8 over 6.00 metres including 0.22% U3O8 over 2.00 metres in JL08-082
- 0.11% U3O8 over 10.50 metres including 0.14% U3O8 over 6.00 metres in JL08-087.

"The results reinforce the grade and tonnage estimates of this growing asset and the very significant potential of Jacques Lake, the results are similar to those for the Michelin Deposit in its initial exploration stages,"

According to Aurora's President and CEO, Dr. O'Dea.

Also worthy of note is that there is no groundwater, metallurgical or rock mechanic issues identified to date at the Jacques Lake Deposit, which is good to know.

However the news came out at the close of business with the stock trading at $3.45, down $0.06 on the day on turnover of 170,391 shares. Still it is good news and more than welcome if you are a holder of this uranium stock as we are. This infill drill programme adds credence to what is already considered to be one of the largest undeveloped uranium deposits in the world. If they could find a way to lift the moratorium that hangs over them we would be going places, until then all they can do is to continue and prove up the resource.

Have a good one.

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frgLogo
Sunday
May042008

Indian opposition to uranium mining

Dept of Atomic Energy India 05 May 2008


Opposition to uranium mining in Meghalaya, India, may be dampened as The Department of Atomic Energy (DAE) announced a "detailed white paper" on uranium mining, which would be presented to the Meghalaya Assembly. Mounting protests have put pressure on the government to take action as Meghalaya has 16% of India’s uranium reserves, totalling 13,500 tonnes.

The Union Minister of State, Jairam Ramesh had this to say:

"The central government will not do anything against the wishes of the government of Meghalaya or the public opinion of the state. This is a huge challenge and we will address it in a very transparent manner. Most of our nuclear power plants are running at 50 per cent capacity due to shortage of uranium. This shortage is the reason why we are going for the Indo-US nuclear deal. Uranium from Meghalaya can help us feed our nuclear reactors to a great extent."

We draw your attention to this shortage of uranium! If this statement is correct then it tells us two things. Firstly, they have the capacity to increase their energy production if they can secure a steady supply of uranium. Secondly, once they have finalised this deal with the US a steady supply of uranium will be taken off the market. A satisfactory conclusion to this situation with the protestors will go some way to alleviating the pressure on demand for uranium, however it bodes well for uranium prices going forward, as India continues with its own industrial revolution.

The protests are based on the fear that uranium mining causes cancer, a team of doctors and scientists from Mumbai's Tata Memorial Hospital are to be assembled in order to combat and allay the fears that the protestors have raised.

The nuclear industry needs to prove on a global basis that uranium mining and atomic power can be utilised without any adverse effects to the population. We are constantly seeing protestors raise similar issues across the globe thus hampering the nuclear renaissance. More effort is required to promote the safety aspects, environmental impacts and the benefits of nuclear power. A universal acceptance is needed otherwise its lights out for the uninformed!

Have a good one.

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Friday
May022008

Uranium: Are we there yet?

Uranium chart 02 May 2008
Chart courtesy of www.u3o8.biz

This is probably the most asked question that we get in our mail bag these days, uranium stocks looked like bottoming once or twice, which turned out to be a false dawn.

A while ago we wrote about Denison Mines when the stock was trading in the $6.00 range and we thought that this was as cheap as it could get. It did manage to rally up to the $9.50 mark only to fade out and slide back to close yesterday at $6.65. Short-term traders might have made a buck or two, but it wasn’t the bottom that we had hoped for. Since then we appear to have entered a period where everyone and his dog have suddenly discovered reasons not to allow uranium mining. NIMBYISM (Not In My Back Yard) has become fashionable once again. If this wasn’t bad enough we also have a bunch of politicians to contend with who will say and do whatever it takes to make themselves popular during their watch. In New Zealand the authorities are already warning of power shortages this winter and the need for the consumer to use less. This is the land of wave; wind, geothermal and hydropower servicing less than four million people. So just where were the politicians when hard decisions had to be made? A small percentage of the population said no to another dam in the south island and the politicians buckled. As New Zealand actively promotes immigration the population is rising with a corresponding increase in the demand for energy. We are using New Zealand as an example, but its not just here that weak politicians put their pensions first and the hard decisions on the back burner, you can see examples of it near you.

