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Uranium: Queensland and WA to be mined?

Paladin Resources logo 10sep07

Australia’s biggest selling daily newspaper The Herald Sun carries an interesting interview with John Borshoff, the Chief Executive of Paladin Resources.

According to this report he told ABC TV that the increase in uranium price would continue on its upward path.

“I think the dynamic of the volatility is a five-year, almost continuous rise,'' he said. “I foresee it will surpass the peaks within 12 to 15 months.''

Good news for all uranium bugs and a little further he goes on to say:

“It was “certain'' it would be mining uranium out of Australia.

“As sure as today is Sunday, we will be mining uranium out of Australia, out of the states of Queensland and Western Australia,''
he said.

We are aware that these are the words of just one man and the political barriers that exist have still to be negotiated and resolved to the satisfaction of the Australian people. Having paid around $1.2 billion for Summit Resources, Paladin have predicated a huge investment on the uranium mining situation experiencing a little relaxation thereby allowing Queensland and WA to participate the nuclear energy boom.

On the 27th July 2006 we posted an article entitled ‘Mega Uranium A place in the sun’ in which we said:

Mega Uranium logo 10sep07

’ My bet is that they won’t let politics get in the way of a good money spinning deal and when the go-ahead arrives for uranium mining to commence, there will be some frantic action for those mining companies who already have a place in the sun.’

We still think the same, that the day is not too far ahead when these two States open the door to the uranium mining industry.

Russia signs uranium agreement with Australia

Putin 07sep07
One of our readers in New Zealand alerted us this article, which she spotted on tvnz. This news had been trailed on many other news outlets but never the less it does raise some interesting questions.

To quote the report:

“Australian Prime Minister John Howard and Russian President Vladimir Putin have signed a deal for Australia to sell uranium to Russia.

The two leaders signed the deal after talks in Howard's Sydney office on Friday, ahead of a joint press conference.

Putin, the first Russian leader to visit Australia, flew in to Sydney on Friday morning to attend the APEC summit of world leaders.”

Our first thought is just where is this uranium coming from, the existing three mines or to meet the demand will there be a relaxation of the three mine ruling thus allowing uranium mining activity to expand. If so this can only be good news for the like of Mega Uranium, Laramide et al.

Russia has done well to complete this deal and secure a supply of uranium for its nuclear energy needs. The question we have is how long will it be before other countries wake up to the nuclear future and beat a path to Australia’s door looking to do the same.

We see it as been difficult for Australia to refuse such requests. There is the political and trading relationships with other countries to consider and the income that Australia would generate is also not be sneezed at. The same goes for New Zealand.

Have a good one.

Crosshair Exploration and Mining Corporation: No sign of recovery!

Crosshair logo 05sep07
It is disappointing for the holders of this uranium stock, as there as yet appears to be no signs of recovery for one of this industries favourate uranium plays.

The chart tells us everything, from a high of $4.00 to $1.23 for a fall of some 70%. Other stocks in this sector have formed a bottom and would appear to be on the road to recovery. Crosshair has hit the bottom but maybe now we will see some consolidation at these low price levels before confidence returns to lift this stock back to its former glory.

Crosshair chart 05sep07

We have traded this stock in the past but are reluctant even at these prices to make a purchase. Crosshair will remain on the Watch List until we see some signs confirming that it has indeed stabilised and can head higher.

Uranium: Spot price $85/lb

Uranium Spot Price 04sep07

The uranium spot price continues to drift downwards to record a drop of $10/lb.

This data is brought to us courtesy of stockinterview who based their report on Friday’s issue of Nuclear Market Review compiled by TradeTech. If you can find the time please visit both of these web sites they are a mine of information.

To quote the editor of Nuclear Market Review, Treva Klingbiel,

“This decrease in the price is largely due to the presence throughout the month of sellers driven by cash requirements, such as the US Department of Energy (DOE).”

Please forgive us for being sarcastic but it would be true to form for a government department to find the bottom of the market and then make a sale. This reminds us of the ‘prudent’ British Chancellor, Gordon Brown who managed to find the bottom of the gold market before selling most of Britain’s gold reserves in a series of pre-announced auctions.

As a headline this is bad news however the long-term indicator remains unchanged at $95/lb. To us this long-term indicator is far important than spot price, which is subject to the daily knee jerk actions of all and sundry. As we have said previously the price has swung like a pendulum and is now the lowest it will be for the remainder of this year, in our humble opinion.

The communiqué goes on to say:

“However, long-term fundamentals still point to uranium supply shortages, with difficulties and hurdles ever present in the development and permitting stages for uranium mining companies.”

