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Peak oil!

Occasionally we receive requests in our mailbag regarding various oil companies as possible investment vehicles, which unfortunately we do not cover. However the team over at Casey Research has sent us their latest take on the subject, which we are posting for your perusal. The views expressed are the views of the author and not necessarily the views of the team here at uranium stocks.

Securing the Insecure: U.S. Oil Imports
By: Marin Katusa
Casey Energy Speculator

Calls for national security to the contrary, America's appetite for energy is stronger than its caution. In the last 15 years, the United States has steadily increased its dependence on imported crude oil by some 60%. Part of the reason is declining production, as displayed in the chart below.

American production vs Imports 11 July 2008

Declining production has been matched by the country's declining reserves. A decline that comes against the backdrop of increasingly extraordinary efforts to turn things around, including deep-sea drilling far off the coast in the Gulf of Mexico. Put simply, regardless of America’s strategic concerns over energy security, any large increase in domestic production or reserves is unlikely.

US Crude Oil Reserves 11 July 2008

To a superpower that imports nearly 70% of its oil, it's more than a mental exercise to evaluate the reliability of its sources. Any economic or geopolitical risk with the potential to disrupt supplies could have a destabilizing and even devastating impact on investment markets and the economy. In the pie chart here we’ve separated the countries exporting crude oil to the United States into three categories: friendly, potentially hostile/hostile, and unsure/neutral.

Countries exporting crude oil to the US 11 July2008

Those countries portrayed in black and gray are the allies, countries that have usually shown a willingness to work in concert with the United States on numerous issues. These countries are Canada (geographic proximity), Mexico (geographic proximity), Nigeria (much improved relations over the past 15 years) and Iraq (very close ties with the United States, for obvious reasons).
Countries depicted in shades of red are countries that are either openly hostile or have previously been hostile with the United States: Venezuela (Hugo Chavez… say no more), Algeria (issues remaining from Algerian Civil War), Angola (U.S.-funded anti-government rebels), Russia (lingering Cold War effects) and Ecuador (the new president is a friend of Chavez). We list Saudi Arabia as a wildcard, with the potential to go either way.

Adding up the numbers, a bit less than half of U.S. imports are from countries that are either politically unfriendly or have the potential to be. Now let's take a closer look at the “allies” of America, since even they have problems providing a stable stream of oil.
The Allies, Such As They Are

In the last 15 years, Canada has taken honors as one of the top crude oil exporters to the United States. However, conventional reserves of crude oil in Canada are in decline, and the only reserves that Canada has in abundance are the oil sands, which are expensive and difficult to extract.

Furthermore, Canada already consumes 90% of the crude oil it produces, and this number is growing. Finally, the Canadian dollar currently puts a great hamper on the growth of Canadian exploration companies: they have to pay their costs in Canadian dollars, but sell their commodities in American dollars, an unfavorable arbitrage.

Mexico has less of a currency conundrum than the Canadian exploration companies, but they face a much larger problem – their reserves are dropping quickly, with little ability to replace them. For example, production at Cantarell, one of the world’s largest oil fields, is conservatively estimated to fall to half of its 2003 peak by the end of 2008.

This problem is exacerbated by Mexico's increasing domestic consumption. Its population already consumes 60% of its crude. Mexico, and its rapidly dwindling resources, could become a net importer of crude oil in the near future. (Jeffery Brown’s Export Land Model estimates that this reversal will occur no later than 2014… six short years from now.)

Nigeria, the African continent's largest oil exporter, has impressive oil reserves. Unfortunately, the country is marred by not only the misappropriation of oil funds but also the ethnic clashes between the Ibo, Housa and Yoruba tribes. The multinational oil companies are either stuck in the middle or contributing to the mess, depending on your point of view. Ongoing supply unrest mean that Nigeria is less than a reliable source of crude.

