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Uranium: Spot price stable but futures rise

Trading data for uranium remains as rare as hen’s teeth with investors tracking the next uranium auction with the view that a result will be indicative of uranium’s future direction.

According to the usual sources, the UX Consulting Company and TradeTech the spot price remains stable at $85/lb.

Nymex Logo 28sep07

However when we take a quick look at yesterdays action in the futures market we can see that the December contract traded at $92/lb with 2008 trading at $90/lb. One swallow does not make a summer but we interpret this as being positive for uranium, as the plunge in the price does appear to have abated for now. So if uranium can stick around at these levels then the quality uranium mining and exploration companies should be able to operate with profitable margins.

Most of the uranium stocks that we monitor are making recoveries although some are slower than others. The near term should be a period of consolidation for uranium and continuing recovery for the stocks.

Hang on in there things are improving almost on a daily basis and stay tuned with our free newsletter, just follow this LINK.


Britain’s nuclear future crawls to the starting gate!

Power stations 27sep07

Public opinion in Britain may be turning towards acceptance of a new nuclear power programme but the bureaucratic progress is slow and arduous. The original consultation has been judged to be very seriously flawed and so the public consultation period ensues bringing mixed results.

In an article by Roland Gribben of Britain’s Telegraph, page A6, Focus on Energy, a poll of over 1000 people had 46% in support of continued use of nuclear power. The article goes on to say that the government is anxious to bring back nuclear power into the energy equation to provide a more balanced portfolio and avoid heavier dependence on gas and other forms of energy. Bang on in our humble opinion.

Now if you reflect on any of the major projects that have been built in your area did you find that the budget was overrun and the schedule was overshot? Projects that spring to mind here are the new Wembley stadium and the new parliament building in Scotland, both managerial basket cases. The same goes for large nuclear projects they are fraught with opportunities for delay, hence the proliferation in claim resolution specialist consultants. Well this is the first article that we have come across that has raised the touchy subject of ‘timetable’ when it points out that by 2020 there will only be Sizewell B producing nuclear power. So Britain has about twelve years to say yes to a nuclear future, produce designs, procure equipment, appoint expert constructors, build and commission this new crop of plants. The construction of nuclear power plants has not been done in this country for almost a generation so the expertise is not available. Well right next door we have the French who are bang up to date with the latest in nuclear technology however everyone else will be calling on their services too. The shortage of skilled labour in this area is bound to impact on the proposed Engineering, procurement and construction schedules so the need to get to the starting gate is absolutely critical if Britain is to avoid a run a candles.

The British government is keen to see that the private sector provides the finance and not the taxpayer, do we have the time to pontificate we ask?

For good measure this article reminds us that the Chinese have plans for 88 out the proposed 223 new nuclear plant proposals, although we tend to think that China will announce more and more new proposals once it has tied up the supply of uranium. Yes uranium! One wonders just how much uranium has been secured to operate these plants in Britain; our guess would be on the low side, if any.

Have a good one.

Fronteer Development Group: Moved to

As Fronteer are now focused on gold exploration we have decided to transfer it to our gold mining investment account at gold where we will report on the companies progress and any trades that we make. Just follow this LINK and many thanks for your patience.

Uranium: Two new reactors for Texas?

The Wall Street Journal 25sep07

The New Jersey energy company, NRG Energy Incorporated is to submit an application to build two new reactors in southern Texas according to The Wall Street Journal.

In their introduction to the article they had this to say:

“In a move that could mark the beginning of a nuclear-power revival, a New Jersey-based energy company today plans to submit an application to build and operate two new reactors. The request, the first submitted to the Nuclear Regulatory Commission in 31 years, comes from an unlikely source: NRG Energy Inc., a company that has never before built a nuclear plant.

NRG Energy Logo 26sep07

The application -- for a two-reactor addition to the company's existing South Texas nuclear station -- could offer the first full test of the nuclear agency's new licensing process, which has been under development since the 1980s”

The sooner this process starts the better in our opinion. New sets of regulations always present a new set of obstacles to be negotiated. Lets hope that it is not a bureaucratic nightmare but a fast moving piece of machinery designed to get nuclear power plants built quickly and efficiently.