Uranium stocks may well be sold off today on the back of this news so for us it will be a case of take it on the chin, hold on tight and look for the odd bargain.

UraMin Mark Two: Niger Uranium

Niger Map 03sep07

Niger Uranium, a new uranium company is to be floated on the London Stock Exchange for around £40 million on 13th September 2007 according to Britain’s The Telegraph.

This company is a joint venture between Northwestern Mineral Ventures of Canada and UraMin who were recently bought by the French giant Areva. UraMin began life on London’s AIM Exchange when it was floated for around £120 million to be taken out for £1.2 billion recently. The report goes on to say, UraMin's management is now running Niger Uranium, which has eight licences in Niger and began drilling in June. It is some distance off producing uranium.”

The eight licenses are Irhazer, In Gall, Damas 1 to 4 and Dabala 3 and 4 and cover an area of 6,773 square kilometres.

Northwestern Mineral Ventures trades on the Toronto stock Exchange under the symbol NWT at around $0.70, and OTCBB as NWURF.

Please be aware that Northwestern Minerals has undergone a name change as is now known as NWT Uranium Corp

We think that this is worth watching.

India: To catch the Nuclear Bus

The Prime Minister of India, Manmohan Singh, is being very smart regarding his country's nuclear power program.

India Being Very Smart About Nuclear Power

Today he said:

'There is today talk ... of a nuclear renaissance. We cannot afford to miss the bus or lag behind these global developments. India is now too important a country to remain outside the mainstream in nuclear power growth,'

The Prime Minister also added that India would be capable of doubling its nuclear power generation target with co-operation from other nations. He did not say that India could double its nuclear power generation, but double the target which is already an ambitious one, which aims to increase generation to 40,000MW by 2030. So if the target is 40,000MW, then the PM is saying that nuclear generation could reach 80,000MW. Currently, nuclear power plants in India can produce 3779 Mwe, this is a massive increase in nuclear power, and therefore demand for uranium.

Prime Minister Manmohan Singh has hit the nail on the head when he talks of “missing the bus”. The world is moving towards nuclear power, and India wants to be ahead of the game. If they fall behind and miss the bus, they might not be able to find the uranium to fuel new nuclear power plants or may see the construction of nuclear power plants severely delayed if large nuclear contractors such as Areva are busy building plants for other countries. By signing deals with Westinghouse Electric and getting the ball rolling in the Indian nuclear industry, India will reap huge benefits in years to come. Whilst everyone else is scrambling over the last drop of oil, or frantically rushing to build nuclear power plants, India will already be well on the way with their nuclear program, reducing reliance on foreign fossil fuels and allowing the economy to grow unhampered. Manmohan Singh knows that power is essential to keep the Indian economy growing and he knows nuclear power is the way to secure the economic future of India.

There are currently 439 nuclear reactors operating in the world, using up 66,529 tonnes of uranium a year. Add to that the 34 nuclear reactors that are under construction and the 81 reactors that are on order or planned, plus the many hundreds of nuclear plants that are needed and not yet announced, and the fundamentals for uranium are superb. Do not be deterred by this recent correction in the uranium price and stocks. The uranium bull market is far from over and this correction is a great time to buy some more uranium stocks. Stay updated on which uranium stocks could be good buys and what is happening in the uranium market by subscribing to the FREE Uranium Stocks Newsletter.


Uranium News From Australia and Mongolia

Australia and Mongolia are two of the richest countries in terms of uranium reserves, with Australia having the largest uranium reserves in the world.

Australia is about to finalise a deal with China in which Australia will supply China with uranium.

"We believe that the final agreement (with Australia) will be reached very soon," Chinese Assistant Foreign Minister, He Yafei told reporters.

He Ya-fei Chinese minister 29aug07

We are not sure how many people realise how smart China is being here. We think it is possible that China already secretly plans, or intends to plan, hundreds of nuclear power plants across China to provide power for their ever growing economy. If the Chinese government announced tomorrow that they were going to build 300 nuclear power stations, we would probably see every uranium miner in the world add another zero to the price of their uranium contracts overnight. China does not want to pay more than it has too for its uranium, therefore China is buying up uranium, via deals such as this one with Australia and probably through more deals that we don't hear about. Therefore when China does start building their nuclear power stations, they will already have most of the uranium they need. We are of course simply speculating that this is what China is doing, but it is a possibility and it would certainly be what we would do if we were in power in China.

In news from Mongolia, a uranium company called U3O8 Corp has acquired two exploration licenses in Mongolia as a result of a nearly completed acquisition of another uranium company, Mongolia Energy Limited and Tooroibandi Limited, a subsidiary of Mongolia Energy Limited. U3O8 is a good uranium company which we have followed closely and often considered adding to our portfolio. This is a very smart move by U3O8, buying up companies at the bottom of this correction and we do not know why other uranium companies are not doing the same.

