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Uranium: and now some good news!

Seabrook nuclear power plant

The bottom line here is that lower electricity bills are on the horizon for these customers who buy electricity from the Seabrook NUCLEAR power plant in New Hampshire.

"The market price for a natural-gas unit is significantly higher than the cost for a nuclear plant."

Says David Tuohey, a spokesman for the Massachusetts Wholesale Electric Company. David goes on to say that:

“In 2010, debt service for construction of Seabrook will start to decline, and it is scheduled to be eliminated by 2019. The reduction will be passed on to ratepayers in the form of lower electricity bills”

Three cheers for someone who is as far sighted as the French in terms of having the vision and the will to stick with nuclear power despite the dissenters. It wasn’t that long ago that the customers in the town of Stow wanted a separation from the Hudson Light & Power Department as it was deemed too costly to use their nuclear powered electricity. However, with the decline in the cost of servicing the construction debt nuclear power is being hailed as the way to go! Fantastic! But wait; there is an added kicker to this cheap supply of power in that the requirement to reduce carbon dioxide emissions comes into play. Well as Seabrook's nuclear plant does not produce carbon emissions they will be exempt this green tax. This is the requirement to buy credits for producing carbon emissions! Not applicable here, thank you!

Mr Tuohey goes on to say that "The ownership of the Seabrook plant has gone from a burden to a significant benefit, and the future looks even brighter" Bang on in our humble opinion, but we are biased to nuclear power. So what does this mean to the families concerned in terms of hard cash? For this we turn to Yakov Levin, general manager of Hudson Light who summarised as follows:

“For an average household using 800 kilowatt hours per month, Hudson and Stow customers pay $101, said Levin. Relying primarily on natural gas, National Grid's average bill is $129 for the same amount of electricity, and the figure for NStar customers would be $145”

When the end result is cheaper power then the customers will vote with their feet for more nuclear power stations, lets hope that they do so before the explorers and mine developers throw in the towel and go off searching for the other precious metals.

Have a good one and thanks to B for alerting us to this situation and to The Boston Globe for carrying the article.

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Another cold shoulder for uranium

Uran logo 24 April 2008

Australian explorer, Uran Limited appears to be the latest victim of the global bureaucratic hurdle as the Czech town council of Pribyslav, rejected an offer from the Australian company for it to be allowed to explore what are believed to be rich uranium deposits in the centre of the country.

Pribyslav was one of Uran’s target areas because it is thought to have about 7,500 tonnes of uranium at nearby Brzkov.

Uran had this to say about Brzkov:

“Uran has lodged applications for 4 exploration permits over defined uranium deposits around Brzkov, about 50km from Rozna. Regional exploration identified a number of deposits including the most significant, Brzkov and Veznice. The mineralization is similar to that at Rozna uranium mine, consisting of high-grade lenticular pods and veins with associated disseminated mineralization in the deep-seated Pribyslav fault zone. Mineralization consists mainly of uraninite and coffinite and extends from near surface to at least 600 metres below surface. Similar deposits in the region are known to extend to at least 1,000 metres.”

The Aussie miner had hoped to gain council backing in order to overturn previous environment ministry rejections of its exploration bids, however on this occasion they have been unsuccessful.

The importance of the environmental considerations cannot be overstated and the council are correct in their stance if they consider the proposal to be a danger. However, once all of the requirements have been satisfied then it comes down to a question of money. Whether it is in terms of a mineral tax or a piece of the action, an incentive is needed that is attractive enough to be snapped up by the objecting party. The commodities boom is no longer a secret as we see, almost on a daily basis, governments, minorites and even town councils standing up for their rights. These opportunities come just once in a lifetime so the people responsible have to manage their parcel of land ensuring that they squeeze everything they can out of it.

Expect more of the same and review your portfolio from a geo-political perspective to assess the risk of your investments. If you do use SWOT analysis then this one belongs with the ‘Threats’ as it has the ability to stop your project from getting off the ground.

Uran Limited trades on the Australian Stock Exchange under the symbol of URA, at around $A0.245 per share

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Aurelian Resources Inc: A Victim of Geo-politics!

The best success story in the gold exploration sector has been dealt a tough blow as the Ecuadorian government suspends mining (read more…)


Uranium Participation Corporation: P/E at 2.05!

Uranium Participation Chart 21 April 2008

A sign of the times is just how low some of the uranium’s are trading is Uranium Participation, currently trading at $8.06 giving the company a P/E ratio of 2.05.