Thanks to Bob P for alerting us to this news.
Sep242007 Portfolio Update 21 September 2007

Uranium Chart:

Uranium Chart 22sep07

Having been battered by both a market sell off and a U-turn in the spot price of uranium the bottom fishers have arrived and uranium stock prices are recovering mostly on increased volume.

The spot price is languishing at around $85/lb down from $105/lb last month. As we have written many times this is a thin market and the lack of trades sometimes produces a spot price based on estimates rather than hard facts. Even so at 85/lb the quality uranium miners will do very well so we need to stay calm and rational when buying stocks. As always keep an eye on the long-term indicator, as it remains virtually unaffected by the day-to-day hysteria found in the media.

Our portfolio was hit hard; it was an eye watering punch on the nose to glance down the investment account and see the erosion of profits. However the loses are paper loses and only become real if we hit the sell button which we have not done. Now since the last update many of the stocks have started to recover and on increased volume to boast! Its not a time to celebrate but if you have the cash and the nerve it is a time to gently accumulate some more of your favourite uranium stocks. Be warned though, the team here can find an upside to most things.

Below we list the uranium stocks that we have an interest in or are watching with the view to making a future investment. We are also looking for the occasional trading opportunity as we are small enough and should be nimble enough to move in and out of a particular stock quickly as we did in our portfolio of silver stocks last month. This is difficult for the big players who own big positions in their favourite uranium stocks as the thin liquidity of some stocks does not allow them to sell a large position at the push of a button. But that is no excuse for us, so going forward we will suggest from time to time one or two short term trading moves as we did recently with Khan Resources.

Cameco Corporation – Watch
Cameco was trading at $55.09 on TSE, but didn’t escape the sell off and dropped to $39.25 last month before climbing back to close at $43.93 on Friday.

RPT Uranium Corp – Watch.
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, although RPT has dropped since then to $0.27, which is disappointing. This is a small company with a market capitalisation of $24 million.

Uranium Participation Limited – Buy
U is currently trading at $10.99 Canadian and is down $1.00 since we bought at $11.97 on 21 November 2006. We will continue to hold, as it offers direct exposure to uranium without the risks inherent in mining.

Strateco Resources Inc – Buy
we made a small investment in RSC at $2.30 so we are pleased to see it close on Friday at $2.52 for a small gain. The stock appears to have formed a bottom and is on the road to recovery keep an eye.

Fronteer Developments Group – Hold
Fronteer is currently trading at US$10.25. Our original purchase was made on the 15 July 2006 at around the $4.70 level so that is a gain of 118%. We are still quietly confident that it can double in value in 12 months or less. FRG owns the lion’s share of Aurora Energy Resources making it a gold/uranium play.

Crosshair Exploration and Mining Corporation– Neutral.
Having taken a small profit we continue to watch CXX. The stock was trading at $1.39 last month and closed on Friday at $1.73. CXX gained 19.31% on Friday on increased turnover of 622,000 shares. Listing on the AMEX as CXZ provides this stock with exposure to the American stock market.

Laramide Resources Limited – Buy
This stock was $5.76 last month but has since rallied to close at $7.36 on Friday. We bought at $5.78 on the 28 July 2006 so we are pleased to see this recovery. When we were sitting on a paper profit of around 80% we sold half in order to buy other uranium stocks, as we needed a bigger spread of stocks.

Energy Metals Corporation – Now part of Uranium One

Eagle Plains Resources – Buy
This stock is mainly featured on our silver website, but it does have some uranium interests. EPL was trading at $0.79 in the last update and is currently trading at $0.76, for a nice gain since we bought it at $0.53. We still hold the belief that EPL will be issuing good news on the results front this year so we will hold on tight to this industry's ’Project generator’

Mega Uranium Limited – Buy
We bought MEGA at around $4.0 on 27 July 2006. MGA is now trading at $4.01 so its back to evens. MGA has taken a battering during the recent sell off, but the recovery has commenced. They have a very good cash position so we would expect them to be in acquisitive mood and pick up a few bargains before prices rise.

Rodinia Minerals Inc. – Watch
RM was $0.80 when we first wrote about it on 15 August 2006 and is currently trading at $0.75 up from last months $0.60 so a fairly volatile stock. The volume is still tiny although turnover hit 285,000 on Friday resulting in a gain of 15.38%. It is a small company with a market capitalisation of $13.6 million.

