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A Readers View On Uranium: Where To Next?

Uranium is a great investment! Its fundamentals are second to none with supply demand imbalances likely to extend well into next decade. New users continue to roll up with latecomers the US announcing their first application for a nuclear reactor since 1973. The government is expecting 29 more applications for reactors at 20 different sites. The Indian Express ran an article on October 23rd addressing supply issues right now! “Faced with an acute shortage of uranium to run existing power stations, the Nuclear Power Corporation of India Ltd has advanced its maintenance schedule and started shutting down individual power units. Usually, these units are shut down in a staggered manner but this time they have been bunched together so that authorities get time to arrange for uranium supplies.” So why have uranium stocks been punished lately?
The first interesting aspect is that these stocks are currently at the whim of the general market. This was painfully evident last August. I wonder if this is more marked because of hedge funds that have bought into the sector. When the market drops they become forced sellers to cover margins. At some point in this bull, uraniums will diverge from general market behavior and march to their own drum.

The second significant event that took place earlier this year was the US department of energy announcing it may sell some of its stockpile. In the end they were only talking about 520 000lbs but it was probably enough to serve as a reminder that our trusty governments can and do meddle in the markets. Uranium spot price saw its first downside in many years however the important long term price remained fixed at $95.

The current market conditions remain dicey with U.S. and European governments flooding the homeland with paper money. It will be interesting to see if they can avoid a crash in stocks. If they can’t there may be another buying opportunity similar to August but when the dust settles people will realise that hard assets like uranium, golds and silvers will be king.

The last commodities bull market during the seventies into early 1980 had two phases. During the second phase gold went from $101 to $873 on January 21st 1980 for a gain of 764%. Silver rose from $3.80 to $50.36 for a whopping gain of 1225%!!! Recent market events make me suspicious that the first stage of our commodity bull market is either over or very close to it. If stage two is upon us it may be wise to stock up on uranium, gold and silver shares, be patient and hold on to your hats!

The above article was written by a reader of The Uranium Stocks Newsletter, Paul Trevethan. If you have an article that you would like published on the website then please email it to

The Team In Travel Mode

Team In Travel Mode

Bob and Sam Kirtley, along with some other members of the team that run and are now heading into travel mode for next few weeks.

The trip is part business, part pleasure and we will be accompanied by a laptop the whole while and so will do our best to answer all enquires and provide commentary on the markets whilst on the move. This may explain if articles are published outside of their usual pattern.

Uranium Stocks On The Move Again

After enduring a large correction in the uranium spot price, and an even larger pullback in uranium stocks, things appear to be on the move again in this sector.

Uranium Stocks On The Move Again: U

Uranium Participation is moving upwards now, reflecting the recent rise in the uranium spot prices, which has risen to $93/lb this week.

As those of you who are familiar with the company will know, Uranium Participation is not a uranium mining stock or uranium exploration stock, but a fund of uranium metal. Uranium Participation simply holds physical uranium and so tends to move up and down with the uranium price. This offers investors exposure to the uranium market without the risks of mining or exploration and it has been a BUY in our portfolio for some time.

Uranium Stocks On The Move Again: AXU

One of the quickest recoveries has been made by Aurora Energy Resources, which has enjoyed a sharp rally of over $5 to near $17. This stock is also a BUY in our portfolio and is currently up over 13%. Aurora has a world class project in the Central Mineral Belt in Labrador, Canada and the good fundamentals of this property will carry Aurora higher, especially with higher uranium prices.

Uranium Stocks On The Move Again: Mega

Mega Uranium was severely punished in this correction and the credit crunch, falling over 66% from its highs of around $9.00 in April. But this uranium stock is now on the road to recovery having nearly doubled from its low and its up 22.75% in our uranium stocks portfolio.

Uranium Stocks On The Move Again: LAM

One final example to show the turnaround in the uranium market is Laramide Resources, which has climbed 106% from its low! This stock is a BUY in our portfolio and it is currently showing a paper profit of 56%.

We first thought the turnaround had begun on August 28th and the recent behaviour of the market confirms this view.

