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Monday
Apr212008

Uranium Participation Corporation: P/E at 2.05!

Uranium Participation Chart 21 April 2008




A sign of the times is just how low some of the uranium’s are trading is Uranium Participation, currently trading at $8.06 giving the company a P/E ratio of 2.05.

Uranium Participation Corporation has a Market Capitalisation is $482 million and on Friday the volume was 1.92 million shares traded. The company’s stock price has a 52-week high $17.50 and a 52-week low $7.92, pretty much as hard hit as the others in this sector.

We find it staggering that this company, which basically trades in uranium and does not have any exposure to the risk element that goes with mining, can have been sold off to the point that its Price to Earnings Ratio is 2.05 and the EPS (Earnings per Share) is $3.94.

The average cost to them of u3o8 is $37.91 US dollars per pound, according to their NAV update dated 29 February 2008, against a long-term uranium price of $95/lb.

Are we unfashionable at the moment or what?


Uranium Participation Corporation trades on the Toronto Stock Exchange under the symbol of ‘U’


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Footnote:
For those of you who are looking for a little more diversity in the energy field then you may want to read Doug Casey’s Energy Speculator, just this link.

Have a good one.
Sunday
Apr202008

Uranium Resources Incorporated: Face an historical challenge from the Navajo!

Uranium Resources Inc logo 20 april 2008

The NRC (Nuclear Regulatory Commission) will be challenged in the federal appeals court for its approval of a source materials license for an in situ leach uranium mine, according to the Environmental News Service.

Although the Uranium Resources Incorporated (URRE) President Paul Willmott said at the time that modern in-situ leach uranium recovery technology

"Represents an acceptable and safe alternative to traditional mining methods historically used to recover uranium in New Mexico."

Navajo seal 20 April 2008

The Navajo disagree and are taking a legal stand to prevent uranium mining on their lands. The hearing is to take place on 12th May when Environmental Law Centre will argue that the NRC violated the Atomic Energy Act, the National Environmental Policy Act, and its own regulations when it issued decisions on numerous issues.

As the Navajo Nation have already banned uranium mining on Navajo land on April 19, 2005, this issue looks as though it could take some untangling, a case of big business versus the Navajo way of life and environmental considerations.

The article goes on to say that Uranium Resources have established a partnership with Itochu Corporation, one of Japan's largest corporations, to evaluate and develop the Church Rock site.

Keep an on the 12th May for the outcome of this hearing and a close eye on the URRE stock price.

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Wednesday
Apr162008

Paladin Energy Limited: stock sold off by Merrill Lynch

Paladin logo 10sep07

Merrill Lynch has sold off a parcel of shares in Paladin Energy Ltd thus extricating itself from its association with collapsed margin lender Lift Capital Partners Pty Ltd.

However, there are two directors of Paladin, Rick Crabb and Gillian Swaby, who are disputing Merrill Lynch’s right to liquidate the shares. This is a bit of a messy squabble that both parties could do without at the moment. However, it appears that Merrill have already sold the shares which are now the subject of a legal battle in the Federal Court in Perth. The directors claim that

“ They maintain that at all material times they had beneficial ownership of shares held by a nominee of LIFT Capital Partners Pty Ltd, and "that they will continue the legal proceedings they commenced to protect their interests in these shares including for repurchase of those shares if these have been sold"

The article, carried in The Sidney Morning Herald goes on to say that; ‘Last week, Lift Capital Partners Pty Ltd went into voluntary administration after its investors were spooked by concerns over the viability of its margin lending model. Merrill Lynch is Lift's sole secured creditor and is owed close to $600 million, secured against stock worth between $700 to $800 million’

It’s a real shame that it comes to this, which is of course a distraction away from the main event. We don’t own any of this stock but we do wish them well and that they can put these issues to rest quickly.

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Have a good one.
Tuesday
Apr152008

Uranium spot price eases to $68/lb-$69/lb

Uranium spot 16 April 2008

The chart is courtesy of TradeTech.

Despite a $3/lb slid in the spot price the long-term price remains firm at $95/lb and that is the number that we should be focusing on. No doubt this change to the spot price will send some investors to the exit door, but is it really a time to sell?

This latest update comes from the web site called The UX Consulting Company, one of the foremost publishers of data regarding uranium. In a commentary carried by Reuters a trader is reported as saying:

"It doesn't appear to be any immediate underlying demand from the utilities ... so it keeps on softening off, It is possible for prices to fall further, generally people are well covered,"

The report goes on to say that according to a fund manager (we wish they would use names)

"The number of companies that keep on producing supply shocks, albeit small, is increasing and the number of reactors being planned is increasing,"

Looking down a list of uranium stocks they appear to have had a reasonable day. This news may not have got to them yet or just maybe enough is enough, as the volatility of the spot price is having less of an impact now?

To reiterate the longer term uranium price is still firm at $95/lb so we are not selling any uranium stocks. You, of course have to make your own decisions, as we are all different with unique objectives, aversion to risks, etc.