Uranium Participation Corporation has a Market Capitalisation is $482 million and on Friday the volume was 1.92 million shares traded. The company’s stock price has a 52-week high $17.50 and a 52-week low $7.92, pretty much as hard hit as the others in this sector.

We find it staggering that this company, which basically trades in uranium and does not have any exposure to the risk element that goes with mining, can have been sold off to the point that its Price to Earnings Ratio is 2.05 and the EPS (Earnings per Share) is $3.94.

The average cost to them of u3o8 is $37.91 US dollars per pound, according to their NAV update dated 29 February 2008, against a long-term uranium price of $95/lb.

Are we unfashionable at the moment or what?

Uranium Participation Corporation trades on the Toronto Stock Exchange under the symbol of ‘U’

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For those of you who are looking for a little more diversity in the energy field then you may want to read Doug Casey’s Energy Speculator, just this link.

Have a good one.

Uranium Resources Incorporated: Face an historical challenge from the Navajo!

Uranium Resources Inc logo 20 april 2008

The NRC (Nuclear Regulatory Commission) will be challenged in the federal appeals court for its approval of a source materials license for an in situ leach uranium mine, according to the Environmental News Service.

Although the Uranium Resources Incorporated (URRE) President Paul Willmott said at the time that modern in-situ leach uranium recovery technology

"Represents an acceptable and safe alternative to traditional mining methods historically used to recover uranium in New Mexico."

Navajo seal 20 April 2008

The Navajo disagree and are taking a legal stand to prevent uranium mining on their lands. The hearing is to take place on 12th May when Environmental Law Centre will argue that the NRC violated the Atomic Energy Act, the National Environmental Policy Act, and its own regulations when it issued decisions on numerous issues.

As the Navajo Nation have already banned uranium mining on Navajo land on April 19, 2005, this issue looks as though it could take some untangling, a case of big business versus the Navajo way of life and environmental considerations.

The article goes on to say that Uranium Resources have established a partnership with Itochu Corporation, one of Japan's largest corporations, to evaluate and develop the Church Rock site.

Keep an on the 12th May for the outcome of this hearing and a close eye on the URRE stock price.

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Paladin Energy Limited: stock sold off by Merrill Lynch

Paladin logo 10sep07

Merrill Lynch has sold off a parcel of shares in Paladin Energy Ltd thus extricating itself from its association with collapsed margin lender Lift Capital Partners Pty Ltd.

However, there are two directors of Paladin, Rick Crabb and Gillian Swaby, who are disputing Merrill Lynch’s right to liquidate the shares. This is a bit of a messy squabble that both parties could do without at the moment. However, it appears that Merrill have already sold the shares which are now the subject of a legal battle in the Federal Court in Perth. The directors claim that

“ They maintain that at all material times they had beneficial ownership of shares held by a nominee of LIFT Capital Partners Pty Ltd, and "that they will continue the legal proceedings they commenced to protect their interests in these shares including for repurchase of those shares if these have been sold"

The article, carried in The Sidney Morning Herald goes on to say that; ‘Last week, Lift Capital Partners Pty Ltd went into voluntary administration after its investors were spooked by concerns over the viability of its margin lending model. Merrill Lynch is Lift's sole secured creditor and is owed close to $600 million, secured against stock worth between $700 to $800 million’

It’s a real shame that it comes to this, which is of course a distraction away from the main event. We don’t own any of this stock but we do wish them well and that they can put these issues to rest quickly.

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Have a good one.

Uranium spot price eases to $68/lb-$69/lb

Uranium spot 16 April 2008

The chart is courtesy of TradeTech.

Despite a $3/lb slid in the spot price the long-term price remains firm at $95/lb and that is the number that we should be focusing on. No doubt this change to the spot price will send some investors to the exit door, but is it really a time to sell?

This latest update comes from the web site called The UX Consulting Company, one of the foremost publishers of data regarding uranium. In a commentary carried by Reuters a trader is reported as saying:

"It doesn't appear to be any immediate underlying demand from the utilities ... so it keeps on softening off, It is possible for prices to fall further, generally people are well covered,"

The report goes on to say that according to a fund manager (we wish they would use names)

"The number of companies that keep on producing supply shocks, albeit small, is increasing and the number of reactors being planned is increasing,"

Looking down a list of uranium stocks they appear to have had a reasonable day. This news may not have got to them yet or just maybe enough is enough, as the volatility of the spot price is having less of an impact now?

To reiterate the longer term uranium price is still firm at $95/lb so we are not selling any uranium stocks. You, of course have to make your own decisions, as we are all different with unique objectives, aversion to risks, etc.

As for a buying opportunity, yes this could be it, however we are waiting a little longer for some sort of confirmation that this sector is on the move north.

