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Crosshair Mining and Exploration Corporation: Revisited 09 March 2008

Crosshair Mining and Exploration Corporation

Judging from our mail bag Crosshair has many fans who frequently tell us to buy this uranium stock right now, as it won't go any lower etc. So we will take another look at one of this sectors favourite stocks.

Initially we bought Crosshair for $1.86 with the view to holding it for the long term when on 25th September 2006 we wrote:

“The company is currently exploring for uranium in the Central Mineral Belt of Labrador, where it has amassed a land position amounting to some 2740 claims, covering an area of 685 square kilometres. This area is regarded by a lot of commentators as the next big uranium discovery in Canada. The management team is also highly thought of and Canada is geographically and geopolitically as good as it gets.”

Since then we have sold Crosshair for $2.60, locking in a profit of around 40% as the stock ran to over $4.00, peaked and has struggled ever since.

If you are holding and tracking a portfolio of uranium stocks you will have noticed the recent upswing which lifted many uranium's off their recent bottoms and into a rally. We recently posted article on Denison when it was close to $6.00 and its subsequent rally to almost $10.00, notice that it has now backed off to $8.61. Its a similar story for this sector with stocks rallying only to have their progress hampered by what we think is profit taking by those who wish to be out and the rally presented them with the opportunity to cut their losses. We have no argument with this sort of activity as it effectively clears out the non believers making way for a sustained rally supported by those who already have a position and wish to increase their stake in the nuclear future and by those new converts who have yet to enter this market.

Taking a quick look at Crosshair's chart:

The technical indicators are heading south with the MACD displaying a negative crossover. CXX tried to join the recent rally with a move up to $1.60 but soon fell back to trade at $1.20 on heavy volume, which is the lowest it has been since August 2007.

With a market capitalisation of $87 million and 72 million shares outstanding it small enough to be buffeted around by speculators and fund managers alike, as a trading can amount to less than $1.0 million a day.

CXX revisted 09th March 2008

On the news front they have been active with the announcement of a C$15.00 million financing deal and the appointment of Paul Hosford, Professional Engineer, as President and Chief Operating Officer.

In conclusion we are not buyers at the moment but mere observers. Crosshair does appear to have suffered more than most and the downside would appear to be limited. However recent rallies have petered out and we need something to give Crosshair a lift. It could come in the form of the general recognition that the long term price of uranium has steadied at $95/lb according to Ux consulting even though the spot price is hanging around at $74/lb.

Crosshair currently trades on the TSX Venture Exchange under the symbol of CXX and on the American Stock Exchange under the symbol of CXZ.

Finally, If you are new to this web site and wish to receive our free newsletter regarding trading opportunities in this sector then please click this link to subscribe to The FREE Uranium Stocks Newsletter.


Uranium Market Update 07 March 2008

Uranium is now poised for a strong rally according to the Royal Bank of Canada Capital Markets who have told their clients that:

"We think the sentiment of the uranium market has changed substantially in a very short period . . . our 2008 market balance estimate has shifted to a deficit (from a balanced market) and we think the spot market is set for a strong rally".

Their rationale was predicated on things such as Uranium One reducing production, AngloGold Ashanti warning it may have to declare 'force majeure' and Uranium Participation entering the market and purchasing 900,000 pounds on the spot market. Their forecast for 2008 stands at $110/lb which should bring a smile back to the faces of those who have held on through the downturn. They also report that the long term expectation for both the Ux Consulting Company and TradeTech remains at $95/lb. All grist to the mill, to read the article in full just follow this link.

Moving across to LONDON, Reuters carry a report that the British government have made 18 more sites available for the next generation of nuclear power stations. Mr John Hutton, Secretary for business said that:

"Planning applications for new plants are likely to focus on areas in the vicinity of existing sites and so it's welcome that the NDA is making its significant land and other assets available to the market,"

It looks like a sound move so far but it will be interesting to see how they handle nimbyism (not in my back yard) which will no doubt have a roll to play.

Mr John Hutton also said the government may sell its shares in British Energy, worth around 2.0 billion pounds, however he doesn't say where he intends to spend this cash. Sadly we can see it being consumed somewhere in the public sector, a town hall extension here, a trip or two to an exotic location or the hiring of a few more enablers and creating other non-jobs. To read this article in full please click this link.

And finally to Denison Mines Corporation. When we reviewed this stock on the 12th February 2008, it was trading at $6.40 and we were hoping to pick it up at about $6.00, however it moved faster than we did and is now trading at $8.81. If you managed to bag a few then well done you must be sitting on a canny profit by now and in a short time too! Denison may come off a little from here but don't worry about it, the upside potential looks a lot brighter to us than downside, which we think is limited to a small amount of profit taking.

DML Logo feb 08

Have a good one.

Finally, If you are new to this web site and wish to receive our free newsletter regarding trading opportunities in this sector then please click this link to subscribe to The FREE Uranium Stocks Newsletter.


