Saskatoon's mega-uranium miner Cameco announced Wednesday that flooding and dewatering issues continue to plague its Cigar Lake project, the world's largest undeveloped uranium mine, possibly delaying the start of production until 2011.

Completion of the second phase to seal the water inflow, which flooded the underground project on October 23, 2006, was originally planned for completion during the third quarter of this year. Cameco said it now expects "it will require a number of additional months to seal the inflow and dewater the mine."

"In addition, in order to ensure a more conservative approach, we and our partners are examining whether an alternative route out of the mine is required prior to beginning excavation in areas at elevated risk of water inflow, and whether the second shaft needs to be completed to provide additional underground ventilation," the company said in a news release. "Completing the second shaft as a priority item and the delay in completing phase two...would set back the planned production startup date from late 2010 to 2011."

Uranium Short Sellers Make Record Bets Against Cameco
Source: Bloomberg  07/17/2007

An unprecedented number of short sellers are attempting to exploit the uranium mania that prompted more than 12 mining companies to quintuple their share prices during the past four years.

Demand from utilities to fuel nuclear reactors has plunged 72 percent from an April 6 peak, according to TradeTech LLC, which has tracked uranium prices since 1968. In the second week of July, 3.4 million pounds of the metal was available, more than three times the amount purchased by power companies.

Investors in Cameco Corp., the world's largest uranium producer, in June placed a record number of wagers the stock will decline, according to data compiled by Bloomberg. Uranium for immediate delivery had its first drop since May 2003 last month and has fallen to $129 a pound, down 6.5 percent in three weeks.

"It would be unwise to be betting the other way in the short term,'' said Peter Richardson, head of commodity strategy at Craton Capital in Melbourne, which manages $315 million, and the former global head of metals research at Deutsche Bank AG. "We're looking at a period of excess in the spot market."

Shares of Saskatoon, Canada-based Cameco lost 15 percent since June 15. The stock closed last week at C$53.25 (US$50.83) after trading below C$10 four years ago. Cameco shares in June had more bets that its price will fall than any other company in the Morgan Stanley Capital International World Energy Growth Index, a global equity benchmark.

Uranium Stocks Tipped to Resume Upward Path
Source: thewest.com  07/14/2007

The roller-coaster ride of uranium stocks is about to crank up again, with expectations the price of yellowcake, which has been treading water over the past few weeks, will bounce up again next week.

Uranium stocks, including both the handful of actual producers and the myriad of wannabes, have been standout sharemarket performers, basking in the glow of a booming uranium price.

But the fizz has deserted the sector over the past few months, raising fears the uranium bubble may have burst as the yellowcake price eased nearly $US3 a pound to $US133/lb.

The uranium price is updated only weekly and in early April sent investor fever soaring when it jumped 19 per cent to $US113/lb, the biggest rise seen since prices were first recorded in 1968. The catalyst was supply concerns stemming from forecast production cuts at Energy Resources of Australia’s Ranger mine and delayed initial output from Cameco’s huge Cigar Lake project in Canada...

Investment bank UBS this week released a bullish forecast for the metal, tipping it would reach $US200/lb next year and increasing its forecast average price for this year to $US127/lb, up from $US95/lb.

Uranium Price Falls Again: Possible Buying Opportunity
Source: Seeking Alpha  07/17/2007

Uranium prices fell for the third straight week as buyer interest continues to cool. TradeTech's spot price indicator fell US$4 to US$129 per pound of uranium, it said in Friday's issue of Nuclear Market Review.

An auction of 392,000 pounds of U3O8 equivalent last week drew limited interest from buyers as the availability of supply from other sellers made auctions less appealing, TradeTech said. Cameco Corp.'s (CCJ) announcement that the start up of its Cigar Lake mine could be delayed another year until 2011 demonstrates the anticipated shortfall that remains in the long-term uranium market.

While total worldwide demand for 2008 to 2013 is estimated at 1.1 billion pounds, planned production is forecasted to be roughly 0.9 billion pounds of U3O8 equivalent, the report said. Planned production problems could push this shortfall higher.

...But has recent weakness led to a buying opportunity in uranium equities?

They may be exiting the downtrend for the year, according to Matthew Smith of TheInvestar Group. "We may see the juniors move a little ahead of producers at this point, in terms of percentage moves upward as investors move back into the most beaten up stocks," he added.

RBC Analyst: Low Uranium Prices Could Turn Away Investors
Source: Mineweb  06/18/2008

If low uranium prices persist, investors may turn tail from the industry jeopardizing important future exploration and development, says RBC Capital analyst Adam Schatzker.

In our opinion, the current spot market price level will likely have far reaching implications if it remains at such low levels for too long, most importantly, in our view, will be disinterested equity markets that might cease funding uranium exploration and development.

We believe that the absence of equity market participation in the uranium industry would constrain the ability of uranium supply to meet the growing demand, which, in turn, could threaten the ability of global utilities' new reactor build programs.

Adam Schatzker's comments were in reaction to recent trade data that has spot prices for uranium ranging between $57 to $59. Mr. Schatzker said he believes the demand side of the spot market continues to be the weak link, but noted buyers seem content with buying at ever decreasing prices.

Surprisingly, spot volumes are on track to reach the 30 million pound mark for 2008 - a level not seen since 2006 - and may do most of that volume at falling prices.

Over at Canaccord Adams, analyst Scott Finlay said lower-than-expected prices in Q1 and Q2 have wreaked havoc on his U308 forecasts, forcing him to reduce price assumptions through 2011. Still, Mr. Finlay's new $69 price assumption for 2008 remains 16% higher than the current spot price and his 2009 forecast of $80 is 35% higher...

The analyst added that uranium prices will begin strengthening following the quiet summer period and into 2009 on the back of new buying from utilities.

Ernst & Young Finds Private Equity Houses May Be Targeting Mining
Source: Mineweb.com  07/12/2007

In a recently released report, Ernst & Young Global Mining and Metals Center declared that the mining sector, which used to be of little interest to private equity houses, may now be under reconsideration as a private equity target.

Ernst & Young asserted in their report, "Mining Is Now the Time for Private Equity," that mining management is "behaving more astutely in limiting capacity expansion and future overproduction. As a result, normal supply/demand economics are being established."

"Short-term cash returns are potentially higher than acquisition prices would suggest, making the exit a less critical part of the overall return to private equity investors," the financial consultants suggested. "Coupled with the availability of IPO, the opportunity for private equity to make a target return on mining investments is greater than ever before."

Queensland's Uranium Mining Ban 'Nonsensical' Says Ian Macfarlane
Source: qbr.com  07/11/2007

Sharp rises in the spot price for uranium have triggered an exploration boom for the mineral according to Australian Resources Minister, Ian Macfarlane.

The latest figures on exploration expenditure by the Australian Bureau of Statistics (ABS) show a record investment in mineral exploration, driven by record prices for many mineral commodities and strong demand from China and India.

In the 12 months to March 2007, uranium exploration expenditure rose more than 70 percent to $77 million, with around 200 companies looking for uranium in 2006 - up from 34 companies in 2005.

"Most expenditure is in South Australia and the Northern Territory, the only jurisdictions that allow uranium mining," says Mcfarlane.

"While Western Australia and Queensland also have significant uranium deposits, nonsensical state government uranium mining bans mean those states aren’t reaping these economic rewards."

Spot Uranium Price Drops, But Niger Rebels Pressure Miners
Source: Seeking Alpha  07/09/2007

The markets got what they were promised - further short-term uranium price weakness.

For the first time since May 2001, the spot uranium price dropped twice in two consecutive weeks.

According to Nuclear Market Review [NMR] editor Treva Klingbiel: Sellers are for the first time in many, many months showing a willingness to sell below the current published price in order to attract a willing buyer. As a result, TradeTech's Spot Price Indicator dropped to $133 per pound U3O8, a decrease of $2.00 from the June 30th Exchange Value.