Iraq contains large known fields, and the potential for more large fields yet to be discovered. As long as the United States maintains a strong presence in the area, it should continue to provide a steady supply to the United States. A long-term presence, however, is very much in doubt. And, should the U.S. leave, the direction of Iraq’s flow of oil could change overnight. So, a big question mark here.

The Axis
Countries such as Angola, Algeria and Ecuador are obviously willing to sell to America now – as they need the money they’ll sell to the highest bidder. But at the same time they have been ramping up their production and exports to other countries. As time goes on, however, these countries may begin to pick and choose to whom they sell such an increasingly precious commodity.

This trend is evident in Venezuela, a more mature oil-producing country, which, under the leadership of Hugo Chavez, has already begun to reduce exports to the United States.The Exxon Mobil suit against Venezuela is the latest, but far from the last jab in the sparring going on between America and Venezuela. The bad blood, combined with increased international competition for Venezuela's oil increases the possibility of a Venezuelan oil embargo on exports to the United States.

Russia has the potential to possess one of the most abundant sources of crude oil on the planet. But the tap-twisting that Russia has recently pulled with its natural gas exports strongly suggests it sees its energy as a tool for gaining geopolitical power, as the Europeans are discovering.

The Wildcard
Even though the Saud family and the United States have enjoyed a relatively stable relationship, rising tensions in the region and increasing Islamic militarism could potentially trigger another oil embargo such as in the 1970s, particularly if Israeli-Palestinian troubles remain unresolved. We can thus see both sides of the coin. On the one hand, Saudi Arabia could be the American bastion of supply over the next few decades; on the other, through its power in OPEC, it could increase the price of crude oil even more. The overthrow of the Saud family, dourly predicted for years, would in all likelihood be unfavorable to U.S. oil supplies.

So What’s the Solution?
The squeeze on supply is only getting worse as the ascendant economies of China and India ramp up their demands for oil. At some tipping point, exporters unfriendly toward the United States will be happy to sell their oil to these growing markets. So where can the United States expect to turn instead?

What about the former Soviet Republic countries (the “-stans”)? Offsetting their vast potential and anti-Russian leanings is their geographical proximity to China, which is increasingly eager to exert as well as secure power. In any case, the possibility of finding a new significant reserve of light oil in most of these countries is unlikely.

There is, however, a much better solution – a proven and plentiful resource in an area friendly to the United States and in geographical proximity: the heavy oil fields in Alberta. While available in abundant supply, it is not without its challenges. That’s because heavy oil is more viscous, more dense (low API gravity), and often has contaminants such as sulfur; it's usually purchased at a discount to light oil due to its increased cost to pump and transport.
The United States already uses heavy oil in some of its refineries, and increasingly so:

Canada could ramp up its heavy oil production relatively easily, since the reserves in the country have already been proven. Transportation of this fuel is also less of an issue since Canada is quite stable politically, and can easily construct new pipelines or twin their existing ones (to reduce the costs) to pump much-needed crude oil into the United States – provided the price is right.

The Opportunity
Why is heavy oil suddenly so much more popular? The main reason is that the demand for heavy oil from the refineries around the world is beginning to outstrip the supply of heavy oil. BP Inc, for example, is investing $3.8 billion to upgrade its Whiting Heavy Oil Refinery outside Chicago, in large part to handle more heavy oil from Canada; and countries like China, India, Syria and Saudi Arabia are also beginning to build more heavy oil refineries.

This shows that the United States is beginning to use more heavy oil in its refineries, and is willing to pay a premium for a source of oil in a safe and friendly country.

So how do we profit? A logical answer would be to buy into prospective heavy oil companies, those that are cheap producers with good potential upside. Unfortunately, with oil prices well over $130 per barrel, most producers come with a very high premium attached. These companies will begin to correct once they are unable to economically replace their current production with new reserves or when the impending American recession gains traction.

Therefore, we should be looking for well-cashed-up companies that can withstand difficult capital market conditions and has their operations in a jurisdiction that stands to benefit from America’s crude oil shortfall, and increasing reliance on heavy oil.

