Uranerz Energy Corp: Needs A Support

All uranium stocks have suffered a sell off and in recent weeks we have documented the end of the sell off in some uranium stocks as we have watched them begin to consolidate in preparation for the next rally.



Uranerz has not yet found a support, and until it does we would rather wait for a while, than buying now when it is uncertain just how far this stock will fall.

Although on the surface we see no problems with the fundamentals of Uranerz at the moment, we must wait for the stock to find a support level before buying, otherwise we risk falling further with the stock.

Other uranium stocks have begun to consolidate and find support levels. Recently we wrote about Mega Uranium needing to find a support level and then we wrote another article as soon as it looked like Mega had found this support. Laramide also has begun consolidating.


We will wait paitiently to see just how cheap this uranium stock is about to get before considering a purchase. As always, our readership will be kept fully informed.

Uranerz Energy Corp trades as URZ on the AMEX.

Crosshair: Non-Symmetrical Triangle Formation

We sold Crosshair in February at about $2.60 having bought it at $1.86, a profit of about 40%.



Crosshair is still on our uranium stocks watch list but we are yet to be impressed by this uranium stock so we remain neutral.

The company has recently began a C$8.5 million drilling program on their uranium property in Labrador, consisting of 40,000 metres of drilling. If we see some good results coming through, it is likely that CXX will spike upwards, perhaps challenging its all time high of around $4.00

Technically speaking, Crosshair seems to have formed a Non-Symmetrical Triangle. The triangle looks to be coming to a point in a couple of months, so if CXX is going to make a breakout, it should happen by the end of the summer. The textbook technical way to trade a non-symmetrical triangle formation is to place a sell on a break down and a buy on a break out upwards.

We will monitor the progress of Crosshair closely and keep our readers informed of any breakouts or other significant news.

Another reason not to buy Crosshair right now is that the 50 day moving average line (blue) has just broken down through the 200dma (red). This is a negative sign so we will monitor the break through to see if it bounces back up or continues of this pattern of decline. Recently the stock also broke the 200dma, so it needs to find some more support before we seriously consider giving a buying signal for this uranium stock again.

Crosshair Exploration and Mining trades as CXX on the Toronto Venture Exchange.

Queensland Uranium Mining Update

Australia has more known uranium reserves than any other country in the world, Queensland has an estimated $20 billion in uranium resources, and some of our best performing uranium stocks have big projects in the area.



Therefore we are watching the situation very closely and now bring you the latest updates on what is going on down under.


So far the Three Mines Policy is still in place, which, for those of you who don't know, only allows three uranium mines to operate in Australia. These are the Ranger, Nabarlek and Olympic Dam mines, which were already in production when the policy was formulated. The power to allow uranium mining is planned to be given to the state government by the Labour Party of Australia a few months ago. This was one barrier removed from stopping uranium mining in the area but it still remains to be seen when the state premiers, particularly in Queensland, will give the go ahead for uranium mines to be developed, if the Labour Party get their new policy through, assuming they get elected.


And now to more recent events. A company called Duyfken Energy has applied for 38 exploration permits pending with the state government of Queensland to explore an area of about 8000 sq km in the north of the state for uranium deposits. The continuously rising uranium price is sparking a “uranium rush” as many companies scramble to find resources.

However, the companies that stand to gain the most, and indeed the ones that have been gaining the most are the ones that were in position first. Companies that we like are Mega Uranium and Laramide Resources, both of which are down as BUY on our uranium stocks portfolio.

But until the state premiers give the go ahead, we won't see any movement towards production, The only way companies like Mega and Laramide can grow is by extending there resource base and benefiting from a rising uranium price.

A quote caught our eye from the Queensland Mines and Energy Minister Geoff Wilson. When commenting on the Three Mines Policy he said: "It's in black and white - it's been there for years and it will continue to be there for years because the government position - has been well stated and made known by the Premier - is that there will be no mining leases granted for uranium in Queensland.”

Well that might not actually be the case...