NMR reported current active spot supply rose to more than 3.2 million pounds U3O8 equivalent. The closely watched active supply/demand ratio also rose - to 3.5 to the advantage of future uranium buyers. This confirms a reversal of the supply/demand ratio which favored sellers in late 2006 and early 2007. In mid December, we reported at least nine buyers were seeking about 5 million pounds U3O8. Klingbiel characterized active demand as 'extremely weak,' and explained there was an absence of 'have to' demand in the market...

The next potential squeeze on uranium supply could come from terrorism, not nature.

The world's seventh and eighth uranium producing mines are found in the Republic of Niger: the underground Akouta and the open pit Arlit. Together, they produced 3434 tonnes of uranium in 2006, according to the World Nuclear Association. This accounted for more than eight percent of the world's mining production last year.

How badly would this impact a tight uranium market if either of the Niger mines stopped producing?

A Paris-based spokesman for the Niger Movement for Justice [MNJ] Seydou Kaocen Maiga told reporters this weekend:This region has been declared a war zone by the government and in this situation we cannot allow the Chinese to continue extracting natural resources while civilians are being killed.

Uranium Bull Market Far From Over
Source: Seeking Alpha  07/09/2007

...We believe there is a lot of fear in the uranium sector. As for greed, there is some, especially in the early stage exploration companies, but this is not a cause for alarm for the entire sector.

This also means that the uranium industry has not yet entered into a manic blow-off phase of the bull market. Easy money may be over in the sector, but there is still a lot to be made by carefully selecting the stocks that will be the next acquisition targets.

There are only a limited number of companies that have established resources and defined production plans. Some of them aspire to become significant players in the sector but have insufficient internal growth prospects to meet their objectives. Understanding this, they will look to make acquisitions.

Cameco Corp (CCJ), the biggest uranium producer in the world has not made any acquisitions thus far but definitely will in a not-too-distant future. We are certain that selective buying in the sector will continue to bring investors handsome profits.

Is The End of the Uranium Rush in Sight?
Source: Seeking Alpha  07/06/2007

After an uninterrupted four-year rise, uranium prices have finally met some resistance, and investors are weighing the probability of the uranium rush coming to an end, with the metal's prospects as a long-term source of alternative energy.

Late last week, TradeTech reported a US$3 per pound decrease for spot uranium prices to US$135. The end-of-June figure still represents a US$2 gain from a month earlier.

"After 23 straight months of tight supply, rising spot prices, and intense bidding for material, buying interest has waned considerably and the market now sees increasing interest on the part of sellers to move material," the industry monitor said in its Nuclear Market Review...

While continuing to view the uranium market as "fundamentally sound," RBC Dominion Securities analyst Adam Schatzker thinks the supply-demand balance is in a precarious state and any supply shocks should have a major impact on the market. He thinks prices could continue to fall in coming weeks, pointing out than any spot price above US$100 per pound is strong on a historical basis. RBC forecasts spot prices will average US$120 per pound in 2007 and peak at US$145 in 2008, before declining over the long term.

Spot Uranium Price Takes Temporary Dip
Source: Seeking Alpha  07/03/2007

The pressure on the spot uranium price is off. Perhaps this will end the weekend price watch, which has taken on the cloth of a ‘hurricane watch.’

After 47 consecutive months without a drop in price, weekly spot U3O8 had a small hiccup. It was inevitable. In 85 percent of those 47 months, the uranium price surged higher.

According to the month-ending edition of Nuclear Market Review [NMR], the spot uranium price registered at US$135/pound at the end of June – down by US$3/pound from the previous week.

Uranium Price Falls For the First Time in Four Years
Source: Bloomberg  07/02/2007

Uranium prices fell after almost four years of gains as power utilities slowed purchases, industry consulting company TradeTech LLC said.

Spot prices for uranium oxide concentrate dropped US$3 to US$135 a pound last week, Denver-based TradeTech said June 30 in its weekly Nuclear Market Review. Prices rose almost 13-fold to a record $138 over the previous 47 months, driven by supply cutbacks and speculation by investment funds.

The last time monthly prices declined was May 2003, according to TradeTech.

“Prices must come down sooner or later,” said Ossi Koskivirta, nuclear fuel purchase manager at Fortum Oyj, which runs two atomic plants in Finland.

“They`re far above production levels. It`s an unhealthy situation with such high prices.”

Uranium has surged in 40 out of the past 47 months amid resurgent demand for nuclear power as an alternative to energy created from greenhouse-gas forming fossil fuels. Prices spiralled after Cameco Corp., the world`s largest supplier, halted its Cigar Lake project in October because of flooding, removing 10% of projected supply from the market.

Cameco's McArthur River Uranium Deposit an Absolute "Gold Mine"
Source: Mineweb.com  07/01/2007

You could say Cameco Corp. is sitting on a veritable gold mine these days, but such a compliment would actually undersell the value of the high-grade uranium buried in its flagship McArthur River mine in northern Saskatchewan.

With spot uranium prices around $135 a pound and the mine producing an industry best 21 percent pure uranium ore, the product piped up from the half-kilometre deep deposit is far more valuable than anything you'd find in a typical gold mine.


The mine -- which is also 30 percent owned by France's state-owned nuclear group Areva -- holds 367 million pounds of reserves and should produce 18.7 million pounds this year, about 17 percent of global supply and enough to meet about 7 percent of U.S. electricity demand, the company says.

"It is the single most unique mine of any mineral commodity in the world," Cameco Chief Executive Jerry Grandey told reporters at the company's head office in Saskatoon this week.

Ecuador: Political Reform Should Bring No Major Storms
Source: stratfor.com  07/01/2007

Although Ecuadorian President Rafael Correa rules as a populist, he will be able to guide the Constitutional Assembly to a stable outcome that is not overly threatening to business interests.

Ecuador's political framework likely will see significant revisions -- with socialist tendencies -- in the Constitutional Assembly process starting at the end of 2007. However, Ecuador's political makeover will not be nearly as chaotic as Bolivia's, and the outcome will not be as threatening to business or the country's economic health as Venezuelan President Hugo Chavez's recent moves. Ecuadorian President Rafael Correa's "socialist" vision is primarily against the entrenched party system rather than against capitalism per se.

Australian Mining Stocks in Big Market Catch Up on the Canadians
Source: Mineweb.com  06/29/2007

Sydney-based Resource Capital Research (RCR) saw a major lift in market performance by Australian juniors in a catch up to Canadian stocks - the market leader in the uranium exploration boom.

The study released today also noted a dramatic advance in blueprints for in situ leach recovery (ISR) globally, with a big focus on South Australia, Kazakhstan and the United States.

Australian Broker Sees Longevity in High Spot Uranium Price
Source: Mineweb.com  06/25/2007

With strong support from governments the uranium market and its key players will provide "real investment opportunities and long-term outperformance."

A study by Southern Cross Equities on the uranium market chose Paladin Resources as a favoured vehicle for increased performance. It says that in the near term, with Canada's Cigar Lake project seriously delayed, that Kazakhstan may take up some of the required new supply for a growing global nuclear industry.

However, Southern Cross Equities' study pointed out that, like many countries, Kazakhstan is suffering massive skilled labour and infrastructure shortages, and new production could suffer serious delays.

"We believe a meaningful uranium supply response will be delayed until at least 2011," the report said.

Implications of the unexpected delay on Cigar Lake cannot be underestimated. Considering there is a 4-5 year lead time to convert uranium to a reactor fuel source, utilities require long-dated contracts of at least five years for security of supply. "Consequently, the massive spike in the uranium spot price is reflecting a significant gap in the supply horizon. Despite market scepticism, we think the current uranium spot price is very sustainable for at least the next 4-5 years."