As for a buying opportunity, yes this could be it, however we are waiting a little longer for some sort of confirmation that this sector is on the move north.

Have a good one.

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Monday
Apr142008

Aurora Energy after the vote!

The Labradorian logo 15 April 2008
The minister for Lands and Resources, William Barbour said: “the message the government is sending to the communities is not that they are anti-development, but rather they are taking time to ensure there is responsible development taking place on Labrador Inuit Land.”

Endeavouring to get a handle on the situation regarding Aurora Energy we came across this article carried by The Labradorian entitled 'All is not lost'

The minister went on to say that: “Just looking at the economy and job loss is looking with tunnel vision. We need time, we can't be forced into decisions that are rushed. Our time lines are important as well, "

So it now appears that Aurora Energy will have to wait three years while the government compiles a land use plan, formulates its own environmental assessment legislation and staffs up a land and resources division.

The bottom line would appear to be that uranium mining can be accommodated, however, it has to be implemented correctly with all due care and attention to the regulations, once they are compiled.

Dr. O'Dea said "We strongly believe that we can demonstrate to the Nunatsiavut government that uranium mining can be safely carried out, with the utmost care for the integrity of the environment and that Aurora-Energy representatives would continue to hold public discussions on uranium mining. "

Maybe as the the land use plan takes shape some relaxation could be afforded to Aurora to enable them to carry out preparatory work we as move forward?

All we can do now is wait and see!

Aurora Energy is currently trading at $3.95, down from a 2007 high of almost $20.00, has a market capitalisation of $289 million and is not for the faint hearted.

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Sunday
Apr132008

Jordan’s Uranium for a French Nuclear Plant

Kuwait Logo 14 April 2008
This appears to be a straightforward swap, one state of the art French nuclear power plant for access to Jordan’s uranium deposits. Jordan's uranium reserves are estimated to stand at approximately 180,000 tons, according to government sources, which is a significant amount.

The uranium would be mined to pay for the reactor with any surplus revenues going to the Jordanian treasury. According to MENAFN, the Kuwait News Agency KUNA The International Atomic Energy Agency (IAEA) is supportive of Jordan's plans to rely on nuclear technology for peaceful purposes.

Similar remarks were carried in an article by the Al-Arab Al-Yawm paper on Sunday where the source is said to have indicated “the deal came after talks with two companies, a British and a French company, and the details of the deal signed with the French company would be announced at a later time.”

So it would appear to be a win-win situation for both parties, we have to applaud France for being proactive and getting out there and securing this deal. They get another supply of uranium in return for a nuclear power plant, thus increasing their credibility in the region.

Have a good one.

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Friday
Apr112008

The Shaw Group Inc: To build two new nuclear power plants!

Shaw logo 10 April 2008



The Shaw Group Incorporated have announced that they have been awarded an Engineering, Procurement and Construction (EPC) contract by Georgia Power Company for two Westinghouse AP1000 nuclear power units and related facilities.

Chairman, president and CEO, J.M. Bernhard, said:

"Nuclear energy is vital for the future of our nation's electricity supply system as the demand for clean, reliable and cost-effective power continues to soar. We applaud Georgia Power for its leadership role in choosing new nuclear power and the world's most advanced reactor technology as part of its balanced supply portfolio approach to meeting future electricity needs."

The announcement goes on to say that the two AP1000 units are expected to be placed in service in 2016 and 2017, respectively. A timeframe of eight to nine years’ appears achievable to us, we do tend to become a little suspicious when a contractor puts in a ‘fast track’ programme to complete the project in record-breaking time. However, we would also draw your attention to the wording EPC, which as we read it takes the project to the end of the construction phase. Beyond construction there is also a commissioning phase, which could add another year or so to the timescale, unless this activity has been included within the construction period, which is not clear to us at the moment.

Each of these units has a generating capacity of 1,100 megawatts and would be constructed at the existing Vogtle Electric Generating Plant site near Augusta. This project is being undertaken with Westinghouse a relationship that goes back to the design and construction of America's first commercial nuclear power plant at Shippingport, Pa., which began operation in 1957.

This is great news for uranium bugs so lets hope that more organisations and governments see the light and become proactive and face up to the future demands for energy which are not about subside.

In an internal note to employees the company had this to say:

“Without a doubt, this contract is the most significant milestone in the rebirth of nuclear power plant construction in the United States. Following our recent agreements with South Carolina Electric & Gas and Progress Energy to move toward the finalization of similar EPC contracts, today’s announcement is a clear signal that the long-awaited nuclear renaissance is finally underway in the United States. It has been a long journey, but our ultimate destination is now in sight”

Please note ‘nuclear renaissance is finally underway’.

And about time Too!

Have a great day.

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Wednesday
Apr092008

Iran: Pushes ahead with new production plant

Iranian Flag 10 April 2008

The deputy head of the Atomic Energy Organization of Iran, Hossein Faghihian, has said that Iran will inaugurate a new uranium ore concentrate production plant in Ardakan, central Iran.