The world of energy is changing forever… and not just the prices at the pump.
Peak Oil is changing everything about the energy markets… including where to invest. But where do you look for investing inspiration in this brave new world of Peak Oil?

Well, the editors at Casey’s Energy Speculator have put together a special five-part course, Understanding Peak Oil, and How to Profit From It. In it, you’ll learn all about the phenomenon that’s reshaping the world. And you’ll also discover the best places to make money in this quickly changing energy market. The course is absolutely free. It couldn’t be easier to get started. Simply click here now, and you’ll be on your way in seconds.

Have a good one.


Uranium: Signs of life!

Uranium Chart 12 July 2008
Chart courtesy of

One of our readers alerted us to slight increase in the spot price of uranium today with The UX Consulting Company and Tradetech putting the price at $60/lb. Although we should be focused on the long-term price we are grateful for these small mercies!

Scanning the horizon we came across an article on by Peter Grandich, which is well worth reading, and so we pulled this snippet from the article about uranium:

Uranium –
To those who once had such high hopes only to be dashed in the recent sharp correction, try to regain your confidence—nuclear power just has to be a primary source of energy going forward. It’s pretty clear now that fossil fuel is a “dinosaur.” We won’t likely see a sharp run-up, but prices can make a new high in the next 12-24 months and the uranium players who more than survive the recent swoon are likely to get another good at-bat.

A new high in the next 12-24 months would certainly go a long way to repairing our portfolio as we decided some time ago to grin and bear it and see it through. However, although we remain optimistic we do need to see some more positive signs of uranium stock price increases before we would dare to venture into the water again with our hard earned cash. When we look at the charts for Denison, for example, we can see that this stock has tried three times to breakout above the $9.00 level only to fall back again. But, we are encouraged to see that this stock appears to have bottomed at around the $6.25 level and is currently trading at $8.00. So don’t be put off by our unwillingness to invest at the moment as we can be over cautious at times.

Over on the futures market the NYMEX has uranium at $60/lb for July 2008 delivery and $62/lb for December 2008 delivery. It’s a thinly traded market and doesn’t really give us a lot to go on, but one day it will mature.

Have a good one.

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Biofuels: United Kingdom having second thoughts!

Ruth Kelly
Ruth Kelly

The United Kingdom is at last becoming aware of the dangers and the downside to the production of Biofuels.

Professor Ed Gallagher, head of the Renewable Fuels Agency and his team of experts have produced a report looking at the impact of energy policy on land use which concludes that Biofuels should be introduced more slowly due their damaging effect on forestry and agriculture.

We regret that the report, in our humble opinion does not go far enough and state the concept of burning food is an idea that belongs with the Muppets.

Ms Kelly, the government spokesperson stated that:

"that biofuels can have an important role in reducing carbon emissions and combating climate change and that we need to proceed cautiously until we can be certain that their expanded growth and use maximises the benefits and minimises the risks to our world."

The opposition party, the Conservatives, said policy had to change “right now and that mere slowdown of the targets would not address problems.”

The Liberal Democrat transport spokesman Norman Baker added:

"It has done nothing to close the loopholes which support unsustainable and inefficient US corn-based ethanol."

Well, maybe they are not all Muppets in Westminster which gives us some hope for the future.

Never mind the US, the Brits should be taking their lead from France and pushing ahead with a nuclear programme of sufficient capacity to meet 80% plus of the United kingdoms energy needs. This is pussy foot policy by politicians who dare not grasp the problem and make a clear determined decision to resolve it. The clock is ticking and Britain has about seven years before the majority of its nuclear power plants are de-commissioned. By not replacing these plants, which means starting construction now, Britain runs the risk of entering a period of rotational black outs in 2015. Fiddling while Rome burns, no, fiddling while Britain shivers!

To read this article in full and also to watch a short video clip of Ruth Kelly delivering her speech please click this link.