Hedging Their Bets
Source: The Gold Report  06/20/2007

It’s still too early to tell exactly what impact the newly launched NYMEX uranium futures exchange will have on the industry. While the volume of trading on NYMEX is low, there’s a huge volume of speculation from industry observers and participants on what lies ahead.

George Bell, President and CEO of UNOR, Inc., a uranium exploration and development company, is unequivocal in his belief that NYMEX will “increase prices at a faster rate. The future quoted price on the NYMEX for uranium gives the producers and buyers plus financiers a good indication of tomorrow’s value… Since the NYMEX will raise the uranium price, it will make it easier for our company to raise capital for exploration and development.”

Bell reflects one of the most widely held views of the new financial instrument. “It (NYMEX) is very positive, the uranium market has ‘come of age’ on pricing. Pricing is now out in the open.”

Doug Casey, author of Casey’s International Speculator, expressed enthusiasm for NYMEX while cautioning that “…it’s important to note that volume and open interest are still so trivial that that price indication is not a reliable measure of the future…the contract is still far too young for anybody except commercial players, as the volume is almost non-existent at only 84 contracts.”

According to a recent Mineweb article, Chief Executive Gordon Miller of Simmer and Jack Mines (Simmers) said the average uranium stock climbed by 20% since December and this compared modestly to the large increase in the uranium price over this period. Meanwhile, the uranium price climbed from $60/lb from December last year to $135/lb on Friday, June 15th. Gordon added that “it was still early days for the futures contracts that were trading thin volumes at this point.”

Bob Lillie, Director of Investor Relations, Cameco Corporation also considers trading volumes too light to reveal emerging patterns or trends. “We are watching the trading to see how it develops over time. The volume is obviously very low at this point but if it should develop into a more active market, it is possible we could use it as a risk mitigation tool in the future. In the meantime, we are just observing market activity and getting more familiar with how the market works.”

The current volume of activity is right in line with expectations according to Randy Warsager, Vice President of Marketing for NYMEX. Warsager says that NYMEX is engaged in an intensive effort to educate the market, which in turn should boost trading volume. In a recent interview with The Gold Report, he explained: “We thought it was a reasonably healthy, modest beginning. Right now we are in the thick of a very aggressive educational campaign aimed at those on the commercial side…We expect to see more commercial participation over the next six months to a year as the players on that side learn more and more about hedging.”

One of the big questions looming over NYMEX is whether or not producers or utilities will buy these contracts in order to hedge the price. E. Peter Farmer, Chief Executive Officer of Denison Mines Corp. and President of the Uranium Participation Corporation, speaking with The Gold Report pointed out that that story is yet to be told. “Remember, this is a pure derivative play. There is no uranium backing any of the contracts that are written. It is a pure bet on where the price is going to be at a given time...It’s basically a financial guy sitting at a table deciding what his bets are going to be and whether another financial guy wants to buy that contract or not.”

Even if it’s too early to be sure how NYMEX will affect pricing, Peter Grandich, author of The Grandich Letter, sees nothing keeping uranium from hitting $200/lb. As recently noted in the Financial Trading Desk Blog, “Mr. Grandich expected that a hedge fund or Uranium Participation Corp., which buys physical uranium, might have taken some profits by now and actually sold some uranium. But they haven’t. ‘By them not doing that yet,’ said Grandich, ‘it convinces me that the US$200 target is more reasonable than we could even have imagined just six months ago,’ adding that some of these players got into the uranium play early at US$30 or US$40 or less. ‘It’s very hard to pass up on 300% and 400% gains, and they are doing that at the moment.’”

Macquarie Bank Ltd., Australia's biggest securities firm sees eye to eye with Grandich. “Uranium spot prices may reach $200 a pound within the next two years, buoyed by a shortfall in supply and increasing investment in the nuclear fuel by speculators. Bloomberg reports that Macquarie's price forecast is less bullish than that of Neal Froneman, chief executive officer of Toronto-based SXR Uranium One, who said the spot price may more than double to $250 a pound next year as demand outpaces production.

Uranium Will Peak in 2009, Lehman Says
Source: Bloomberg  06/11/2007

Uranium prices will rise through at least 2009 and won't "stabilise" until after 2015 because demand for the fuel is expanding faster than supply, Lehman Brothers Holdings forecast.

Uranium will average $120.06 a pound this year, rising to $167.49 in 2009, New York-based analysts Rohit Ogra and Edward Moore said in a report on Friday. Prices will probably drop below $70 in 2017. Uranium sold for $6.75 a pound as recently as 2001.

"Unlike some other commodities, such as aluminium and coal, prices for uranium are driven not by massive Chinese buying but by two decades of limited investment in the nuclear sector, and, along with that, limited investment in uranium mining," the analysts said in their report.

Uranium Prices Continue to Surge
Source: Mineweb.com  06/08/2007

Uranium prices continue to rise, increasing the cost of generating nuclear power and spurring investment in mining. The 143 percent jump on the uranium spot market since October, however, is being met with optimism -- hopes that uranium's growing pains will lead to a more sustainable nuclear fuel sector.

Analysts say the new price marker is nearing what may be a plateau for a uranium market that was so depressed by government inventories, to around $15 from the 1980s until earlier this decade, that there was little investment in mining and production of the material.

The two leading uranium information and consulting firms released late Monday their new prices for spot market purchases: UX Consulting pegged it at $135 per pound and Trade Tech at $138 per pound.

Peter Grandich Sees Uranium Climbing to US$200
Source: Financial Trading Post Desk Blog  06/06/2007

With the spot price for uranium rising further in the wake of two auctions last week, and another major deal with sxr Uranium One Inc.’s $1.6-billion friendly bid for Energy Metals Corp., surging investor interest in the sector continues unabated.

But is the end of this bull market for the nuclear fuel near? Not if you ask Peter Grandich, author of The Grandich Letter, who attributes rising prices to tight uranium supplies. Although he thinks we’re past the halfway point for uranium equities, he thinks uranium prices will rise to US$200 per pound. Market monitors Ux Consulting and TradeTech recently raised their spot prices to US$135 per pound and US$138 respectively, while long-term prices are at US$95 for both groups.

Mr. Grandich expected that a hedge fund or Uranium Participation Corp., which buys physical uranium, might have taken some profits by now and actually sold some uranium. But they haven’t.

“By them not doing that yet, it convinces me that the US$200 target is more reasonable than we could even have imagined just six months ago,” he said, adding that some of these players got into the uranium play early at US$30 or US$40 or less. “It’s very hard to pass up on 300% and 400% gains, and they are doing that at the moment.”

Uranium May Reach $200 in Two Years, Macquarie Says
Source: Bloomberg  06/05/2007

Uranium spot prices may reach $200 a pound within the next two years, buoyed by a shortfall in supply and increasing investment in the nuclear fuel by speculators, said Macquarie Bank Ltd., Australia's biggest securities firm.

The price, which reached $125 a pound in mid-May, will probably average $125 a pound this year, rising to $135 next year, Macquarie said in a June 1 report. RBC Capital Markets, UBS AG and producers Rio Tinto Group and SXR Uranium One Inc. are among those also forecasting further gains.

Spot Uranium Price Likely to Jump After Two Auctions This Week
Source: Platts  05/30/2007

While the spot price of uranium is likely to rise sharply after two
auction-like sales are completed Wednesday and Friday, the two leading
price-reporting firms late Tuesday were keeping their prices at last week's levels.

Ux Consulting maintained its price at $125 per pound of U3O8, while TradeTech kept its price at $122/pound U3O8.

The first auction this week is by Texas-based Mestena Uranium, which is accepting bids Wednesday for delivery of 100,000 pounds of U3O8 in June. The second auction is set for Friday by Georgia-based trader American Fuel Resources, which is said to be acting on behalf of an investment fund.

Uranium Names from Canada Getting Attention on Wall Street
Source: Canada.com  05/18/2007

This time last year, many U.S. money managers may not have recognized names like Denison Mines, Uranium One or Energy Metals Corp. But now, thanks to soaring uranium prices, supply constraints, accelerating demand from new nuclear reactors, and plenty of buzz, Canadian-listed names are turning heads on Wall Street.