According to The International Herald Tribune the plant takes uranium ore and turns it into a concentrate known as yellowcake in an initial step in the process to produce nuclear fuel. This new facility is expected to be completed by next March, when the plant will begin producing 70 tons of yellowcake per annum.

Mr Faghihian is quoted as saying:

"With the inauguration of the facility, the country's needs for uranium ore concentrate will be met."

Iran continues to state that its nuclear programme is for the generation of electricity and not for the purpose of building nuclear weapons. The United States continues to be suspicious of Iran’s motives and thus the tension continues. We would like to see a world where nuclear energy is available to all who need it without the worry that comes with it regarding nuclear weapons. One day, maybe!

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Wednesday
Apr092008

Aurora Energy loses vote 8-7!

The long awaited vote has finally been cast eight votes in favour of implementing a three-year moratorium on uranium mining on Labrador Inuit Lands, and seven against the motion.

This news was taken badly by the shareholders who opted to sell the stock thus driving Aurora’s price down by 33%.


In a statement, Dr. Mark O'Dea, President and CEO, Aurora Energy Resources Incorporated said:

"The Nunatsiavut Government has indicated that it is supportive of natural resource development and open to evaluating ongoing project information, but needs additional time to prepare for significant developments like the Michelin Project"

"Currently there is no uranium mining on Labrador Inuit Lands and there are no plans for uranium mining operations for the next three years."


The report carried by The Financial Post went on to say that Aurora plans to conduct an in-fill drill program at the Michelin and Jacques Lake deposits and continue with a pre-feasibility study on the Michelin Project.

This is a hammer blow for Aurora Energy to miss out by just one vote. The knock on effect also hit the stock price of FRG which has a stake of around 43% in Aurora Energy, their stock closed down 8.8% on the news.

A number of questions need to be considered such as, what are the chances of a reversal in three years time, how long would it take to get everything lined up prior to the commencement of mine construction, etc. We will allow the dust to settle and re-visit these issues shortly.

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Tuesday
Apr082008

Uranium-Stocks.net Portfolio Update 08 April 2008

Uranium Chart 08 April 2008

This chart is courtesy of www.U308.biz.

In scanning through a number of charts of uranium mining stocks we can see that the majority exhibit a similar pattern in that they have fallen to a position below their own 50 day moving day average. This is not exactly a knock out but the points have pilled up against these stocks.

As we said in our last update, "wrongly or rightly we decided to grin and bear it and not sell any of our stocks and subsequently register the associated loses" So we are now in situation where we believe that the damage is done and that the downside is limited. However there is no moon shot rally on the cards either, as it looks like progress will be slow and mixed from here on. We are sticking with our previous stance of ‘hold’ and recommending just a few stocks as ‘buys’ with the view to acquiring these stocks gradually, which are Laramide Resources Limited and Mega Uranium Limited.


Cameco Corporation – Watch
Cameco was trading at $36.94 when we last updated the portfolio and closed at $35.08 yesterday, no real change here, pretty much sideways movement.

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 closed at $0.16 yesterday, again pretty much sideways movement.

Uranium Participation Limited – Hold
U is trading at C$9.26 having been as low as $9.00 recently. We bought at $11.97 on 21 November 2006 so U is still showing a small 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 recently traded at $2.87, however it closed at $2.00 on yesterday showing a slight deterioration since the last update. The news flow has been good but this sector is out of favour so investors have turned their attention to other opportunities.

Crosshair Exploration and Mining Corporation
– Neutral.
Having taken a small profit we continue to watch CXX. The stock was trading at about $1.46 last month but has fallen back to close yesterday at $0.86. 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 comes as a surprise to us. Although we do not own this stock it is tempting at these price levels.

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.


Khan Resources Ltd - Hold
We bought Khan on the 5th March at $3.63 and it dropped to $1.33 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. Khan closed at $1.73 last month only to fall back again to $1.21 yesterday.

Aurora Energy Resources - Hold
We bought Aurora on the 5th March 2007 at $14.17 and it is now trading at $5.27. A resolution to the issues surrounding the granting of a mining license is desperately critical to their activities in the Central Mineral Belt. Any good news would send this uranium stock soaring, however that’s easier said then done.

Strathmore Mineral Corporation - Hold
We bought STM on the 14th April 2007 at $4.96 and it is currently trading at $1.55, which is a very disappointing performance indeed. STM along with the others is a victim of the downturn in uranium prices.

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. URE closed on Friday at $1.78, which begs the question, is this the low for Ur-Energy or are we in for more of the same?

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 and close at $6.85 yesterday. We will continue to watch for the now.

This tiny sector has been hammered and we are sorry not to be able to bring you better news. However being a small market sector and thinly traded, suggests that when the market perception improves these stocks could move up the ladder with some speed. We have already witnessed the odd uranium stock jumping up by 20% in a single day, as trigger-happy investors did not want to be left behind. The longer-term price remains strong at $95/lb but the spot price continues to put a damper on things as it shows uranium trading at $71/lb. Very little uranium changes hands at the spot price but its importance rules the roost, for now!

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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