Our Rating of the Rating Agencies: Junk

The recent decision by some prominent investment rating agencies to maintain their top quality AAA ratings for some of America's most troubled bond insurers has worried us to say the least. Although some agencies such as Fitch Ratings have been sensible enough to downgrade bond insurance companies like Ambac Financial, others are still grading these companies as top quality investments.

Our Rating of the Rating Agencies: Junk

We view this as a drastic judgement error on the agencies part. These bond insurance companies have insured bonds backed by risky subprime loans which are now defaulting left, right and centre. Therefore the bond insurers are being forced to make big payouts on their policies and the fact of the matter is, they don't have enough money to cover all the home loan defaults that will mount up like a rolling snowball during this severe recession.

Please click here
to read our article in full.

US Financial Sector Continues To Suffer

We took a speculative short position on the US financial sector a couple of weeks ago, via an inverse ETF called Ultra Short Financials ProShares (AMEX:SKF). As an inverse ETF, this investment will go up when the US Financial sector goes down, with a leverage of 2:1. For more details on how this work, please read our article entitled “A Bet Against The Banks”.

SKF 010308

Since we bought SKF at $110.36, the financials have continued to suffer and so our investment has risen to $119.27, a gain of just over 8% in two weeks.

Do we see SKF continuing to make gains? The answer is Yes – simply because we do not see a major upswing coming in the financial sector for some time. The market will occasionally get a boost from a Ben Bernanke interest rate cut, but the success is usually short lived, and the Fed cannot cut rates forever.

Please click here to read the rest of this article.

Uranium Participation Up 9.5% Yesterday!

uranium participation logo 29 feb 08

An interesting announcement yesterday from Uranium Participation Corporation as they issued a news release outlining their intention to sell shares in order to raise funds to buy uranium. According to Reuters the company said;

“it would issue C$65 million worth of shares to fund the purchase of 900,000 pounds of uranium.”

The company intends to issue over six million shares at C$10.20 each and last night the stock closed at C$11.41, to conclude a nice days work. Reuters goes on to say that this purchase would represent about 5% of the uranium traded on the spot market in 2007.

Taking a quick look at the chart we can see that the volume was heavy yesterday with 3.4 million shares traded. This stock appears to have found support at around the $8.00 mark and subsequently had a very good February. Bring on more months like this one.

Uranium Particpation chart 29 Feb 08

The company last produced a Net Asset Value Statement (NAV) on 31 January 2008 where it stated that the NAV was C$9.70 on a basic and fully diluted basis. To read their statement in full just click this link.

Thanks to 'B' for giving us a heads up.

Uranium Participation Corporation trades under the symbol of 'U' on the Toronto Stock Exchange.

This sector is coming back to life so stay tuned with our free uranium stocks newsletter by clicking this link.


Queensland to Re-think Uranium Mining Ban?

ABC logo 26 Feb 08
Following on from the decision by the Northern Territory Government to allow a uranium exploration project, Independent federal MP Bob Katter has called on the Queensland state government to overturn the ban.

Bob Katter said;

"So the alternatives really are very simply, mine uranium, and if you don't then you are doing the wrong thing by the people in north west Queensland, you're doing the wrong thing by the people of Queensland and Australia and you're most certainly doing the wrong thing by the planet as well,"

No doubt there will be a lot of opposition to this call but we think he is bang on. Not because we own some uranium stocks but because we believe it is the only answer for most countries energy needs with maybe the exception being New Zealand.

To read the rest of this news snippet just follow this link.

Have a good one.


Mega Uranium Limited: Drill Results

Mega logo 22 Feb 08

Mega Uranium Limited have issued the results of the results of its Phase three drilling program on the Mustang Lake property and the phase one drilling program on the Bruce River property, both form part of the Central Mineral Belt of Labrador.

The company said that;

“A 3,500 metre drill program on Mustang Lake is scheduled to commence in March, 2008 and will continue work on the property, which is part of a 50:50 joint venture with Santoy Resources Ltd (SAN:TSX-V) (“Santoy”), where Mega is the operator. Santoy has elected not to participate in this next phase of the program and its interest in the joint venture will be diluted on a pro-rata basis.”

At the Mustang Lake Property the best results include 1 metre of 0.197% of U3O8 and 0.6 metres of 0.167% of U3O8. At the Bruce River property the best intersection was 0.3 metres of 0.237% of U3O8. To read the article in full and see the tabulated data please click this link.

This is an exciting prospect as we look forward to more good results in the near future. The stock closed up 2.11% at $3.39, on turnover of 323,227 shares. Mega Uranium was recently upgraded to a 'Buy' in our portfolio update.

Mega Uranium Limited, trades on the Toronto Exchange under the symbol of MGA.


Fronteer Development Group: Up 7.96% today!