This was definitely evident at a recent uranium conference in New York hosted by Raymond James’ Equity Capital Markets Group, where some 200 registrants represented U.S.-based hedge funds, other institutional money managers and consultants.

Australia's Labor Party Ends Ban on New Uranium Mines: What's Next?
Source: The Gold Report  05/14/2007

On April 28, Australia's Labor Party ended its 25-year ban on new uranium mines, which will allow the domestic uranium industry to grow and develop by encouraging new investment. Australia holds about 40 percent of the world's uranium

The new policy is not binding on state governments, however. Control still lies at the state level. As Doug Casey stated in his "April 29 — A Day to Watch for Uranium Investors" (The Gold Report 2/28/07), "Labor holds the balance of power in each and every one of Australia’s states and territories. Its regional governments’ attitudes toward yellowcake vary. New South Wales and Victoria ban all uranium-related industrial activity, even exploration. Queensland and Western Australia straddle the fence, allowing uranium exploration but not uranium mining. Tasmania has no ban in place, but has never drawn interest from uranium explorers. Only South Australia and the Northern Territory (neighbors in the middle of the continent) have allowed uranium mining."

Since ,the Party handed down its decision to end the ban on uranium mining, Queensland Premier Peter Beattie has sent mixed messages. Queensland holds most of the untapped uranium reserves in Australia. Beattie has said he would continue to oppose new uranium mines, yet he also has said he will abide by the Federal Leader's policy wish.

As the Labor Party meeting was getting underway, The Gold Report caught up with analyst John Wilson of Resource Capital Research (RCR), based in Sydney, Australia. Wilson publishes the "Quarterly Uranium Sector Review," which provides an outlook on uranium and analytical coverage of more than 20 uranium companies.

The GOLD REPORT (TGR): What’s your latest prediction on uranium pricing?

WILSON: We use the Uranium Participation Corp. share price and warrants as an indicator of what I call the forward curve for uranium, and it’s been a pretty good indicator to date. I’ve been using it for the last 18 months or so. It doesn’t necessarily fine-tune for weekly price events, but it’s a good indicator of broad trends and directions. It’s a leading indicator of uranium price trends by six to nine months.

TGR: : Now that the Labor Party has decided to end its long-standing ban on uranium mining in Australia, how will that affect the domestic mining industry?

WILSON: The Labor Party National Conference sets the policy for the Labor Party at all levels — federal, state, and local. The Labor Party’s decision to end its ban on uranium mining is not a legislative act, but a change in its policy. There’s no legislation banning uranium mining at the state level. As such, it’s now up to each of the individual states to determine how they will act on the Party’s policy change. Each state can determine for itself whether it will allow or disallow new mining.

In South Australia, Premier Mike Rann is strongly in favor of overturning the “three-mine” policy. That’s how the ban has been described over the years because it was put into place when there were three mines already operating, so it was effectively a cap at three mines for many years. The benefits of an end to the three-mine policy could flow through to South Australia very quickly because it has a supportive government and is strongly in favor of moving on new uranium mining in the state. South Australia already has the Olympic Dan and Beverly mines.

Western Australia has said they’re not going to overturn the three-mine policy regardless of what happens at the National Conference, and that seems to be a fairly black-and-white position, so that’s unlikely to change until the next state government elections.

In Queensland, Premier Peter Beattie initially said he wouldn’t overturn the Queensland state policy on uranium, regardless of what happened at the National Conference. Beattie said he didn’t want to impact coal exports from the state. However, coal exports from Queensland supply the steel industry, not power generation, so it doesn’t directly compete with uranium. Beattie then revised his original decision and for a period he was in favor of supporting policy set at the Labor Party National Conference. He has since reversed again, saying he will not support uranium mining in the state. The rationale behind his position has changed, so there is now some uncertainty in the market about Queensland’s resolve.

The overturn in policy could lead to a change in Western Australia and Queensland potentially in the mid-term. It at least lays the structural foundation for the states to get on board, and that’s significant. It takes three to five years to get uranium from advanced exploration into production. So even if the policy in a given state doesn’t change immediately, potential for a policy change is still within the three-to-five year time frame that it takes a project to get up and running.

TGR: : Do stock prices reflect investors’ expectations that this policy change may increase uranium mining in Australia?

WILSON: Yes, I would say so. In Australia there has been much anticipation that the three-mine policy would be overturned, and so investors have priced accordingly. Nonetheless, there will still be those who are surprised and I won’t be surprised to see a little price spike for some shares as a result of the news.

TGR: : You’ve reported that some advanced Australian projects are likely to benefit in Queensland and Western Australia. What about South Australia?

WILSON: Queensland and Western Australia have many more projects that went through full feasibility in the last cycle and are therefore higher profile. In South Australia, Crocker Well, now owned by PepinNini (PNN: ASX), went through full feasibility in the last cycle, and this project should benefit from the positive sentiment. Curnamona Energy (ASX: CUY) has an earlier stage project at Oban with a pilot stage ISL plant planned for the second half of this year, so that would be an early beneficiary also. It is an earlier stage project and has exploration risk associated with it. There’s also the Olympic Dam project expansion (BHP) and the advanced exploration project at Mt. Gee owned by Marathon (MTN: ASX).

Mulga Rocks — Private

Future Tense
Source: The Gold Report  05/08/2007

Another price surge rippled through an already supercharged market as the New York Mercantile Exchange launched its first-ever listing of uranium futures contracts on Monday, May 7.

NYMEX’s joint venture with Ux Consulting, the leading source of nuclear industry market information, changed the rules of the uranium game for all involved and sent the spot price to an all-time record of $120/lb.

According to ResourceInvestor.com, the June contract hit $140/lb in its first day, with January 2008 U308 trading at $150.50/lb. A Ux Consulting Company (UxC) spokesperson told RI that as the current date gets closer to the futures settlement date, “you’re going to see the gap narrow” between the spot price and the contracts.

Until now, utilities purchased fuel for their reactors in contracts that guaranteed supply but not a fixed price. The price floor was set at market price on contract-signing day, but they paid market price on the day of delivery.

The NYMEX/UXC project is intended to change that, said Jeff Combs, president of Ux Consulting. He said it will add transparency to the global uranium contract market and "development of a forward price curve."

"In other words, this contract runs out 36 months on a monthly basis so there will be price points, bids and offers out in the future indicating what people think is going to happen to the market and what position they're willing to take in either buying or selling depending on what they think the price is going to be," Combs said. "The only way you can get fixed prices in the future is to buy uranium on the spot market and hold it, but that's not too practical if you're going out further in the future, and especially since spot supplies are tighter now than they are likely to be in the future. And that's the other purpose of futures markets is it provides the hedging function."

What impact the NYMEX listing will have on the uranium market is open to speculation. StockInterview.com reported that uranium company stocks rallied last week in advance of the NYMEX listing.

Speculators and miners -- those affecting and setting the price now -- are likely to benefit, said James Finch, StockInterview.com’s senior editor."Everybody's on a wait and see -- except for the speculators," Finch told UPI. "Utilities see this as an opportunity to fix a price which has right now gone completely out of control."

Spikes in pricing have become almost routine as the pressure to satisfy a growing global energy deficit with nuclear power gives uranium nowhere to go but up. Since January of 2001, the spot price of uranium has jumped more than 1700 percent!

The futures contracts gives nuclear power plants “a forum to bet directly on gains and falls in the price of uranium, rather than speculating on the fortunes of miners, “explains Richard Simpson, in StockHouse.com.

Some believe the NYMEX futures could fuel speculation sending the price to the moon. "Futures trading is where speculators are going to get involved in uranium with both hands. Uranium futures could put us at $500 per pound in the blink of an eye, because they'll give hedge funds a way to trade in and out of uranium easily," says Sean Brodrick, editor of Red Hot Resources.