This was a correction, a severe correction. We have seen similar corrections in this uranium bull market before, but this was particularly sharp as we had the added affect of the credit crunch where traders and investors were selling literally anything, regardless of fundamentals to generate cash to pay margin calls.

On August 21st in our portfolio update, we signalled BUY on the above stocks and amidst the carnage of the credit crunch and the uranium market correction we said, “we still expect LAM to bounce back from these levels” and described Uranium Participation as “at a discount” and Aurora appeared to us to be “severely oversold”.

We hope that those of you who were brave enough to hold throughout the summer or add to your holdings are now enjoying the recovery. Throughout the summer we were urging our readers to hold through the chaos and to buy at those cheap prices. In hindsight we appear to have made a good call there, and we are still bullish on uranium and uranium stocks, maintaining our target price of $200/lb for yellow cake.

Many uranium stocks will benefit greatly from higher uranium prices, and some projects will still prove to be extremely profitable at current price levels. Stay updated on the uranium market and informed on uranium stocks by subscribing to our FREE Uranium Stocks Newsletter, to subscribe simply click here and enter your email.

Uranium: $110/lb for December delivery

One of our alert readers has just informed us that the price of uranium for December delivery has jumped from $98/lb to $110/lb.

So, first prize goes to Warwick who spotted the change on the NYMEX almost as instantly as it happened.

This web site now has 3590 subscribers and about 13,000 readers who regularly send us interesting snippets of information. Now don’t go too mad on this news as the price for delivery throughout 2008 is still around $81/lb, but it is nice to see the occasional spike in the price especially on a day like this when uranium stocks are taking a bit of a battering.

Hang on in there and sleep tight.

Uranium now at $93/lb!

We are now of the opinion that the spot price of uranium has moved again and now stands at $93/lb. The uranium market is so small that just getting the data and being able to track the price of uranium is arduous to say the least.

The powers that be publish their data at certain times and we all wait with baited breath to see what it is. This web site has a number of well informed readers that tip us off with numerous bits of information along with the price of uranium as and when the price changes, so we are at times ahead of the general press thanks to them.

The spot price will make the headlines and have an effect on trader sentiment but please bear in mind that it is the long-term price of uranium that we need to watch. However this is still good news and good news should make for great day when the US and Canadian stock markets open.

Once again many thanks for all your input which has helped to put this web site in pole position on Google when we enter uranium stocks.

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Strateco Resources: Up 40% Since Our BUY Signal 4 Months Ago

On the 9th of July we signalled a BUY on Strateco Resources and in the four months since we signalled that BUY and added Strateco Resources Inc to our uranium stocks portfolio, Strateco has risen 40%.

Strateco Resources: Up 40% Since Our BUY Signal 4 Months Ago

We had been looking at Strateco for some time before we signalled a BUY, but we were waiting for a pullback to purchase shares at a discount. The pullback came in the summer and it was in the middle of the summer doldrums that we chose to buy this stock at $2.32, after it had fallen from $4.00, a drop of 42%.

However we did not pick the exact bottom on this one as Strateco Resources went on to fall down to below $1.50. We are fully aware of the volatility of the uranium market and its stocks so we were not panicked into selling by this further drop as we were confident that Strateco Resources would make a recovery as this is a good company with decent uranium projects which will prove ever more valuable as uranium prices continue to rise.

Our patience appears to have paid off as Strateco Resources closed trading on Friday at $3.23 and this means we are sitting on a paper profit of roughly 40%. It could be a time to take some money off the table, but we are holding all of our uranium stocks. The correction in the uranium spot prices appears to be over as we have seen the uranium price rise to $80/lb, then to $84/lb and it now stands at $93/lb.

Strateco Resources is a uranium exploration company, with some interesting projects in Quebec, Cananda and it is now worth nearly $350 million. If you want to know more about Strateco Resources and why we bought it, please read our write up of the company just click here.

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

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Uranium: now at $90!

Just as the charts are being updated to reflect a price for uranium of $85/lb its ‘hold the front page time’ as the price could be even higher.