Santoy Resources Limited – Watch
Santoy was doing very well up from $0.81 that we paid on 27 December 2006 to trade at $1.53 at the time of the last update. However having decided to sell three of its projects to Mega for 400,000 common shares in Mega we decided to sell. We sold on 23 April 2007 at $1.39 for a profit of 70% in 4 months. Santoy now trades at $0.72 up from $0.54 last month. This stock is not for us at the moment but don’t let us put you off it.

Khan Resources Ltd - Buy
We bought Khan on the 5th March at $3.63 and it dropped to $1.33 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. Khan closed on Friday at $2.38 so the recovery appears to be in place. However we do need confirmation that the outstanding issues have been resolved. Also note that LAM took advantage of this turbulence and bought 5.6 million shares in Khan, a smart move in our opinion.

Aurora Energy Resources - Buy
We bought Aurora on the 5th March 2007 at $14.17 and last month it was down to $11.18, however it is now trading at $12.68 again showing signs of a come back.

Strathmore Mineral Corporation - Buy
We bought STM on the 14th April 2007 at $4.96 and it is currently trading at $2.82, up 23% from last month when it was $2.28, but down overall about 43%.

Ur-Energy - Buy
We bought Ur-Energy on the 23rd April 2007 at $4.75 and last month it was down to $2.78 however it is presently trading at $3.13 which eases the pain a little. We also gave a second buy signal on the 24th August 2007 when we acquired a more stock at $3.03.

UraMin Incorporated – gone to that big AREVA in the sky!
We bought UraMin on the 15th May 2007 at $6.72 and sold it for $8.36 on the 22nd June 2007 for a gain of 24.4% in 6 weeks. (Niger Uranium is a possible replacement!)

We are sticking with our target prediction of $200.00 per pound for uranium despite the recent drop in price. Don’t be put off if we haven’t mentioned your favourite stock we do get it wrong now and again as evidenced reading our updates we are having to take it on the chin at the moment.

Please do get involved and add your comments to any of our articles whether you agree with us or not as this will add balance to what we say and be of benefit to everyone. No, you can’t use naughty words.

Please accept our apologies if you were unfortunate enough to visit the site when unwanted Spam is present we have now installed more Spam protection so it will become less and less every day.

Please feel free if you haven’t joined to sign up to the forum and get involved with some of the debates. If there is a subject or uranium stock that you want to discuss then please start a new thread and we will follow with our comments.
Many thanks to all of you who have signed up for our Uranium Stocks Newsletter; we hope that you are enjoying it. We now have 3364 subscribers up from 3218 subscribers last month and approximately 20,000 readers per week which include a number of stockbrokers, banks and financial institutions, uranium company CEO’s, etc.

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We have been inundated with requests for individual advice, which we are not allowed to give by law so please accept our apologies for not piling in to help you. There have also received a number of requests to cover individual uranium stocks or unique geographical areas, which we will try and get to in the weeks ahead.

Chin up! We are on the mend.


Tasmania: Now it is legally possible to mine uranium!

Tassie devil 22sep07
According to the Sydney Morning Herald the government and the opposition have overcome the Tasmanian Greens Party to make the mining of uranium in Tasmania legal.

This is another victory for common sense and another blow to the Green movements outdated policies. We see this change in political will as a major move forward for Australia which will add pressure to the other states such as Queensland which so far has resisted the call to allow uranium mining.

The article goes on to say that: “Perth's Minemakers has just punched a few holes into one of several old uranium prospects in the north-east of the island state, in what is the first exploration for the radioactive stuff down there for longer than anyone can remember.

“It was Drummond's uranium experience back in the 1970s and 1980s with the likes of Uranerz that alerted him to Rossarden's uranium potential, even if it is best known as Australia's largest historic combined tin/tungsten field. Research by Drummond found that the region is also home to four of the five known uranium properties in Tassie.”

“One of them, the old Tasmania United prospect, was the subject of limited mining more than 50 years ago and encountered spectacular uranium ore grades of more than 13 per cent from small-scale adits cut into the side of a hill”

Well not bad for starters! We will need to keep an eye on developments here. If there are any of our Australian readers out there who can enlighten us further please feel free to add your comments to this article.