For those investing in uranium producers, there is nothing more we'd like to see than the prices to continue to trend higher or 'spike' higher," says Kevin Bambrough, a market strategist at Sprott Asset Management.

Results of a recent poll of a cross-section of SeekingAlpha’s readership showed that 83% believed that the NYMEX futures contracts would attract more interest in uranium. Seeking Alpha also got an expert opinion from TradeTech Chief Executive Gene Clark: "The most interested parties have been the electric utility company fuel managers, who seem to be willing to try anything new that will give them the power to halt the price run-up." He also pointed out utility fuel managers have "little, if any, experience in such (futures) markets."

By contrast, after having discussed futures trading with professional traders, Dr. Clark wrote that those with the most experience are the most skeptical. His conclusion, “Utility fuel managers want to use futures trading to hedge their upside price risk, while potential sellers generally expect prices to keep rising precipitously.”

Regardless of their role in the market, all involved seem to agree on one thing. Volatility will rule uranium’s future.

Lower Uranium Project Hurdles for the Mining States
Source: Mineweb.com  05/10/2007

South Australia and the Northern Territory, which host Australia's three operating uranium mines, have the added advantage of in-built rules, regulations and experienced bureaucrats for the approval processes for any new uranium mining projects.

The chief executive of Toro Energy Ltd, Greg Hall, says the time lines from board approval for development to processing first uranium ore has already been shown to be only about 18 months for both mining approvals and for community agreements, including ratification of native title agreements.

...Because timing is so important for new projects today, developers would try to undertake both mining and community agreements in tandem. However, before these processes could begin, developers also needed to have a scoping study or even pre-feasibility study. Either of these could also take 18 months or more.

The Uranium Juniors & Majors: A Symbiotic Relationship
Source: bestsyndication.com  05/04/2007

Fears about peak oil and the concept of uranium as a cleaner energy source have coupled in the industry’s collective imagination and forced the price of uranium to triple in the last year. On the supply side experts are alerting the public of shortages and many are saying that the uranium price will continue to climb as a result. With bio-energy solutions seen as being far-off in the future, uranium is being touted as nothing less than the solution to world’s energy and greenhouse gas problems.

Consequently, the juniors are aggressively exploring for the next uranium ore body. But as uranium decays, it emits radiation. For that reason uranium mining is subject to the most stringent regulations of any mining industry. The licensing process is lengthy and expensive and uranium production regulations make production prohibitive to juniors. So what becomes of a junior uranium company once it has a significant ore body? Conversely, how does a major like Cameco Corp. acquire more valuable uranium to meet growing demand and remain the industry leader it has been?

...Cameco Corporation, located in Saskatchewan, is the world’s largest uranium producer. During its May 1, 2007 First Quarter Results conference call the company outlined its exploration strategy, which directly involves using the expertise of junior companies. During the call Cameco management said that Cameco has already entered into alliances and joint ventures with exploration companies in Gabon in western Africa and in Nunavut.

Uranium Stocks Rally Ahead Of NYMEX Futures Trading
Source: StockHouse.com  05/04/2007

Uranium company stocks rallied this week in advance of the off exchange uranium futures trading on the New York Mercantile Exchange (NYMEX).

The NYMEX listed a uranium futures contract yesterday, May 7, as the energy and metals exchange looks to capitalize on surging interest in the nuclear fuel.

Whether the launch of futures contracts will be an advantage or disadvantage to the uranium market depend on who you ask.

The futures contract provides nuclear power plants with a vehicle to hedge against rising prices, which have surged more than tenfold in the past four years as commercial stockpiles dwindle and more plants are built. It would also provide a forum to bet directly on gains and falls in the price of uranium, rather than speculating on the fortunes of miners.

Analysis: New Step for Uranium Trading
Source: United Press International  05/04/2007

When the New York Mercantile Exchange launches a first-of-its-kind uranium futures contracts, it sets a new stage in the growing uranium market. But the project, a venture with Ux Consulting, is likely not to settle the rocky road uranium prices have ridden lately.

Uranium futures products traded on and off the exchange will be introduced on the CME Globex and NYMEX ClearPort platforms, ready for trade Monday.

Utilities buy fuel for their reactors in contracts that guarantee supply but not a fixed price. The price floor is set at market price on contract-signing day, but they pay market price on the day of delivery.

The NYMEX/UXC project is intended to change that, said Jeff Combs, president of Ux Consulting. He said it will add transparency to the global uranium contract market and "development of a forward price curve."

Active Spot Uranium Demand Dropped by 65 Percent in April
Source: StockInterview.com  05/02/2007

Trading in the spot uranium market came to a standstill in the latter half of April. According to Nuclear Market Review’s (NMR) month-end report, “Uranium spot market volume was relatively low for the month of April.” Only three transactions, amounting to slightly more than 550 thousand pounds U3O8 equivalent, were reported for the month.

NMR editor Treva Klingbiel wrote, “All three transactions were concluded early in the month.” According to records supplied by TradeTech, uranium transaction volume for the first four months of 2007 stands at the lowest in a decade.

“The severe upward price momentum, witnessed in early April, had largely dissipated by month end,” wrote Klingbiel. “Sellers became even more reticent to submit spot offers.” The drop in demand could also have been impacted by the upcoming NYMEX uranium contracts, as many wait for developments and liquidity in the futures markets...

Although the spot U3O8 price jumped to US$113/pound during April, the long-term U3O8 price indicator failed to budge. Long-term uranium remained at US$85/pound.

Uranium Now 'Hottest' in Resources
Source: BrisbaneTimes.com  05/02/2007

Despite huge share price gains in the past year, uranium stocks have been deemed the "single hottest pick in the entire resources sector" by an analyst from the investment bank which first predicted the commodity's price would hit $US100 a pound.

"Any investors who don't have uranium exposure are betting against the market and, in my view, that's a bad bet," RBC Capital Markets analyst Chris Lancaster told his company's uranium conference in Sydney.

He predicted the uranium price would rise beyond its current record level of $US113 a pound.

Nymex Uranium Futures Survey Results: More Interest, Volatility in Price
Source: SeekingAlpha  04/30/2007

Earlier last week, Dow Jones MarketWatch reporter Myra Saefong contacted us with some very interesting questions about the NYMEX uranium futures contracts. These contracts will commence trading on May 7th. Previously, we had made inquiries about the viability of this futures market, and realized that a few expert opinions would be insufficient to do this story justice.

Rather than simply respond with our opinion, we decided to poll a cross-section of our readership. While not everyone was surveyed (we randomly emailed only about 1500 subscribers), we did receive an adequate response – nearly 400....

Two Expert Opinions

Over the past week, we’ve spoken to several industry experts about the impact of uranium futures on the uranium price. Will it work? Yellowcake Mining director Dr. Robert Rich, who has spent several decades in every aspect of the nuclear fuel cycle, talked to a number of utility executives at the recent nuclear fuel conference in Budapest. He felt they were pretty excited about the prospects for uranium futures trading. “It may be too early to tell,” Dr. Rich told us, “but I think futures trading shows promise.”

In a prepared response, TradeTech chief executive Gene Clark wrote of those he has talked with, “The most interested parties have been the electric utility company fuel managers, who seem to be willing to try anything new that will give them the power to halt the price run-up.” He also pointed out utility fuel managers have “little, if any, experience in such (futures) markets.”

Australian Labor Party Lifts Ban on New Uranium Mines
Source: Mineweb.com  04/28/2007

Although Australia's opposition ALP has lifted its opposition to development of new uranium mines, it is up to the States to set their own policies and most State governments are still opposed.

The anticipated win for Federal Australian Labor Party (ALP) Leader Kevin Rudd to end the party's rigid "No New Mines" policy for uranium happened today at the ALP national convention, but by a narrow margin.