The bulk of uranium trades are executed based on the long-term price of $95/lb, which has remained steady for some months now. However the spot price of around $65/lb steals the headlines and is eagerly devoured by those who live by the next instant fix, even though the trade is wafer thin. Over at NYMEX the futures market, which is still in its embryonic phase, more or less reflects the spot market and again is thinly traded. We cannot dismiss either of these two vehicles, as their influence looms large despite the long-term price holding steady.

Taking a look at the stocks they have been battered almost into submission and once again they appear to us to be as cheap as they can possibly get. But we never thought that Crosshair for example would fall much below the $1.00 level and yesterday it closed at $0.65. At the other end of the scale we have the mighty Cameco Corporation trading at $35.67 and in-between we have Uranium Resources Incorporated trading at $5.81, a 50% discount from its previous highs of $12.00.

On the anecdotal side we have had readers tell us that they sold their uranium’s and have gone into gold stocks. Unfortunately some made the move when gold was peaking at $1000/oz so they have had to take it on the chin twice. We would not deter anybody from going into gold, as we own gold stocks too, but the old adage is to buy a stock when no one else wants it. Then you know that you have entered the market at close to the bottom.

In conclusion we are not selling our uranium stocks and we will continue to look for a signs that they have truly bottomed. When this point arrives we will use some of our ‘opportunity cash’ to pick up some of these unfashionable stocks and then wait for the rest of the world to see the light, if the lights are still on that is!

Try and stay calm for now we are nearly there!

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For those of you who are interested in a wider range of energy stocks you may want to take a look at Doug Casey’s Energy Speculator by clicking this link.

Have a good one.




Wednesday
Apr302008

Shell blows away wind power project!

Shell logo 01 May 2008wind power 01 May 2008Stop sign 01 May 2008

In a disappointing u-turn Shell have pulled out of a prestigious wind power project in the United Kingdom, placing the future of this project in jeopardy.

This flagship wind generation project was to produce 1,000 megawatts of power – enough to power a quarter of London’s residential properties.

Shell has so far not given a detailed explanation for its sudden decision. In an article carried by the FT.com the costs of the project appear to have escalated, well there’s a surprise, “from £1bn in 2003 to at least £2bn to £2.5bn as a global rush to wind energy has driven up the price of turbine components”

After the fanfare and the hype that came with this project this really is a blow. Shell’s partners, Eon and Denmark’s Dong Energy now need to find a new partner who are prepared to buy Shells share. Our take on this would be if it doesn’t work for Shell then it doesn’t work for anyone else. Time to prepare for the slow death of this project.

Dong has said it was “looking into all options”. It begs the question of what options?

This blow to wind energy once again puts pressure on the United Kingdom to push on with other forms of energy generation including the nuclear option. However, as we have stated before it looks to us that the United Kingdom will fall into an energy gap where they have insufficient nuclear or conventional power plants in place to meet their energy needs. Although this is a blow to wind energy it does assist the argument for going nuclear which is good news for uranium bugs, and how we need some good news at the moment.

Have a good one.

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Monday
Apr282008

G8 to go Nuclear!

Japaness Prime Minister 28 April 2008
The chairman of the up-coming G8 meeting, Japanese Prime Minister, Yasuo Fukuda, has informed the Annual Conference of the Japan Atomic Industry Forum, that he will give special attention to nuclear power.

Yasuo Fukuda told the audience that:

"I think that such a movement, which is called the 'nuclear renaissance', is proof that our country's unwavering strategy to promote nuclear energy has been the right one. I, as the prime minister of Japan, will support your work and I will keep doing my best to promote nuclear power that is safe and steady. It is critical for us to strengthen the utilization of nuclear energy as a major source of power, along with our efforts for energy conservation and to develop renewable energy,"

And it gets better, as he goes on to say that he will be giving special attention to the importance of nuclear energy in our fight against global warming. It comes as a pleasant relief that the Japanese Prime Minister sees the environmental benefits of utilising nuclear power as oppose to coal fired power stations, for instance.

It will be interesting to see what Italy and Germany have to say, as they are still not pro nuclear power. However, both countries buy electricity for France so they are gaining a benefit from nuclear energy, although indirectly. Just maybe they will see the light and give some consideration to their own future energy requirements.