Aus and tassie 22sep07

I once stayed at the casino in Hobart which was very nice but that was a business trip regarding the pulp and paper industry a few moons ago. Tasmania is an island just south of Australia opposite the city of Melbourne.
Tassie Map 22sep07

The countryside was similar to that found in New Zealand, absolutely stunning. No doubt that a few newsletter writers will find a reason to visit Tassie shortly!

Tas views 22sep07

Have a good one.

Uranium: “Demand is understated and supply is overstated”

Uranium One logo 21sep07

The words of Neal Froneman the CEO of Uranium One in an article carried by Mining Weekly who went on to say that:

“The supply and demand fundamentals are still the same as a few months ago.” He also expressed “amazement” about the number of people who are focused on the spot price and not the long-term price of uranium, which is far more representative of the market.

This is something we have said many times.

The article goes on to say Mr Froneman expects prices to remain between $85/lb and $90/lb over the next few months, but to claw back to the mid-$100 range in the medium term. (18 months)
Uranium One is pursuing a listing on the main board of the London Stock Exchange, which would give the company exposure to both the British investors and the European investors.

From our mailbag we can see that there is reluctance to invest in companies that are not listed on the London Stock Exchange. We are not sure why this is, it could be short sightedness on behalf of the investor or just too much of an inconvenience for the stockbrokers. Anyway a listing on the big board in London should certainly increase exposure and liquidity.

Uranium One has a market capitalisation of $4.44 billion and is listed on the JSE and on the Toronto Stock Exchange as UUU where it closed yesterday at $12.15.

For disclosure purposes we do not own this uranium stock but do not let that put you off.

Uranium: The quiet is eerie!

Uranium Chart 20sep07

It feels like forever since we could actually point to a real price for uranium with an audit trail to the buyers and the sellers. Now it appears that all we have to go on is estimates of what the various parties think it will trade at when it next trades. Talk about thin; it’s almost invisible. Apart the usual sources that carry very good data based on sound reasoning it’s just not the same as a concrete number.

The miners see it going up and up, the short sellers see it going down and down. It does get to some people that such an important commodity can be surrounded by ‘informed opinion’ and short on fact.

When we add to this the wrangle in the financial markets which leads to those other precious metals, gold and silver grabbing the head lines its enough to make you throw the towel in. Well don’t! That’s exactly what the bargain hunters want you to do as it gives them the opportunity of picking up your uranium stocks on the cheap. To add some cheer to your face have a quick run through a dozen or so charts of uranium companies and tell yourself what you see. Nearly all of them are off the bottom and are recovering from a severe correction for starters. The energy problem has not gone away, we will still use it in ever growing quantities going forward. The other solutions are nice to have dreams but you and I know that they won’t cut it. Be patient! Hang on in there. The summer is almost over and trading activity will pick up and these doldrums will be a thing of the past!

We will continue to hold onto our portfolio of uranium stocks and look for the bargain buys along the way.

Ur-Energy to Expand Drilling Programme

The interesting point about this news release is that this company is actually ahead of its drilling programme and can therefore expand its area of exploration.

Mr Bill Boberg, President and Chief Executive Officer had this to say:

“The fact that we can complete a planned drilling program ahead of schedule and then expand it to nearly double in size from our original plans just shows the resolve this group has to be successful in its endeavour.”

This drilling program has now been extended to do 71,025 meters and increase the resources for Ur-Energy’s future production pipeline to its planned processing plant. The news release goes on to say that:

“The proposed new processing plant will be designed and permitted to produce two million pounds of U3O8 yellowcake slurry per year with the capability to toll process loaded resin from other satellite ISR facilities.”

Well done to the Ur-Energy team.

Shares of Ur-Energy Corporation trade on the Toronto Stock Exchange under the symbol URE.

The company has a market capitalisation of $288 million with the shares currently trading $3.14.

Silver Futures Spread Bet brings 100% profit

On the 20th August we signalled to all our readers of The Silver Prices Newsletter that there was a short term trading opportunity in silver as silver prices had fallen considerably and it appeared like a great buying opportunity for us.

Just moments ago, the silver futures prices moved up to where we had placed a sell order at $13.15/ounce on silver futures contracts for December. This means our silver trade has closed with 100% profit in 30 days, a trade with are extremely pleased with.

Read more.