The anticipated public and political changes have seen an enormous uranium boom in Australia and there are now more than 140 listed explorers with many operating in WA. . .

In the last few days of this week uranium stocks generally went for a run, with some explorers reaching new peaks. All this was in anticipation of Rudd succeeding in killing the ‘No New Mines' policy.

Nuclear Energy to See Rebirth in North America
  04/17/2007

Concerns over greenhouse gas emissions from coal-fired electricity plants will see a rebirth of nuclear energy in North America and continue to drive the price of uranium to record highs, finds a new report by CIBC World Markets.

CIBC World Markets' April Monthly Indicators report notes that environmental opposition has already forced TXU, the largest utility in Texas, to scrap some 6,000 megawatts of planned new coal-fired capacity in favour of building as many as five new nuclear facilities.

"If you can't get coal-fired generating capacity licensed in Texas these days, where can you get coal plants built?" notes Jeff Rubin, Chief Economist and Chief Strategist at CIBC World Markets. "Coal-fired utilities find themselves the primary target of a tidal wave of greenhouse gas (GHG) legislation that is sweeping across state legislatures. Weaning American power consumers off cheap and abundant domestic coal supply is rapidly shaping up to be the frontline battleground of the carbon wars in North America.

With this rapid growth, Mr. Rubin states that finding enough uranium to power all those reactors is already becoming an issue. "Prices have more than doubled over the last six months and with utilities still needing to contract roughly a third of their uranium fuel requirements over the next five years, more and more are scrambling to lock in supplies." As a result, he predicts uranium oxide prices will hit US$140 per pound this year and US$160 per pound by late 2008 - more than triple the price of uranium last fall.

The Power of Uranium Wows Wall Street
Source: nysun.com  04/16/2007

It's an impossible dream come true, like running a three-minute mile or hitting eight home runs in a single baseball game — recommending a group of stocks and seeing them rise an average 100%- plus during the next six months.

This dazzling achievement, part of the uranium boom, is the work of commodities expert Sean Brodrick, who last October recommended seven uranium investments — six stocks and one Canadian uranium fund. Since then, the seven have shot up between 30.6% and 156.8%, with the average increase an incredible 106.9%.

Chief reason for the runup: the surging price of uranium, up more than fivefold the last two years and 19% in the past week alone.

Citing a worsening supply squeeze and a phenomenal increase in demand, Mr. Brodrick, a uranium bull who plies his trade at the Safe Money Report investment newsletter in Jupiter, Fla., contends the rise in the price of the metal and uranium stocks is far from over, that "both have nowhere to go but a lot higher."

U.S. Nuclear Energy Push Could Generate Global Competition for Uranium
Source: Mineweb.com  04/16/2007

Austin, Texas, strategic consulting firm Stratfor suggests that a renewed push for U.S. nuclear energy "could lead to even more global competition for uranium and a boom in nuclear energy investment."

The biggest stumbling block to domestic nuclear power is the lack of a nuclear storage facility, Stratfor warned in a recently published global market brief.

The proposed Yucca Mountain national repository in Nevada remains stalled, while concerns about terrorism have slowed the Bush Administration's Global Nuclear Energy Partnership (GNEP) promoting the reprocessing of nuclear fuel. Meanwhile, the storage of nuclear waste at nuclear facilities has drawn substantial local opposition.

Sky High
  04/12/2007

Setting a breath-taking pace, Uranium is shattering one record after another on its relentless ascent into heady, triple-digit terrain. Last week the spot price climbed to $113.00 per pound. According to Nuclear Market Review (NMR) editor Treva Klingbiel, “This is the largest single increase since uranium prices were first reported.” The spot uranium price jumped by nearly 19 percent this past week.

Julie Ickes reports in Uraniumstar.com that “the spot uranium price has risen by 57 percent” since the beginning of 2007. “In January 2001, spot uranium could be purchased for as little as US$6.40. Since then, it has jumped “more than 1700 percent!” According to Gene Clark, chief executive of TradeTech, which publishes Nuclear Market Review, “We are about $2 short of the all-time high in inflation-adjusted dollars.”

Runaway prices are being fueled by a classic showdown between demand and supply. There is simply not enough uranium available to meet the mushrooming demand from the nuclear power industry. Flooding at Cameco’s Cigar Lake Project and Energy Resources of Australia’s Ranger Mine have severely limited production and contributed to the growing shortfall.

An auction in the U.S. last Wednesday for 100,000 pounds of yellowcake (industry slang for processed nuclear fuel) set the latest benchmark according to Mandi Zonneveldt, Uraniumstar.com: “The bidding came as Australian uranium producer Energy Resources of Australia warned that wet weather would hamper its production for at least a year. “

How much more upward momentum remains in uranium’s wild ride? From Resource Investor.com, Neal Froneman, president and CEO of SXR Uranium One, said in an interview (April 10) that “he anticipates global demand for uranium to increase by 2.5% annually over the next decade. He predicts prices will rise to US$150 per pound by the end of 2007.”

At Doug Casey's Uranium Stock Summit in Las Vegas this week, analyst Kevin Bambrough of Sprott Asset Management said that his company has already exited some of its uranium holdings because they have gotten too popular. He said he believes uranium prices will top out in the next 12 to 18 months.

Peter Grandich, in The Grandich Letter (April 7), offers his assessment. “My target of $100 is upon us. It’s still hard to see why it can’t go higher but I feel we’re more than halfway through this bull market. It’s not yet time to abandon ship, but one should be very selective going forward and not to be afraid of lightning up too early. I am sure you would rather end up being a year too early versus a day to late. We can still see $125+ but I would sooner see it stay around $100 for the balance of the year.”

Resource Capital Research recently predicted the price would touch $US125 a pound this year and rise as high as $US140 a pound in 2008.

J. Taylor writes in his newsletter, Energy & Energy Tech Stocks (April 11) sees no slowdown ahead in the fast rising price. “A few industry forecasters are suggesting that uranium could rise to as high as $500 per pound before it would render nuclear power uneconomic.” What troubles Taylor is “the fact that the price has been doubling in rather short intervals. At some point, higher uranium prices do begin to impact plans to build more nuclear power plants. And to the extent global warming is caused by manmade carbon dioxide emissions, the deterrence of new nuclear power plant construction due to higher prices would seem to be a shame.”

Uranium Bull Market Too Overheated?
Source: ResourceInvestor.com  04/12/2007

Doug Casey, chairman of Casey Research, told listeners at the Uranium Stock Summit that there are three stages of a bull market: Stealth mode, worry mode and mania mode. He said the uranium bull market is entering the mania mode.

Although the bull cycle is nearing and end, Casey said a lot of money can still be made. He said that mania stage in the dotcom era lasted about 2 to 3 years, and some of the best profits came out of it.

Rick Rule of Global Resource Investments today told listeners that we are already in the midst of a uranium mania, “an insane mania.” He recommended selling.

Top Uranium Stock Picks
Source: resourceinvestor.com  04/12/2007

Professionals at the inaugural Uranium Stock Summit in Las Vegas, Nevada agreed that the secular bull market in uranium is in the final stages. But these experts also agreed there is still money to be made. Their advice: Be selective.

Jim Mustard of Haywood Securities, Rick Rule of Global Resource Investments, Kevin Bambrough of Sprott Asset Management, Phil O’Neill of MP1 Capital and Marin Katusa of Casey Research offered suggestions on investment strategy with insight into their top three uranium picks...Jim Mustard told listeners to make commitments not only on assets but on management’s ability to bring them to fruition. He said investors should be sure to note the management’s road map and mining strategy.

Spot Uranium Reacts to Pressure, Reaches $113 a Pound
Source: Mineweb.com  04/10/2007

Managing Director (of Toro Energy, an Australian explorer) Greg Hall was quick to comment on today's spot price for uranium, which has jumped by $18 to $113/lb. His comments came while most in London were breakfasting and commentators in North America were sleeping off the Easter holiday. He noted "this price is again based on an auction of 100,000 lb last Wednesday in the US, and was also impacted by ERA's announcement of a lower production forecast next year from the Ranger Mine in the Northern Territory [Australia] after recent floods there.