Should make for interesting reading as the situation unfolds.

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Friday
Apr252008

British Columbia: A policy of no uranium mining?

BC mining 26 April 2008


In a recent announcement by Kevin Krueger, the minister of state for mining, British Columbia (BC) re-affirmed that he would not support the exploration and development of uranium. In contrast their neighbours, Alberta, have appointed a panel of experts to study the use of nuclear power as a possible power source to generate the steam required in order to extract oil from the tar sands projects.

It is true that BC does not have the up coming demand for power that the tar sands projects require and can therefore afford to turn their backs on uranium mining. However, they do have a need for electricity and one day they might well be reliant on Alberta’s oil to satisfy their own energy demands. So if Alberta goes ahead with the development of nuclear energy will BC continue with this ban? It appears to us to be rather short sighted to ban uranium mining just because you do not need it. Why?

Well it must surely be cheaper to truck in uranium from BC than have to get shipped half way across the world. These transport costs will be built into the cost of extracting the oil and of course passed on to the customer, which could be the residents of BC.

There is also an environmental consideration here in terms of transportation. Shipping materials has never been a hazard proof way of transporting materials as evidenced by the number of disastrous oil spills that we have suffered over the years. What happens when a ship carrying uranium runs into trouble? It must be safer to use locally sourced uranium. Alberta’s other neighbour, Saskatchewan, deserves a medal for encouraging such operations, developing its own economic base and supplying others who need uranium.

As we write we note that a strike at the Grangemouth refinery in the United Kingdom has caused panic buying at the pumps. The price of petrol could go up as high as £1.50 a litre according to the some in the media.

£1.50 is equivalent to US$2.97, C$3.01, AUD$3.18, Euro 1.90, INR 119.0, CNY 20.80, RUB 70.26, etc.

This incident only serves to underline just how tight the situation is with the supply of oil and once again reinforces the need for alternatives such as nuclear power. This problem is global so we can only hope that BC will one day recognise the predicament that the rest of the planet is being dogged by and have a change of heart.

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Thursday
Apr242008

Uranium: and now some good news!

Seabrook nuclear power plant


The bottom line here is that lower electricity bills are on the horizon for these customers who buy electricity from the Seabrook NUCLEAR power plant in New Hampshire.

"The market price for a natural-gas unit is significantly higher than the cost for a nuclear plant."

Says David Tuohey, a spokesman for the Massachusetts Wholesale Electric Company. David goes on to say that:

“In 2010, debt service for construction of Seabrook will start to decline, and it is scheduled to be eliminated by 2019. The reduction will be passed on to ratepayers in the form of lower electricity bills”

Three cheers for someone who is as far sighted as the French in terms of having the vision and the will to stick with nuclear power despite the dissenters. It wasn’t that long ago that the customers in the town of Stow wanted a separation from the Hudson Light & Power Department as it was deemed too costly to use their nuclear powered electricity. However, with the decline in the cost of servicing the construction debt nuclear power is being hailed as the way to go! Fantastic! But wait; there is an added kicker to this cheap supply of power in that the requirement to reduce carbon dioxide emissions comes into play. Well as Seabrook's nuclear plant does not produce carbon emissions they will be exempt this green tax. This is the requirement to buy credits for producing carbon emissions! Not applicable here, thank you!

Mr Tuohey goes on to say that "The ownership of the Seabrook plant has gone from a burden to a significant benefit, and the future looks even brighter" Bang on in our humble opinion, but we are biased to nuclear power. So what does this mean to the families concerned in terms of hard cash? For this we turn to Yakov Levin, general manager of Hudson Light who summarised as follows:

“For an average household using 800 kilowatt hours per month, Hudson and Stow customers pay $101, said Levin. Relying primarily on natural gas, National Grid's average bill is $129 for the same amount of electricity, and the figure for NStar customers would be $145”

When the end result is cheaper power then the customers will vote with their feet for more nuclear power stations, lets hope that they do so before the explorers and mine developers throw in the towel and go off searching for the other precious metals.

Have a good one and thanks to B for alerting us to this situation and to The Boston Globe for carrying the article.

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