Uranium Sealed Bids Auctions: No Deal!

A quote from the Nuclear Market Review reported in this week’s issue:

“Two sellers that were evaluating bids in response to their auctions have concluded their evaluations and have decided not to sell at this time. “Both sellers preferred to make delivery in June while most bidders were seeking delivery for several months out.”

This statement is interesting and infuriating at the same time. Did the sellers back off because they wanted a June delivery as stated or did the bid price not meet their expectations? What were their expectations; $140? $150? $160? It brings into the spotlight the difference between ‘Stated Aims’ and ‘Real Aims’ the stated aim is a delivery issue and the real aim could be anything, that we the investors are not privy to, but we tend to think that it is a price issue. Opinions on a post card please! We have no wish to discredit the sellers in any way but the news has been slow to come out and on a ‘gut feel only’ basis it just does not feel right.

It is difficult to evaluate this almost non-event of a situation so we can only wait for the next auction to come along and give us an indication as to the spot price of uranium. The futures market is there as a guide but it is early days for the NYMEX, no doubt it will develop over time and become a useful indicator. According to Stock interview the current prices are June $136/lb, July $140/lb and December 2007 $154/lb.

The decision not to sell however is indicative of the power residing in the hands of the sellers and that they are able to negotiate from a position of strength being able to reject offers in the hope of receiving higher offers at a later date. This story will continue to roll with news, rumours, head fakes, et al, however we are still of the opinion that the demand for nuclear fuel has not disappeared and uranium will hit our long held prediction of $200/lb.

Have a good one.

Khan Resources Inc: An upside breakout!

Khan resources Incorporated would appear to have made an upside breakout over the last two weeks.



This uranium stock has been in a down trend since April 2007 until just recently when that trend was interrupted as Khan started to head north. Watching the stock action yesterday we noticed that Khan put on $0.20 for a gain of 4.33% in a single day, wonderful considering the sell off we have been through. Also worth noting is that the volume was not dramatically huge but a healthy 415,000 shares being traded.




Khan was trading above the $5.00 level in April and has since been savaged to hit a recent low of around $3.60. No doubt the volatility will continue through the summer until ‘normal’ trading begins in the fall.

In our opinion the savvy users of uranium are looking to lock in a reliable supply line before the competition gets the same idea. We have for example the take over of UraMin Incorporated by the French giant Areva. The others who for whatever reason were too slow to make a move for UraMin now have to find another enterprise that matches their needs. We doubt whether Khan Resources Incorporated can make it to the end of the year as an independent operator.

So, we will hang on to the stock that we have and may well buy more with the cash we have taken off the table by selling UraMin. However we are still researching other investment opportunities for our hard earned cash and will let you know as soon as we arrive at a decision.

Ur-Energy Inc: Up 16.0% in 6 days

Ur-Energy Incorporated was as low as $4.18 on the 13th June 2077 and this uranium stock closed yesterday at $4.85 for a gain of 16.0%.

We had joked that some of the less savvy investors miss took this stock for UraMin Incorporated and bought it by mistake but that is a little unfair, to say the least, on Ur-Energy Incorporated. On closer inspection we can see that the news flow recently has been pretty good starting with the Exploration, Development and Mine Operating Agreement with Target Exploration & Mining to form the Bootheel Project. The Bootheel Project covers a defined area of approximately 6,000 acres in the Shirley Basin area. This was quickly followed with the news that Ur-Energy had been selected to be included in the new S&P/TSX Global Mining Index, which was launched Tuesday, June 12, 2007. Finally we have news that Ur-Energy has new office space in Casper, Colorado as they increase their staff from around 10 to around 20 in order to order to advance and establish a production office. So, this management team is demonstrating that it is pro-active and is actually getting things done. Well done to all of them.




Taking a quick look at the chart we can see that Ur-Energy has been holding up pretty well while other uranium stocks have indeed suffered at the hands of profit takers. You will note that the technical indicators are all at or near to the top of their respective ranges, which suggest that it could have run a little ahead of itself. However it will be interesting to see if it can break out above its previous high and put in a decent rally. With all the take over rumours doing the rounds you never know!

Ur-Energy trades on the TSE under the symbol of URE.

UraMin Inc: Sell

As there appears to be a lack of interest from rival bidders we have decided to sell today and lock in a small profit before the price falls any further.

We bought this uranium stock on 15th May 2007 for $6.72 and have held it for six weeks, selling today for $8.36. This gives us a profit of $1.64 per share or a gain of 19.6%. Bearing in mind the time frame of just over one month we are happy to bank these profits and return the cash to the sidelines until next opportunity presents itself.

It appears to us to be a gamble either way, UraMin Incorporated could find a rival bidder and the game would be back on but we will just have to content ourselves we what we have.

Good luck if you are staying with it.

Laramide: Up 9.68% yesterday

Interest in Laramide Resources Limited was re-kindled yesterday following on from their announcement of a 30,000 Metre Drilling Programme in Australia.



As you already know Laramide controls a huge land package in northern Australia (680,000 hectares), which includes the Westmoreland Project in northwest Queensland. It is this project that will be the focal point of the companies exploration efforts with a 27,500-metre drilling programme scheduled to run through until December 2007. This is the same area where GRD Minproc recently undertook the scoping study. Laramide plans to utilize up to four drilling rigs for this drilling programme. So it is good to hear that they have gone out and purchased two Longyear LF 70 diamond drill rigs in order to supplement the mechanical plant requirements of this ambitious program. One drilling rig is already operational on the North East Westmoreland target with another drilling rig being prepared for action. This is really good news as we are constantly hearing about delays to programmes due to the fact that there are not enough drilling rigs around and everyone and his dog wants one today!