Peter Beattie is the Premier of Queensland at the moment and he is a member of the Labour Party in Australia. Currently, the Liberal Party is in power in the federal government, with John Howard as Australia's Prime Minister. Now the Labour Party, supports a re-think of the uranium mining policy and they are currently leading in the polls. A federal election is due to take place soon in Australia, and so we could so the Labour Party coming into power. At the moment, a new policy on uranium mining has not been formulated by the Labour Party, so there is not a great deal of pressure on Beattie to change Queensland's policy. However, if the Labour Party get into power, then they are likely to make a policy on uranium mining and although they can no longer dictate to Queensland what to do, they can certainly lean heavily on the State Premier, a member of their own party, to toe the party line and abide by their policy.

Or indeed,we could see a new State Premier in Queensland, as Beattie has been in the position for nearly 10 years and there has been some speculation that he might leave his post in Queensland to enter national politics. Although nothing has been confirmed, he has hinted that he may step down in the next 12 months. A new Premier could bring with them a fresh view on uranium mining and could bring with them a new set of policies that are more suited to the situation in today's uranium and nuclear industry. After all, in 1998 when Beattie took power in Queensland, uranium was on the floor and quite rightly many people were opposed to the mining of yellow cake, especially at such low prices.

Regardless of whether Beattie stays or goes, Queensland has to wake up to the fact that the uranium industry has changed and the state really needs to re-think its attitude towards uranium. In fact, just this week the chief executive of the Queensland Resource Council (QRC), Michael Roche, said it was only a matter of time before Queensland would allow uranium mining especially in the light of world energy demands which are expected to grow by 50 per cent over the next two decades. He also said that pressure on politicians by Australians to allow uranium mining would also increase. Roche said: “It is hard for a state government to say to its citizens, we're going to deny this state the best part of 1,000 new jobs, best part of $1.5 million of mineral production each year and a new source of royalties. That's a new source of tax dollars and a new source of funding important services for the people of Queensland.”

We think that those figure are a little conservative, as it only accounts for just over eleven thousand pounds of U3O8 being mined, whereas we feel that if Queensland opened up its uranium mining industry, within a few years there would be millions of pounds of yellow cake coming out of the state equalling hundreds of millions of dollars in exports. This will be the driving factor behind the push for more uranium mining in Queensland, money, pure and simple. Queensland's massive uranium resource wealth has been ignored for too long, its only a matter of time before it hits the world stage.

RPT Uranium Falls 9.38% Yesterday

After some fairly decent drilling results, shares in RPT Uranium lost 9.38% yesterday, taking loses of the last three trading sessions to over 17% and loses in the last five sessions to 22.67%.



We sold RPT Uranium at $0.62 as it looked very spiky, it has now dropped back to 58 cents so perhaps an opportunity to re-enter the stock may present itself soon.

It was always our plan to buy RPT back after a drop which we thought was imminent. However, from looking at the chart we see that although RPT has fallen back to its 50dma, it is still a good 15 cents away from the 200dma. This may not sound like a lot but every penny counts in small stocks like RPT as 15 cents is more than 25% at current prices.

When RPT continued to rise despite the sell off in uranium stocks, we saw this a very positive sign as it showed investor confidence in this stock despite less optimistic attitudes for the rest of the sector.

Therefore we still like RPT and hope to buy it back some time in the future when this current pullback is over. We shall watch for sign of consolidation and perhaps a bottom being formed and keep our readers fully posted.

RPT Uranium Corp trades as RPT on the TSX Venture.

Chinese Uranium Company Pulls Out of Niger

The China Nuclear Engineering and Construction Corporation (CNEC), today pulled out of Niger and shut down its uranium prospecting operations after receiving threats from the Tuareg rebels.



Apparently, All the Chinese have left the site and arrived at Ingall (100 km south of Agadez) with their prospecting equipment and a major military escort.

This pullout comes shortly after a Chinese national was kidnapped on Friday by the rebel movement. The movement, called the Movement of Niger People for Justice has called for an immediate end to all mining in the North of Niger and claims that “No foreigner will be safe” until their demands are met.

We do not know who is “right” and who is “wrong” in these conflicts and it is not our policy to take sides. However we do not see how shutting down mining operations will help Niger as a country. No mining means no companies making money, which means no taxes being paid, which means no money for the people of Niger. Also, these violent actions by the rebels discourage investment in the country and so its economy will struggle to prosper. We do not invest in areas like Niger exclusively for this reason, political uncertainty makes investors nervous and so many refuse to put their hard earned cash into such places.