According to Bloomberg the price is $90/lb in an article by Yuriy Humber referring to TradeTech he writes:

Uranium oxide concentrate for immediate delivery, used to make fuel for nuclear power plants, rose to $90 a pound, from $84 at the end of last week, Denver-based pricing service TradeTech LLC said yesterday. The metal has jumped 20 percent in a month.

The advance ``gained momentum as news of production shortfalls made its way into the market,'' TradeTech said in a report. That ``prompted sellers to withdraw from the market.''

Well it should make for an interesting session today and a nice end to the week.

Should you wish to read the whole article then please click this LINK.

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Cigar Lake: 2011 at the earliest!

Cameco logo 30oct07
Cameco issued an upbeat report today covering the third quarter earnings etc, however as pointed out by one of our readers the delays continue.

We draw your attention to this quote in the report:

“As previously announced, completing the second shaft as a priority item and the delay in some remediation activities would set back the planned production start-up date from 2010 to 2011. We have now made the decision to complete this shaft prior to completion of some of the underground mine development program and some of the remediation activities are taking longer than anticipated. As a result, the production start-up date is now expected to be 2011, at the earliest. We will be able to provide a firmer production start-up date after the mine has been dewatered and the condition of the underground development has been assessed”.

As this problem has yet to be assessed after dewatering it is rather difficult to compile a detailed plan of what is required. Once the plan has been compiled then in can be set to a timeframe, which is called the schedule. The schedule requires an in-depth study and application of the resources required such labour, mechanical plant, power, finance, permits, etc. Then and only then are you in a position to give a start up date. Achieving that start-up date is another story as we stated in our article entitled: Flooded Mines: The Critical Factor for Uranium.

As investors in uranium stocks we cannot take our eye off Cameco however it could be some time, if ever, before we feel the effect of their production.

As we write Cameco’s stock is trading down 2.64% at $46.91 so the market is not too pleased with this news release. However, this is good news for the rest of the sector as most of them are trading in positive territory and some are experiencing double digit gains.

Food for thought!

Have a good one.

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Mega Uranium: A monster move of 17.72% in one day!

Mega logo 29oct07

Uranium stocks went into top gear yesterday to obliterate the Monday morning blues and Mega Uranium put in a monster performance with an advance of 17.72% for a gain of $0.76.

Turnover was up from Fridays half a million to just over two million shares traded for the day. There were many super performances by uranium stocks along with Mega’s, which must have put at least a small smile on the faces of the uranium bugs worldwide. Mega Uranium closed at $5.05, which is double what it was in the middle of August when the sell off was at its worst.

Mega Chart 29oct07

As we can see from this chart Mega Uranium is fighting back in great style. Although we could argue that the technical indicators have moved from the buy range and headed towards the top of the sell area we think that any breather could short lived. The reason being is that the spot price turned up three weeks ago and it is the spot price that grabs the headlines. In turn the good publicity provides a little more in the way of confidence to investors who are looking for a re-entry point.

Anyway, breather or not Mega Uranium is still a good buy in our opinion so roll on more Mondays like this one.

Have a good one.

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Uranium: Spot Price Up another $4.00 to $84/lb

Monday Morning Feeling Cartoon 29oct 07
That Monday morning feeling should be lightened a little by the news that the spot price for uranium is up again by $4/lb for increase of 5%. According to TradeTech LLC "Renewed buying interest on the part of speculators and hedge funds is contributing to the upward price pressure,"

The price of uranium has now ticked up over the last three weeks which is an encouraging sign and should bode well for those invested in uranium stocks. As always though keep an eye on the long-term uranium price and don’t go too mad on the weekly oscillations of the spot price. To repeat this is a very thin market, which can be pushed up or down by the immediate needs of an end user or the cash requirements of an investment fund.

Over in the futures corner the price for December delivery is $92/lb however for most of the remainder of 2008 the price is $81/lb.

Those of you who held on through the summer battering should be sleeping a little easier now.

Have a good one.

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