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Coal-fired power station blocked!

Judge Thelma Wyatt Cummings Moore
The construction of a new coal-fired power station has been blocked by the US state of Georgia, as the issue of carbon dioxide emissions becomes a hot topic.

This could well set a precedent for future coal fired power plants as the judge, Fulton County Superior Court Judge Thelma Wyatt Cummings Moore, cited a decision by the Supreme Court ruling recognising CO2 as a pollutant, before putting a halt to this project.

Dynegy will no doubt challenge this ruling as they are the largest coal plant developer in the US and this ruling could jeopardise the construction of future plants.

Bruce Nilles, director of campaign group the Sierra Club, said:

"Coal-fired power plants emit more than 30% of our nation's global warming pollution, thanks to this decision, coal plants across the country will be forced to live up to their clean coal rhetoric."

Scott Segal, director of the Electric Reliability Coordinating Council, a Washington based industry organisation, said:

The judge's assumptions "do not square with the facts or the law the Georgia state court has written an opinion fully in uncharted territory,"

So it looks as though we are in for a legal tussle before we get a resolution to this issue, but the fact that someone has opposed and stopped a coal-fired power plant must bode well for nuclear power.

To read the whole article please click here.

If you are new to this web site and wish to receive our free newsletter regarding investment in uranium stocks and updates regarding uranium, then please click here to subscribe.

PS: The spot price of uranium has clicked up $2.00, which is nice to see but it is the long-term price that is important.

Uranium Chart 03 July 2008

Queensland Resources Council for lifting a ban on uranium mining

Croc 02 July 2008

Michael Roche, chief executive of The Queensland Resources Council has argued today that:

“Lifting a ban on uranium mining could expand the state's economy and through its use in nuclear power generation help to avoid huge greenhouse gas emissions.”

Three cheers for this man!

Mr Roche goes on to sat that:

“It's estimated that Queensland uranium exported for nuclear power generation could in 2030 alone avoid the annual production of some 120 million (metric) tonnes of carbon dioxide, this is equivalent to around 70 per cent of Queensland's 2006 greenhouse gas emissions”

A Deloitte Insight Economics’ report has stated that:

“Australia has 36 per cent of the assured global uranium resources in ground and was the source of 19 per cent of primary global supply in 2006, with known deposits in Queensland of 135 million pounds estimated to be worth $US12.2 billion at a $US90 per pound spot price, according to Deloitte's report.”

Well we all know that the spot price for uranium is not $US90/lb but the long-term price is, so the figure of $US12.2 billion of uranium in the ground, that most of the world would happily pay for, has got to get them thinking.

As regular readers will know we have only two companies on the ‘buy’ list at the moment and one of them is Laramide Resources Limited where it flagship asset, the Westmoreland Uranium Project is situated in Queensland. They have also found some gold there so it could be very interesting if they ever get the green light.

Laramide Resources Limited has a market capitalization of $287 million, a P/E ratio of 187 with 59 million shares outstanding, Laramide closed recently at $4.88 per share and trades on the Toronto Stock Exchange under the symbol of LAM.

If you are new to this web site and wish to receive our free newsletter regarding investment in uranium stocks and updates regarding uranium, then please click here to subscribe.

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Khan Resources Incorporated: Up 23.81% Today!

Khan Chart 01 July 2008

Today Khan Resources Incorporated put on $0.20 to close at $1.04 on turnover of 163,000 shares traded. As we are not aware of any new developments we can only imagine that this move is part of the sporadic buying that we have witnessed over the last few months in the uranium sector.