No matter how great the project may be, we simply do not think it is worth risking our money in unstable regions of the world. In fact, if the story is spectacular, then that is even less reason to put your money into it as it will just be more tempting for government to nationalise or rebels to targets.

Stick to politically “safe” countries and you take a great deal of risk out of your investment.

India to Double Nuclear Energy Generation

The State of Orissa in India is considering a proposal to build a 4,000 to 6,000-megawatt capacity nuclear power plant, which would double the country's nuclear power generation which is about 4,120 MW at the moment.



The plant is being proposed in the light of the US government's offer of technology under the bilateral nuclear cooperation agreement with India.

S Thakur, executive director, planning, at NPCIL (Nuclear Power Corporation of India Ltd) said:
“In anticipation of India being able to get international cooperation and access to nuclear technology, we are thinking of setting up large capacity nuclear power plants in coastal locations which be of the order of 6,000 MW to 8,000 MW." Mr Thakur also said that he was sure “money will not be a constraint”.

He also said that the prospect of importing good quality uranium from overseas had “brightened chances” for the nuclear power plant.

Well, I wonder where this uranium from overseas is going to come from?

Perhaps from one of our uranium stocks?

It looks like our uranium stocks stand to make a ton of money especially as “money will not be a constraint”

For ideas on how to profit from this and ideas on what uranium stocks to buy, please subscribe to our newsletter, free of charge, by clicking here.

Florida Needs More Nuclear Energy

A panel examining the energy needs of Florida, USA said that the state needs to consider building more nuclear power plants and facilities to recycle nuclear waste into fuel.



The committee recommends that nuclear energy should play a big part in the future of Florida and its energy needs due to concerns about global warming.

On Monday several members of the Florida Energy Commission said that volatile spikes in natural gas prices and concerns about carbon emissions from coal are sparking an interest in nuclear power once again.

Florida currently has three nuclear plants, but it will need more in the future if it is to combat climate change. Florida should have a large interest in stopping global warming as they are one of the main areas in America that will severely suffer with rising sea levels, as much of south Florida and Miami will be underwater if scientists predictions come true.

We think that Florida and other countries and states around the world should move now to begin planning and building more nuclear power stations. Not only are fossil fuels running out, but the supply is becoming increasingly unpredictable due to political circumstances and every time we burn fossil fuels we are adding to global warming, which is a serious threat. The United Kingdom and Germany recently announced that nuclear power is going to play a significant part of their future. A recent report said the world needs 3000 nuclear power plants to have a dent in global warming.

The building of all these new power stations will have a huge impact on demand for uranium and therefore uranium prices will increase as supply will not be able to meet demand for at least a good few years. Quality uranium stocks, such as the ones covered on this website stand to make a fortune out of selling their uranium into a triple digit uranium market.

Mega Uranium: Finds Support

After falling over 43%, Mega Uranium has found a support level at about $5.25 and we are pleased to report that it has bounced back over $6.00, gaining about 14% in the last few days.



We wrote about Mega needing to find a support level on July 5th and now that is has done that, Mega could be set to test its 50 dma and consolidate gains above the 200dma.

By taking a look at Mega's moving averages, we can see that the 50 dma (blue) and the 200 dma (red) are on a collision course. What remains to be seen is if the 50 dma goes below the 200 dma or whether it bounces on the 200 dma line. If the 50 dma breaks down through the 200 dma then we could see some turbulent times for Mega as technical traders may well sell the stock off due to this negative signal. But if it bounces, then we should be Mega making a substantial recovery.

Mega Uranium continues to be marked as a BUY on our uranium stocks portfolio and we see it as a bargain at these prices.

This recently recovery gives us a fair bit of confidence that the majority of the carnage is over for Mega and it can now look to move up higher and catch up with the uranium price.

Mega Uranium has a market capitalisation of $888.69M and trades as MGA on the TSX.

RPT Uranium Corporation: Decent Drill Results

Below is a table of the drill results released by RPT from their Split Rapids Project.

In our humble opinion they are an encouraging set of results especially the 0.222 percent of U3O8 from a core length of 6.35 metres. The other results are also very interesting although the core lengths are a little on the short side for us to get overly excited.