FRG logo 25 feb 08

Fronteer Development Group (FRG) put in a great day rising $0.69 to trade at $9.37 as we write. Fronteer is a play on both gold and uranium so this stock benefited from the rise in gold and also from a news release regarding Aurora Energy Resources Incorporated (AXU) in which it holds a 42.3% interest, to read more, please click here to read our full article.
Feb242008 Portfolio Update 24 February 2008

Uranium Chart 24 feb 08
This chart is courtesy of

It comes as a welcome relief to see the uranium stocks sector reverse the downward trend and stage a mini rally. Throughout this period of carnage which saw stocks losing 50% plus of their value it has been hard to hold on to theses stocks. Wrongly or rightly we decided to grin and bear it and not sell any of our stocks and subsequently register the associated loses. Our portfolio is battered and pales in comparison to our gold and silver portfolios. However we still believe in the nuclear future with the fundamental criteria for uranium being little changed. We could well look back on this period as the buying opportunity of a lifetime even though a victory looks improbable when you are on the ropes.

Going forward we have no doubt that there are financial skeletons in the cupboard yet to make their début with the fallout effecting most sectors, although it should not come as such a shock this time. Again we reiterate that it is difficult to see much in the way of downside for uranium stocks as the worst looks to be over. As we have reported recently, many of the uranium stocks have bottomed and some have put in spectacular spurts of 20% plus in a day. Also note the increased volume of shares traded and take a look at your favourite stocks to ascertain if they are experiencing similar increases in trading activity.

In view of the renewed interest in uranium stocks we are relaxing our previous stance of 'hold' and recommending just a few stocks as 'buys' with the view to acquiring these stocks gradually.

Cameco Corporation – Watch
Cameco was trading at $35.30 when we last updated the portfolio and closed at $36.94 on on Friday. Volume has fallen recently which is not a good sign as stocks don't usually rise on reducing volume

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 closed at $0.17 on Friday, however it does appear to be trying to form a bottom with support at $0.16

Uranium Participation Limited – Hold
U is trading at C$10.60 having been as low as $9.00 recently, so we are pleased to some progress with this stock. We bought at $11.97 on 21 November 2006 so U is still showing a small 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 recently traded at $2.87, however it closed at $2.22 on Friday so we are back to square one.

Crosshair Exploration and Mining Corporation – Neutral.
Having taken a small profit we continue to watch CXX. The stock was trading at about $1.76 last month but has fallen back to close on Friday at $1.46. Judging from our mail bag Crosshair has a fair number of admirers who may start accumulating again, wait and see.

Laramide Resources Limited – Buy
This stock was trading for about $4.22 last month and closed on Friday at $5.00, we bought at $5.78 on the 28 July 2006 so we are pleased that Laramide is heading in the right direction. 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, lets hope those days return.

Mega Uranium Limited – Buy
We bought MEGA at around $4.0 on 27 July 2006. MGA was trading at $2.25 last month but has improved considerably to close at $3.32 on Friday. Mega has the potential to move upwards very quickly.

Santoy Resources Limited – Dropped from list
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 $0.40. This stock is not for us at the moment as they now have limited uranium exposure so we are dropping Santoy from our list.

Khan Resources Ltd - Hold
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 at $1.28 last month but jumped recently to close at $1.73 on Friday.

Aurora Energy Resources - Hold
We bought Aurora on the 5th March 2007 at $14.17 and it is now trading at $9.46 having been as low as $8.00, but the company does have a great project in the Central Mineral Belt and when uranium prices start ticking up again, so should Aurora.

Strathmore Mineral Corporation - Hold
We bought STM on the 14th April 2007 at $4.96 and it is currently trading at $2.00, which is a very disappointing performance indeed. STM needs to join in the current resurgence in uranium stocks and prove to us that it is worth holding.

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. URE closed on Friday at $2.29, having traded below $2.00. Ur-Energy is showing signs of a recovery but we would like to see the volume increase.

We will not report on the following stocks in future:
Fronteer has been transferred to our gold investment account and will not be covered here in future.
UraMin Incorporated – gone to that big AREVA in the sky!
Santoy, not enough uranium content.

We may be adding other uranium stocks to the watch list such as Denison Mines (we do not hold this stock at the moment.)
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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Mega Uranium Limited: Up 23.08 % today!

Mega logo 21 feb 08

Mega Uranium Limited gained $0.60 today on volume of 1.46 million shares traded to close up 23.08% at $3.20, along with a number of other uranium stocks that also made good gains.

Mega Uranium released a news statement which may account for some of the renewed interest which went as follows:

Mega Uranium Ltd is pleased to announce the commencement of a 3,600 metre drill campaign on the Maurice Point property in the western Athabasca Basin. The Maurice Point uranium property is under option by Mega from Forum Uranium Corp. (TSX-V:FDC) where Mega can earn a 55% interest in the project by spending $8 million over three years. Forum is operator.

If you wish to read the article in full then please click this link.

Apart the news release we are now of the opinion that market sentiment is beginning to turn in favour of this much denigrated sector as each day we are seeing uranium stock price increases across the board characterised by a star performance such as Mega Uranium today and Khan Resources yesterday.

A quick look at Mega's chart shows a terrific jump today on vastly increased volume. The technical indicators have turned up with a vengeance, it will be interesting to see if this stock can go on and and rally from this point.

Mega chart 21 Feb 08

Mega Uranium Limited trades on the TSX under the symbol MGA.

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