Essentially ERA is predicting about 1,200 t lower production for 2008 compared to 2006, as it will have difficulty accessing higher grades to maintain their head grades. This amount is the planned annual output of Paladin's new Langer Heinrich mine which last month announced its first commercial shipment. So," he emphasized, "from a global supply perspective, it is just as if Langer Heinrich has not started, keeping pressure on the price."

India’s Uranium Mining to Double This Year
Source: Mineweb.com  04/10/2007

As Russia Monday offered to help India lift restrictions on its civilian nuclear trade, Indian scientists said that the nation's uranium mining production would double this year.

The nation has already begun designing its next generation of fast breeder reactors and plans to build 12 new reactors for nuclear power over the next two years. Baldev Raj, Director of the Indira Gandi Centre for Atomic Research (IGCAR), predicted that by 2020 India "will emerge as the leader on fast breeder technology." The fast breeder reactor is a fast neutron reactor designed to breed fuel by producing more sustainable fissile material than it consumes.

RBC says Uranium Bull Market Thriving and Forecasts Average $100/lb
Source: Mineweb.com  04/03/2007

An RBC Capital Markets research report released last month asserts that uranium remains in the middle of a bull market, with an average price of $100/lb forecast for this year.

In their report, "Investing in Uranium Companies," RBC provides a good introduction to the mining sector, which is applicable to a broader range of hardrock minerals and metals.

RBC's analysis asserts that a supply-gap will exist in uranium after 2013.

The analysts suggest the two best strategies that a uranium producer or developer can use to drive shareholder returns are "becoming a producer and positioning the company for acquisition...

RBC uses a formula of forward earnings per share (EPS) or CFPS multiples to reflect the valuation of uranium companies with existing operations. For those developing new projects, the analysts use a net asset value (NAV) approach. "For exploration companies where it is too early to calculate an NAV, we look to the enterprise value per pound of U308 (EV/lb) in resources."

Three Stealth Uranium Investments
Source: Casey Energy Speculator  03/29/2007

It’s not 1998 anymore. In that year, Casey Research Chairman Doug Casey first recommended a then little-known commodity: uranium. The metal was trading in the single digits, with few except nuclear engineers and ivory tower academics paying any attention to it.

Fast forward to 2007. Uranium prices have exploded nearly tenfold to $85/lb, and appear poised to go even higher as growing global demand for nuclear power taxes an already tight supply of yellowcake. In 1998 there were less than 10 publicly traded companies exploring for uranium. Today—by many estimates—there are hundreds.

Yet, while the future for uranium metal looks bright, the outlook for many of the stocks is less certain. To be blunt, most of today’s uranium issues are overhyped and overpriced, exposing investors to the ever-growing risk of a pullback in share prices.

This dichotomy—great commodity, so-so stocks—presents a significant investment challenge. Simply put, investors looking to profit from the outpouring of interest in yellowcake today must be far more creative than previously if they hope to uncover sub-sectors of the uranium space that haven’t already been overinflated by the hurricane wind of promotion. A tall order to be sure, but one that we at the Casey Energy Speculator have been digging deep on for several months.

Below, we discuss three areas where investors can still find value largely unrecognized by the lumpeninvestoriat—the kind of potential that can lead to double- and even triple-digit gains once those beyond the leading edge of the bell curve catch on and start piling in.

#1: Basement-hosted Deposits

Every uranium investor is probably already aware of the flooding problems at the Cigar Lake mine in northern Saskatchewan. The mine—which was slated to produce 16% of world mined uranium supply—was plunged into doubt in October 2006 after water began gushing into the underground workings.

The problem is that the Cigar Lake ore is hosted in sandstone—a rock type through which water flows easily, to the detriment of engineers. But not all deposits in Saskatchewan’s prolific Athabasca Basin are sandstone-hosted. Some uranium occurs in so-called “basement” rocks—more competent, drier layers beneath the sandstone. The problem is that many basement deposits are deep, which increases mining costs.

But it’s a lesser-known fact that more accessible basement ores are found outside of the Athabasca Basin proper. In these outlying areas, the sandstone that once covered the basement has been eroded, making deposits easier to get at. In fact, one of the Basin’s largest mines—Key Lake—was found in such a setting.

But while basement deposits are extremely prospective, they have been largely ignored by investors, who focus more on those companies working the thick of things in the middle of the Basin. The basement deposits have been ignored largely because most of the recent mines have been found underneath the sandstone and so exploration has tended to focus there. In addition, until recently, scientific understanding of basement deposits was also poor, but considerable advancements have been made over the past 20 years, since the last uranium cycle. Therein lies the opportunity. Many companies with prospective basement deposits have none of this upside factored into their share price, meaning we can take a low-cost ride on the potential of such plays.

One of our favorites is JNR Resources’ Way Lake project. The property has yielded phenomenally high-grade samples (greater than 40% U3O8), and yet many investors have never heard of the play. That will likely change this summer when JNR (sym: JNN. TSX-V) begins drilling. Some high-grade intersections are a distinct possibility and could well bring investors running to this company and others working the basement, including Hathor Exploration (HAT.TSX-V, Triex Minerals (TXM.TSX-V), and Forum Uranium (FDC.TSX-V).

#2: Low Grade Makes a Comeback

For years, low uranium prices meant that exploration companies searched mainly for high-grade ores—the type of deposits that all but guarantee a profit even during downturns in the market. But with prices rising, the industry is now realizing that lower-grade deposits may be important sources of yellowcake. After all, such ores are very profitable with uranium at multi-year price highs.

In fact, one of the world’s largest uranium mines—Rossing, Namibia—works a bulk tonnage target at grades less than 0.1% U3O8. It’s no wonder that a number of companies are now quietly looking for the next Rossing. Where might such a mega-deposit be found? Perhaps very close to home. The province of Quebec has long been known to host so-called pegmatite uranium deposits—similar to the geology of Rossing.

A few explorers have been catching our attention with potentially high-impact targets in this region. For example, Uracan Resources (URC. TSX-V) has assembled a prospective land package in southern Quebec, with trenching yielding results of 0.2% U3O8 over as much as 40 meters. The company will be drilling aggressively in 2007 to prove up a resource, which shows signs of being sizeable.

And the coming year may see the discovery of a completely new Rossing-type deposit in northern Quebec. Quebec experts Azimut Exploration (AZM.TSX-V) along with partner Northwestern Mineral Ventures (NWT.TSX-V) spotted the potential in the area a few years ago, confirming their hypothesis through sampling in 2006 at the North Rae project which yielded assays of up to 0.5% U3O8—ten times the average grade at the Rossing deposit. And like Rossing, the North Rae mineralized system appears to extend over several tens of kilometers, giving it potential for huge ore reserves.

The initial drill program on the target will be completed during the coming season, possibly representing a turning point and driving home to investors that Quebec has the potential to host a world-class deposit. (We’ll be paying very close attention to the progress of the drill program in the pages of the Casey Energy Speculator).

#3: Go Where No Company Has Gone Before

The recent uranium boom has led the new crop of explorers to nearly every country on the planet. Wherever there are available yellowcake deposits, junior companies have lined up to stake land, swing scintillometers and Swiss-cheese the ground with drill holes.

The key word being available. While many nations are open to uranium exploration, there are several localities where authorities have been less inviting. Two of the most significant are India and Brazil. Both have known deposits of significant scale—in fact, Indian drills have cut high-grade uranium up to 10% U3O8.

And yet officials in these countries have not been granting exploration licenses. At least not yet. In recent conversations with Indian government officials, we’ve learned that the country may soon be opening up to exploration, with talks already underway with several companies already well positioned to lead the charge into India’s high-grade basins.