As you know we sold RPT recently having made a profit of 47.6% in four months as we thought that the stock had run too far ahead of itself. Well since we sold it, it has been up to $0.75 and has recently slipped back to trade at $0.64 yesterday. RPT’s 200 DMA is still under $0.40 so the stock is still trading a lot higher at the moment and that gives us cause for concern. The RSI, MACD and the Stockastics are all heading south which is another indication that the stock price is just too high and unsustainable at these levels.



However, investors are always hungry for good news and the above drilling figures may just be the catalyst to ignite a rally in the stock today. We will observe the action today, as it will be interesting to how the market responds. It is a little ‘micro’ on our part to dwell on one piece of news, but the devil is in the detail or so they tell me.

Have a good one.

Strateco Resources Inc: BUY

Due to the seasonal behaviour of the stock market, the summer is often a good time to acquire some great stocks selling for a considerable discount.



Uranium stocks have been hit by quite a sell off in recent months, and this pullback could be a good time to buy some cheap uranium stocks. We having been watching Strateco since August 2006 but we now think Strateco Resources is at a great discount and so we are signalling a BUY on this uranium stock at $2.30 and we are adding it to our uranium stocks portfolio as a BUY.

Strateco does not currently have any uranium mines in production so this is more of an exploration play. A key component of a successful exploration company is a good management team. Strateco has a good management team with the President and CEO, Guy Hébert, who has been a good track record having raised over $250 million for mining projects over the last 30 years and he has occupied the role of President and CEO of successful exploration companies, such as Audrey Resources and Cambior, which was a BUY on our gold portfolio until it was taken over by Iamgold. Jean-Pierre Lachance is the Vice President and also has over 30 years experience in the international mining industry. So will do not see any great holes in the management team.



When looking to gain a significant return on ones investment, one must consider the size of the company. A company too large can be slow to move compared with the industry whereas a company too small may prove to be too volatile to trade in, or the lack of liquidity may mean that although your stock may have doubled, you cannot cash in your profits due to the lack of volume. Strateco Resources does not have either of these problems with 106.9 million shares outstanding and a market cap of 245.77M. Over the last 30 days, the average volume has been about 750,000 shares each day, which is enough to get in and out without moving the stock price up or down too much. Also with a company this size, it could easily be an acquisition target for any of the larger uranium stocks. Strateco is well financed with over $25,000,000 in cash raised in February.

As for their projects, Strateco holds the Matoush, Eclat, Matoush Extension and Mont-Laurier properties shown on the map below.



The Matoush Project covers an area of 164 km and Strateco has drilled holes showing some high grade intersections of 2.00% U3O8. Cameco and Uranerz are also involved in this area of operation and it looks like an emerging uranium district that Strateco has been fortunate enough to get a foot on early on in the game. There could be a case of Strateco and Uranerz merging or one buying the other out. Or indeed we could see Cameco buying one or both of them as they also have a position in the area.

This year, Strateco has a budget of $16 million and they are going to drill over 80 holes totalling 30,000 metres. The aim of this is to get a definition of their resources, preferably to a NI 43-101 standard. They also plan to build a camp to house 45 people and also construct a winter road into the area.



A good aspect of there projects is that they are in a politically stable country as they are in Quebec, Canada. Canada is the world's largest uranium mining country and the government is pro mining and exploration and the resources business is a great part of the Canadian economy. In today's world as resources become more and more scarce, any resources in politically stable countries are even more valuable. This particularly applies to uranium where uranium supply is seen as a politically stable fuel compared to for example oil. With trouble brewing in Niger and possibley other countries with uranium, projects like Strateco has in politically stable countries become more and more precious.


As this is primarily an exploration play, technical analysis is not always as useful as it is with larger companies but nonetheless it sould be taken into consideration.



From its high of $4.00 Strateco Resources has fallen 42.5% so it is one of the most discounted uranium stocks on the market today. If one was going to buy this uranium stock, it seems much more sensible to buy now, than on the top of a precarious spike. The STO, MACD and RSI are all on the floor, giving us a bullish signal.

We made a small purchase today at $2.32 and Strateco Resources is now on our uranium stocks portfolio as a BUY.

Strateco Resources Inc. trades as RSC on the Toronto Stock Exchange.