Taking a quick look at the chart we can see that the technical indicators hit the floor and LAM reacted with a nice bounce, we need to see it head north from here. This uranium stock is no longer a million miles from its 200 Day Moving Average which tells us that a lot of the froth has been blown away and to us this now represents a bargain basement entry point if you don’t already have Laramide in your portfolio. On the downside we also need to take into consideration that Queensland may never allow uranium mining in their state. Our bet is that they will sooner or later but in terms of a SWOT Analysis for this project the political implications probably top the list headed Threats!

Uranium: Up $1.00

All that anxious waiting and nail biting and uranium puts on a buck!

According to UXC Consulting their revised spot price now stands at $136/lb. However over at TradeTech they are still showing uranium at $138/lb. It seems to us that there is an opportunity here to buy from one organisation and sell to the other, but I suppose they are aware of their differing prices.

The good thing about UXC’s spot price is that it has not dropped by $10.00 or so, which would bring out the dancing bears who have been wrong all the way up and would no doubt rejoice in the reversal in the uranium price.

A quick look at the market and we can see a fair amount of green on the screen in Toronto with Laramide up 4% so far today. UraMin is up 1.3% so far today so will observe the action or lack of it for now.

Have a good one.

Fronteer Development Group: Up 7% today

Good news today when the company announced a 53% increase over last years estimate at the Agi Dagi and Kirazli deposits in Turkey, which is improving as a gold investment.

The new combined resource estimate is now up to 1.5 million ounces of gold with 9.1 million ounces of silver (measured + indicated), when inferred resources are included the overall gold equivalent resource is 3.5 million ounces. Dr Mark O’Dea says the deposits are still growing and are located at or near the surface, which will help to keep the mining costs fairly low.

Aurora Energy Resources have recently commenced a major drilling programme, which has helped to push their stock price higher today, and as Fronteer owns almost half of Aurora then they benefit from any good news emanating from Aurora.

Fronteer is now a gold investment with a uranium kicker and I guess we should transfer this stock to the Gold-prices web site but as it started life on this web site we will keep here.

UraMin Inc: Where are the rival bidders?

We made a few calls this morning to our contacts in London as UraMin is also traded on the London Stock Exchange.

We thought that Uranium One who also have interests in Africa might be interested as gaining control of UraMin Incorporated might offer ‘economies of scale’ and all the other usual benefits that predators trot out when they are in hunting mode. But alas we have nothing to report only the usual uncorroborated rumblings that emanate from the office coffee machines. At a guess we would have put Rio Tinto as favourites to challenge if not out bid Areva. However, you have to hand it to the French they are displaying more vision than the others by making this move to secure uranium for their future needs.

The question now is: Should we cash in and go or stick around to see what develops? Being of a curious nature will we stick around, as we are by no means certain that it is all over just yet?

Scanning the list of uranium stocks it was nice to see most of them dabbled in green for a pleasant change. We also noted that that Ur-Energy (TSE:URE) was up 8.26% and wondered whether it was up on merit or because it sounds like UraMin and someone has hit the wrong button! If it falls back today someone, somewhere has just lost his Christmas bonus.

Have a good one!

UraMin Inc: Bid $7.75 from Areva

According to the TSX UraMin Incorporated have received a bid from Areva to acquire the company for through a cash offer of $7.75 per share.

This offer represents a premium of 21% over UraMin 20-day average share price. The UraMin Board of Directors are fully supportive of the bid and Lock-up agreements in respect of approximately 25% of shares are now in place.

Well it now looks like a done deal so the excitement of a battle with rival suitors is not to be – shame, we have just re-stocked the drinks cabinet.

So where does that leave us? Just to recap we bought into UraMin on the 15th May 2007 for $6.72 so we have a profit of $1.03 or a gain of 15% in 4 weeks.

As one of our readers has just pointed out we are not here to fall in love with any particular stock we are here to make money and 15% in 1 month will have to do. However, this does look like a scoop for Areva as we thought UraMin was worth a lot more.

Uranium-stocks: Quotes of the Week

An interesting quote from Paul Van Eeden who said that uranium was over valued by a factor of three and uranium stocks were over valued by a factor of thirty.

Paul was being interviewed on BNN, formally ROBtv a Canadian business television programme, on Wednesday 13th June 2007, just click here if you want to catch the whole interview.

As you know we are rather bullish here at uranium-stocks so Paul helps to balance the debate by being brave enough to state his views on national TV.

Please drop us a line and tell us what you think.

The second quote of this week can be found in the British newspaper ‘The Independent’ published on Thursday 14th June 2007, which lead with an article entitled: “A World Without Oil” and in the body of the article on the second page it says this:

“BP’s Statistical Review is the most widely used estimate of world oil reserves but as Dr Campbell points out it is only a summary of highly political estimates supplied by governments and oil companies.”

As Dr Campbell explains: “When I was the boss of an oil company I would never tell the truth. Its not part of the game.”



Dr Campbell is a former chief geologist and vice president at a number of oil companies including BP, Shell, Fina, Exxon and ChevronTexaco.

If we take the above as being wide spread then all of our analysis that is based on their data is suspect at best and absolutely useless at worst. So when you are pouring through this sort of data please bear in mind that it is what we don’t know that will affect the future and you will have to use your imagination and build those thoughts into your investment decisions.

If you have spotted a few good ones please feel free to send them in - Thanks.