On the 19th June 2008 the company had this to say about their interest in Western ProspectorGroup:

Khan Resources Inc. (TSX: KRI) announced today that its offer (the "Offer") to acquire all of the outstanding common shares of Western ProspectorGroup Ltd. for 0.685 of a Khan common share for each common share of Western Prospectorwill be extended to 8:00 p.m. (Toronto time) on Tuesday, July 15, 2008.With this extension, Khan's Offer will remain outstanding for 64 days. Not only does Khan believe that this gives Western Prospector and its board of directors more than adequate time to consider the Offer and any alternative transactions, but this also provides Western ProspectorShareholders with more than the 60 days requested by Western Prospector in its shareholder rights plan.

Although this does not explain today’s move as this news piece is a couple of weeks old.

Taking a quick look at the chart we can glean the following:

A large jump in the stock price on a moderate increase in volume, nothing dramatic here. The stock price has now moved above the 50dma, which is a start. A nice crossover by the MACD, which should be positive for the stock going forward.

Again we are not complaining and are extremely grateful for any advance in price of all uranium stocks.

We will continue to look for value and bargain buys in readiness of the upswing. We are also taking a look at the possibility of trading a few options in this sector in order to capture a little leverage when a uranium stock gets its turn in the sun. However the stocks are thinly traded as we all know and the trading in the options arena is also pretty thin, but we will see if we can uncover the odd profitable trade.

Have a good one.

If you are new to this web site and wish to receive our free newsletter regarding investment in uranium stocks and updates regarding uranium, then please click here to subscribe.


We have just completed a profitable options trade in our gold trading account which you might want to see, if so, please click this link and we have also opened a position in our silver trading account which you also might want to see, if so, please click this link.

Potash: A Readers View!

Potash 30 June 2008

From time to time we publish other peoples views in an attempt to add some balance to the debate regarding investment opportunities. Today’s article is about Potash as an investment sector and the companies that have caught this writer’s attention. This is the opinion of the author and not uranium stocks.

Many Potash stocks are looking increasingly oversold at these levels. While it is true that these juniors have had a tremendous runs this year, it is equally true that the demand for the product they are exploring for isn't going away.... and not one Junior has started to drill yet.

Many Potash investors were also Uranium investors. Those who remember what key event caused Uranium equities to go ballistic will point to Water, or flooding of Cameco's Cigar Lake mine as being the major catalyst for a huge surge in both equity pricing as well as the commodity pricing.

I wonder if water will again be a major catalyst, this time for the Potash juniors? Last night, the Globe published in their Blog Area (I guess we're not at a point yet in North America where food shortages are worthy of front page news) a piece entitled; After the flood: A fertiliser boom by David Berman
I highly recommend anyone who has any sort of ag/fert stocks should carefully read this, as the author points out some very near-term facts and potential happenings which may impact for portfolio.

Quick Hits:

- Paul Matysek President and CEO of Potash One [KCL.T] (Current leader of our Potash Pack) will speak on BNN this AM.
- US Potash Corp. [TEL.V] yesterday closed its $5 million private placement.

Best CDN & US Potash plays

KCL.T MADE THE JUMP TO TSX. Consider them the leader in the Junior space for which others should follow

PON.V Potash targets in the Saskatchewan potash Basin. Friedland - Lundin factor. Backed by Billionaires - Lundin and Friedland. The momentum appears to be unstoppable!

TEL.V It turns out that their acquisition of US Potash corp didn't just land them the best Potash prospective properties in the United States; they also got THE TOP Potash Exploration Geologist in the US (top 2 or 3 in the world), and the President of the American Landman Association. Top properties + Rock Star Geologist + #1 Landman = 100% Winner. As a side note, they have 3 million lbs of Uranium as well

RAY.V Located in the prolific Saskatchewan Potash district. Just put out a 43-101 on their potential billion-dollar resource!
Long KCL - Canadian Potash Exploration play
Long PON - Canadian Potash Exploration play
Long RAY - Canadian Potash Exploration play
Long TEL - American Potash Exploration play
What Bubble???