Where are the sharks?

The fact that U3O8 is prepared to make investments in uranium project in Mongolia gives us confidence that the situation there is not as bad as many investors first thought. Khan Resource fell considerably on news that one of their permits had been revoked. We signalled a BUY on that news for a short term trade and closed the trade yesterday for a 15% profit in 10 days.

One can stay updated and informed on the uranium market and uranium stocks by subscribing for FREE to The Uranium Stocks Newsletter.

Aurora Energy Resources: to add 42/lbs million of uranium

According to the FP Trading Desk Aurora Energy Resources Incorporated is expected to add 42 million pounds of uranium to its resources base.

A steady flow of news should now be forth coming as the drill programme advances towards its target of a minimum of 75,000 metres in 2007.

A quick look at the chart and we can see that Aurora is back on the recovery trail with the stock price heading north and all of the technical indicators turning positive.

Aurora Chart 28aug07

Once the price of uranium stabilises removing some of the uncertainty we should see quality uranium stocks such as Aurora do well.

Uranium Stocks: Is it turnaround time yet?

Its the time that all uranium stock holders have been anxiously waiting for. The day of turnaround. The day when the correction ends and our uranium stocks start ticking upwards again.


We have always been absolutely confident that this turnaround would come, the fundamentals are relatively unchanged as countries all over the world are turning to nuclear power, and therefore uranium. The only question was, when would this day come?

The answer is that although we are still not totally certain, it is possible that that day has already been. Depending on which uranium stock you look at, the “bottom” could have happened in the last fortnight.

Looking at the chart above for Laramide Resources, we can see a wave of selling drove the stock down to $3.95. More shares were sold in that final drop, which could be the “final capitulation”, than have been during any trading session over the past two years. This could well mean that those trading sessions were capitulation scenarios we were looking for. Also, one should note that from this possible bottom, Laramide has gained nearly 65 per cent. This is evidence of just how much these uranium stocks can move. The correction may have been dramatic, but drama works both ways, and we could see an equally dramatic turnaround and bounce back in Laramide and other uranium stocks.


Mega has also impressed, with gains of 71% from its bottom and Strathmore has risen 67% since its “bottom” and even if one takes the $2.00 level, STM is still up 42%. This shows that investors are now becoming more prepared to buy uranium stocks. Prepared not only buy them, but pay large premiums from the bottoms, rather that entering low bids and waiting for desperate sellers to crack and hand over their shares at a ridiculously low price.


These events may be an indication that confidence is returning to the uranium market, and once we see some serious volume of U3O8 being traded at decent prices, this will give the market even more confidence and give the stocks new life. We wrote that many uranium stocks were looking like good buys on the 24th August, and we signalled a BUY on Ur-Energy, although we really could have given a BUY on the majority of stocks in our portfolio. We feel that this correction is massive opportunity to purchase uranium stocks at fantastic discounts. As the recent bounce shows, uranium stocks are more than capable of bouncing back to their old highs and beyond. Although we are not yet 100% certain that we have seen the bottom, we are confident that future downside in uranium stocks is limited and the upswing is coming very soon and it could be as dramatic, if not more dramatic than the correction.

Stay updated on the uranium market and informed on investment opportunities in uranium stocks by subscribing to our FREE Uranium Stocks Newsletter.

Khan Resources Incorporated: Speculative trade now closed

Khan logo 27aug07
During the turmoil on the 17th August 2007 we bought some more shares of Khan Resources Incorporated for $1.70. The purchase was made as a speculative trade as Khan announced that they had a problem with license 9282X as it was considered to be invalid by the powers that be in Mongolia.

We were of the opinion that the management team at Khan would resolve this problem and therefore we went against the flow of selling and made an investment.

We have no new news to offer you but the stock price has started on the road to recovery. We still have confidence that it will continue its recovery and regain its former higher trading price.

Today we decided to sell at the higher price of $1.96, in order to close this position. This gives us a profit of $0.26 or 15.29% in 10 days. We are happy to take this profit as it was generated over a short time span. The downside could have been that the stock did not recover so quickly and we would have had to hold Khan for longer. That’s not a problem for us as we like the stock very much and still hold their shares as part of our core holding in uranium stocks.

From time to time we will make short term trades such as this so stay tuned but don’t place too much of your funds into any one trade and as always, spread your risk over a number of stocks and only use your ‘gambling’ money on this sort of trade.

Stay calm things are on the up.