Another emerging district we are keeping an eye on is the African island of Madagascar. Although the nation’s geology is extremely prospective for uranium, the country was effectively closed to exploration for much of the past century due to an oppressive dictatorship. But with the changes in that country’s government over the last decade, we are starting to see permits being granted. Already a number of companies have accumulated significant land packages and we expect the news to start flowing sooner rather than later.

While there is no question that the easy profits in uranium have been made, the big money is yet to come… you just need to know where to look.


If you sign up for a trial subscription to the Casey Energy Speculator right now, Doug will send you a special report containing the research he’s done on 5 Uranium Winners he thinks have the potential to deliver big gains.

The Casey Energy Speculator is one of the nation’s most respected monthly publications dedicated entirely to providing unbiased information on unique opportunities in uranium, oil and gas with the very real potential to double or better in the next 12 to 24 months. For information on a six-month risk-free trial and to have your free special report “5 Uranium Winners” rushed to you immediately, click here.

World's Hottest Uranium Stocks
Source: Mineweb.com  03/27/2007

Prices for uranium (uranium oxide, U3O8, to be exact) have soared in the past few years as record crude oil prices have forced public and private sectors to announce rafts of nuclear reactors as a cost-effective energy alternative. Long-established uranium producers have benefited enormously; the market capitalization of the No 1 producer, Cameco, is close to US$14bn.

Uranium prices have grown ten fold in just five years. Between the early 1990s and 2004, uranium markets were in a supply/demand deficit, balanced by inventories held by nuclear generators and traders. Prices started turning in 2001, from between $5 and $10/pound, to current quotes around the $80/pound mark. Over the past five years, Cameco's NYSE stock price has increased from less than $3 a share to more that $45, with current quotes around $40.25.

The global uranium rush has triggered an explosion in exploration, along with entrepreneurs dusting off dormant projects, and rushing to the market. This raises serious questions of potential risk for equity investors, confronted by a plethora of choices.

Nuclear Energy Renaissance Ignites Uranium Boom
Source: Reuters  03/27/2007

Uranium prices are closing in on $100 a pound -- a 10-fold increase in five years -- and prices could climb sharply higher yet as more governments embrace atomic energy despite dwindling supplies of yellow cake to power the reactors.

The spot price for uranium jumped $4 to $95 a pound (lb), according to weekly report from UxC, a leading publisher of uranium prices, a big leap from $60 in December and from around $9.50 in late 2002.

Years of under-investment in uranium mining caused by moribund prices and the anti-nuclear lobby has left the world short of the material used to fuel nuclear reactors.

Big Squeeze
Source: The Gold Report  03/26/2007

The price of uranium has risen 810% in the past four years according to Keith Kohl of the newsletter, Energy and Capital. On Friday TradeTech's Nuclear Market Review magazine raised the weekly spot uranium price to US$95/pound. Many analysts predict the price will explode past the $100 mark this year.

According to Kohl, “the emerging global energy crisis has thrown nuclear energy into the spotlight. While a few alternative energy sources are making headway, future global demand will require energy on a vast scale - something nuclear power can provide.”

Uranium’s bull run is a spectacular example of demand stampeding supply. According to Moneyweek.com, the world’s 440 nuclear reactors require more than 150 million pounds of uranium every year. Although totals aren’t in for 2006, “demand probably topped 180 million pounds.” There are 28 reactors under construction and 62 more being planned. According to the International Atomic Energy Agency, the IAEA, there may be as many as 130 new nuclear power plants being built in the next 15 years.

Cameco’s disastrous flooding at the world’s largest undeveloped, high-grade uranium mine, its Cigar Lake Mine in Saskatchewan, rattled the nuclear power industry last fall. Then along came another mine flooding in Australia when cyclone George struck, putting a big squeeze on already tight uranium supplies. Energy Resources of Australia had to declare force majeure on its sales contracts. ERA estimates that first-quarter production will drop 20% to 30% from last year.

Doug Casey, author of Casey’s Energy Speculator, sees another force at work pushing prices higher. “A number of money managers have been buying physical uranium in the hope of simply holding it while the price rises.” Casey notes that although it is unclear how many groups actually own physical uranium, “… analysts generally agree that hedge fund demand has helped push up the price.”

Unlike commodities such as gold or oil, there is no formal exchange for uranium. Uranium price indicators are developed by a small number of private business organizations, like The Ux Consulting Company, LLC (UxC), that independently monitor uranium market activities, including offers, bids, and transactions. UxC maintains that “the low prices that persisted through the 1990s up until 2002 held back production, exploration, and procurement activity, even though there was strong evidence early in this decade that the market was experiencing a fundamental shift that would lead to pressure on production and much higher prices.”

Cameco Updates Cigar Lake Remediation: New Production Target 2010
Source: SeekingAlpha  03/22/2007

On Monday Cameco updated their remediation of the Cigar Lake mine, with production now targeted for 2010.

This is a full year behind their estimate in late 2006, but my sense is that the news is largely priced into the market at this point, given the fact that Cameco had delayed the estimate twice since the remediation process began in November.

Uranium Heats Up
Source: ACN Newswirre  03/20/2007

Uranium bulls are snorting and stamping the ground as world prices rise towards the $US100 a pound level.

The bullishness will have a chance to be expressed publicly later this week at the Paydirt 2007 Uranium conference to be held in Adelaide on Thursday and Friday of this week.

The conference will be held against the backdrop of the firming world price; the changing debate about uranium thanks to fears about global warming; the small shift in sentiment in Australia as the Howard Government has pushed the idea of nuclear energy, and of course some corporate activity such as the Paladin merger proposal with Summit Resources.

New Techniques to Boost US Uranium Mining Production
Source: SeekingAlpha  03/20/2007

If you study the news releases, several companies have discussed the setting up of one or more satellite plants in conjunction with their In Situ Recovery [ISR] uranium mining operations. In order to help readers better understand what exactly a 'satellite plant' is, we interviewed Mark Pelizza of Uranium Resources about how this relatively new operational...

A larger uranium deposit, such as one at Cameco's Smith Ranch in Wyoming, requires a Central Processing Plant. The 'mother plant,' as it is called in the trade, can complete the entire processing cycle from uranium extraction through loading the resin, stripping the uranium from the resin with a solvent (elution), precipitating, drying and packaging.

With a satellite plant, also known as a Remote Ion Exchange [RIX], smaller and distant deposits can also be mined and then trucked to the mother plant. With an RIX operation, the front-end of the 'milling' cycle can be begun independent of the much larger mother plant. It is the same ion exchange column found at central processing facility. The mobility factor makes RIX an attractive proposition for many of the new-breed uranium producers. Rather than piping the water and uranium across a longer distance to the mother plant for the entire processing cycle, the modular nature of RIX allows for multiple columns at each well field doing the ion exchange on the spot.

ERA Mine Flooding Further Tightens Uranium Supply
Source: SeekingAlpha  03/12/2007

After Cameco Corp's (CCJ) Cigar Lake flood at the company's northern Saskatchewan uranium mining project rattled analysts and utilities who previously expected sufficient uranium would be available to meet the needs of nuclear utilities, along came another mine flooding in Australia. The March 7th announcement by Energy Resources of Australia was different. While Cigar Lake effectively removed uranium mining supply in 2008, ERA's 'force majeure' announcement withdrew supply anticipated for this year.

Even before the force majeure, TradeTech's Nuclear Market Review was inclined to increase the consulting service's weekly spot uranium price indicator. Flooding at ERA's Ranger mining operations confirmed the already very tight uranium supply would get much tighter. And it will cost delinquent utilities who did not stockpile sufficient uranium to meet their reactor requirements to pay more for new uranium supply they may have need of.

Presently at US$90/pound, it appears a sure thing that spot uranium would rise past the century mark and perhaps gallop higher...