With prices set on a yearly basis (not real time, not daily, not weekly, or even monthly...YES YEARLY!), there is literally nothing that can bring the current high Potash prices down for the next 11 months! In fact, last week, CIBC put out a report, which forecast the price of Potash to double again next year. Potash currently trades at $450 a tonne. Before potash was discovered in New Mexico, Germany was the world's only supplier. In December 1915, when World War I cut trade between the United States and Germany, potash prices jumped from $35 per tonne to more than $500. In today's money, that's the equivalent of more than $10,571 per tonne!

Please feel free to add your own thoughts to the above commentary.

Have a good one.

If you are new to this web site and wish to receive our free newsletter regarding investment in uranium stocks and updates regarding uranium, then please click here to subscribe. Alternatively if you wish to divest your investments in the energy sector then please take a look at Doug Casey’s Energy Speculator by clicking this link.


Aurora Energy Resources Incorporated: Up 10.67% today!

On turnover of 867,000 shares Aurora gained $0.38 to close at $3.94. It is hard to see just what contributed to this move, as there has been no real news that we are aware of released today.

The last news we saw was about the establishment of a new panel that will give community representatives from coastal Labrador input into project planning and key environmental work, but that was a week ago.

Maybe it was just one of those days when it was Aurora’s turn in the sun for the bargain hunters slowly re-positioning themselves in this market sector. Uranium One added about 4%, Ur-Energy added about 3% and Laramide added about 5%.

Not complaining just a bit puzzled.

Have a good one.

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Uranium-stocks: Portfolio Update 23 June 2008

Uranium Chart 23 June 2008

This chart is courtesy of

A month ago it looked promising as there were signs of a small rally forming however this appears to have dissipated as investors used the higher prices to cut their loses and return their cash to the sidelines. We had hoped to bring you more ‘buy’ signals but have decided to remain cautious until a clearer picture emerges.

Cameco Corporation – Watch
Cameco was trading at $42.48 when we last updated the portfolio and closed at $37.90 on Friday, not so good progress by this sectors heavyweight, however it is holding up better than most uranium stocks.

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 has traded as low as $0.15 over recent months and just when we are beginning to despair it puts in a terrific run to double in just over a month and closed on Friday at $0.34. However, looking at the chart the RSI suggests that it is now overbought so expect a breather.

RPT Chart 22 June 2008

Uranium Participation Limited – Hold
U was trading at C$9.60 last month but as of yesterday it was trading at $9.05. We bought at $11.97 on 21 November 2006 so U is still showing a 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 has traded as high as $2.87, however it closed at $2.15 yesterday, a slight improvement on last month. The news flow has been good so we will continue to hold this stock in expectation that it will do well as this market sector regains its popularity with investors.

Crosshair Exploration and Mining Corporation Watch
We continue to watch CXX. The stock was trading at about $0.82 last month and has seen some dramatic moves in both directions; it closed yesterday at $0.76. 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 remains as a puzzle to us. Although we do not own this stock it remains tempting at these price levels and we may be looking at a gift horse in the mouth. We do need to see some signs of improvement before investing Crosshair.

Laramide Resources Limited – Buy
This stock was trading for about $4.67 at the time of the last update it and closed yesterday at $3.85. We bought at $5.78 on the 28 July 2006 so we are still in the red with this one. 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. In the last update we said that Laramide might have formed a bottom at $3.00 so hopefully we can look forward to better things from this stock, when the market in general improves.

Mega Uranium Limited – Buy
We bought MEGA at around $4.0 on 27 July 2006. MGA was trading at $2.36 last month but has since dropped back to close at $2.10 yesterday, having traded as low as $1.79 recently. Hopefully Mega has found some support at $2.00, and can go on from here to higher ground.