Have a good one.

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Aurora Energy after the vote!

The Labradorian logo 15 April 2008
The minister for Lands and Resources, William Barbour said: “the message the government is sending to the communities is not that they are anti-development, but rather they are taking time to ensure there is responsible development taking place on Labrador Inuit Land.”

Endeavouring to get a handle on the situation regarding Aurora Energy we came across this article carried by The Labradorian entitled 'All is not lost'

The minister went on to say that: “Just looking at the economy and job loss is looking with tunnel vision. We need time, we can't be forced into decisions that are rushed. Our time lines are important as well, "

So it now appears that Aurora Energy will have to wait three years while the government compiles a land use plan, formulates its own environmental assessment legislation and staffs up a land and resources division.

The bottom line would appear to be that uranium mining can be accommodated, however, it has to be implemented correctly with all due care and attention to the regulations, once they are compiled.

Dr. O'Dea said "We strongly believe that we can demonstrate to the Nunatsiavut government that uranium mining can be safely carried out, with the utmost care for the integrity of the environment and that Aurora-Energy representatives would continue to hold public discussions on uranium mining. "

Maybe as the the land use plan takes shape some relaxation could be afforded to Aurora to enable them to carry out preparatory work we as move forward?

All we can do now is wait and see!

Aurora Energy is currently trading at $3.95, down from a 2007 high of almost $20.00, has a market capitalisation of $289 million and is not for the faint hearted.

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Jordan’s Uranium for a French Nuclear Plant

Kuwait Logo 14 April 2008
This appears to be a straightforward swap, one state of the art French nuclear power plant for access to Jordan’s uranium deposits. Jordan's uranium reserves are estimated to stand at approximately 180,000 tons, according to government sources, which is a significant amount.

The uranium would be mined to pay for the reactor with any surplus revenues going to the Jordanian treasury. According to MENAFN, the Kuwait News Agency KUNA The International Atomic Energy Agency (IAEA) is supportive of Jordan's plans to rely on nuclear technology for peaceful purposes.

Similar remarks were carried in an article by the Al-Arab Al-Yawm paper on Sunday where the source is said to have indicated “the deal came after talks with two companies, a British and a French company, and the details of the deal signed with the French company would be announced at a later time.”

So it would appear to be a win-win situation for both parties, we have to applaud France for being proactive and getting out there and securing this deal. They get another supply of uranium in return for a nuclear power plant, thus increasing their credibility in the region.

Have a good one.

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The Shaw Group Inc: To build two new nuclear power plants!

Shaw logo 10 April 2008

The Shaw Group Incorporated have announced that they have been awarded an Engineering, Procurement and Construction (EPC) contract by Georgia Power Company for two Westinghouse AP1000 nuclear power units and related facilities.

Chairman, president and CEO, J.M. Bernhard, said:

"Nuclear energy is vital for the future of our nation's electricity supply system as the demand for clean, reliable and cost-effective power continues to soar. We applaud Georgia Power for its leadership role in choosing new nuclear power and the world's most advanced reactor technology as part of its balanced supply portfolio approach to meeting future electricity needs."

The announcement goes on to say that the two AP1000 units are expected to be placed in service in 2016 and 2017, respectively. A timeframe of eight to nine years’ appears achievable to us, we do tend to become a little suspicious when a contractor puts in a ‘fast track’ programme to complete the project in record-breaking time. However, we would also draw your attention to the wording EPC, which as we read it takes the project to the end of the construction phase. Beyond construction there is also a commissioning phase, which could add another year or so to the timescale, unless this activity has been included within the construction period, which is not clear to us at the moment.

Each of these units has a generating capacity of 1,100 megawatts and would be constructed at the existing Vogtle Electric Generating Plant site near Augusta. This project is being undertaken with Westinghouse a relationship that goes back to the design and construction of America's first commercial nuclear power plant at Shippingport, Pa., which began operation in 1957.

This is great news for uranium bugs so lets hope that more organisations and governments see the light and become proactive and face up to the future demands for energy which are not about subside.

In an internal note to employees the company had this to say:

“Without a doubt, this contract is the most significant milestone in the rebirth of nuclear power plant construction in the United States. Following our recent agreements with South Carolina Electric & Gas and Progress Energy to move toward the finalization of similar EPC contracts, today’s announcement is a clear signal that the long-awaited nuclear renaissance is finally underway in the United States. It has been a long journey, but our ultimate destination is now in sight”

Please note ‘nuclear renaissance is finally underway’.

And about time Too!

Have a great day.

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