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 having a torrid time trading as low as $0.79 before closing yesterday at $0.87. Here is an interesting news bite that we spotted the other day:

ALMATY, KAZAKHSTAN, June 19 /CNW/ - JSC Compass Asset Management
("Compass") announces that, through investment funds that it manages, it has acquired control of an aggregate of 5,669,100 common shares of Khan Resources Inc. ("Khan Resources"), representing approximately 10.47% of the presently issued and outstanding common shares of Khan Resources. The common shares were acquired in multiple trades through the facilities of the Toronto Stock Exchange. Compass acquired control of the common shares through its managed funds for investment purposes and may, depending on market and other
conditions, increase or decrease the number of common shares over which it exercises control through future purchases and sales. Khan Resources is listed
on the Toronto Stock Exchange under the symbol "KRI".

About Compass

Compass is one of Kazakhstan's leading asset management / hedge fund companies and is located at 240v Furmanova Street, Almaty Kazakhstan, 050059.

We have yet to decide just what this means so we will keep an eye on it for now.

Aurora Energy Resources - Hold
We bought Aurora on the 5th March 2007 at $14.17 and it is now trading at $3.62, having traded as low as $3.33. Aurora has implemented an outreach programme in an attempt to convey the benefits of their planned mining activities to the community. A resolution to the issues surrounding the granting of a mining license is desperately critical to their activities in the Central Mineral Belt, so lets hope that they are successful.

Strathmore Mineral Corporation - Hold
We bought STM on the 14th April 2007 at $4.96 and it is currently trading at $1.51, having been as low as $1.40, which is a very disappointing performance indeed. STM’s mini rally petered out as investors sold into what was a small rally.

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. In the last update we asked is this was the low for URE as it was down to $1.78, well it could have been as this stock moved up to $2.15, however this surge was also short-lived as it closed yesterday at $1.95.

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 to $6.85, before rallying again to close at $8.59 last month. Yesterday Denison closed at $7.44, another uranium stock struggling to find some traction.

The longer-term price remains strong although lower at $90/lb but the spot price continues to drift lower as TradeTech reports the uranium spot price trading at $59/lb and UX Consulting Company has it at $57/lb.

We hope that the importance of the spot price diminishes and the focus of attention becomes the long-term price, as this is where the lion’s share of the trade in uranium is conducted.

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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Laramide strikes gold at Westmoreland.


Better know as a uranium explorer Laramide Resources Limited have today released drill results for 28 drill holes for gold assays for their Westmoreland property. The results are summarized as follows:

These results included drill hole WDD08-023 which intersected 4 metres at 1.30g/t Au from 38 metres and 19 metres at 1.09g/t Au from 54 metres. All 28 drill holes were drilled with either NQ or HQ core into The Garee Lens, which forms part of the Redtree Deposit at The Westmoreland project. Mineralisation within the Garee lens is flat lying and hence the true width of mineralisation is generally between 75 % and 100 % of the intersection within the drill holes.

To see the data in tabulated form please click this link.

The VP for Exploration, Peter Mullens, said the following:

“Historically, gold assays were undertaken selectively and assumed that gold was associated with high grade uranium and also in steep structures near the dyke. Hence, gold assaying has not been systematic. The tabled results are not all associated with high grade uranium, in fact in most cases the U3O8 is less than 0.1% and frequently less than 0.02%”.

We draw your attention to this snippet;

“the gold mineralisation appears to be partly at least spatially separate from high grade uranium mineralization. To date it is not clear what is controlling the gold mineralisation; however the mineralisation could be distal to uranium. This opens up the possibility of a separate substantial gold deposit

Well we originally invested our funds in Laramide as a uranium play and we now have the possibility of a gold play – stranger things have happened! Drilling is on going with 3 drill rigs so we guess it now a case of watch this space.

Laramide Resources Limited has a market capitalization of $223 million, a P/E ratio of 145 with 59 million shares outstanding, Laramide closed today at $3.80. These results came out at the close of business so we will see tomorrow just what effect this news will have on the stock price.

Laramide trades on the Toronto Stock Exchange under the symbol of LAM.

If you are new to this web site and wish to receive our free newsletter regarding investment in uranium stocks and updates regarding uranium, then please click here to subscribe.

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