Hathor Exploration (Photo credit: Wikipedia)

Paladin Energy* (PDN : TSX )

July 29
Tempting acquirers?

More than a handful of analysts and market commentators have mentioned Paladin Energy as a possible takeover target during the past couple months.

Bloomberg weighed in – highlighting that Paladin is tempting acquirers from Canada to China with a stock price that’s less than the value of its net assets. Citing an analyst at Australian based Resource Capital Research, Bloomberg noted that with Japan’s decision to turn two reactors back on this month signalling a possible bottom for uranium prices, and Paladin projecting this fiscal year to post its first profit since beginning
production of the nuclear fuel.

The Perth-based company may attract interest from industry heavyweight Cameco (CCO). Furthermore, according to an analyst at Octa Phillip Securities, Chinese companies seeking uranium are also potential bidders for the Paladin, which may fetch more than A$1.5 billion, an upwards of 70% premium over recent levels, if a buyer offered the same price per pound of uranium paid in takeovers of Hathor Exploration, Extract Resources and Mantra Resources.
The Octa Phillip analyst added, “We’ve seen that the prices paid by strategic investors for long-term uranium supply are
certainly a lot more than equity market values for uranium stocks.” Paladin said last week that it plans to boost output to 8.0-8.5
million pounds of uranium in the year ending in June 2013, up from 6.9 million pounds in the previous year.

A billet of highly enriched uranium that was recovered from scrap processed at the Y-12 National Security Complex Plant. Original and unrotated. Source: http://web.em.doe.gov/takstock/phochp3a.html (Photo credit: Wikipedia)

Cameco* (CCO : TSX : $22.64)
Denison Mines* (DML : TSX $1.38
Paladin Energy* (PDN : TSX : $1.25)
Ur-Energy* (URE : TSX : $0.79)
Uranium One* (UUU : TSX : $2.40)
Uranium Participation* (U : TSX : $5.74)
Catalysts coming.

One Bay Street brokerage published a report Thursday titled, “Beat the (Atomic) Clock – Uranium Supply Crunch and Critical Catalysts on the Horizon”, in which the brokerage stated, “We have strong conviction that compelling supply-demand fundamentals and near-term industry catalysts will spark a recovery in deflated uranium prices and reverse the recent downward trend in equity valuations.”

Among the potential catalysts, the brokerage highlighted;

i) Resumption of
Chinese new-build approvals by year-end 2012

;ii) Further restarts of Japanese reactors in early-2013; and,

iii) End of the Russian HEU supply agreement in December 2013.

The brokerage made specific comments (and initiated coverage) on five
uranium companies and the U. The companies are Cameco – “Still Bellwether of the Space”; Denison – “Explorer Again, with a
Takeout Premium”; Paladin – “Turning the Corner”; Ur-Energy – “The Wait is Over: Production Next Year”; and, Uranium One – “Fast Growing, Low Cost Producer”.

Also on Thursday, a biennial report from the United Nations nuclear body and the Organisation for Economic Cooperation and Development (OECD) stated that world nuclear capacity is expected to grow by 44% to 99% by 2035, little changed from the edition two years ago. Referring to the long-term impact of the Fukushima accident on the global nuclear industry, Gary Dyck, head of nuclear fuel cycle and materials at the International Atomic Energy Agency (IAEA) said, “We see it as a speed bump. We still expect huge growth in China.” Nuclear capacity is due to significantly expand in Asia led by China, India, South Korea and Russia. The report also noted that the sector will become more reliant on mined production after next year upon the end of Russia’s deal to supply material from old weapons to the U.S. uranium market. Under the Megatons to Megawatts treaty, Russia has supplied the U.S. market with about 25 million lbs a year .

of downgraded uranium from old nuclear weapons.

Historic (non-43-101 compliant) reports estimate that the Shirley Basin project holds over 10 million pounds U3O8 at an average grade of 0.21% U3O8, while the Lucky Mc holds an additional 4.7 million pounds U3O8 at a similar grade.
Additionally, URE’s management highlighted that the tailings facility at the Shirley Basin site is one of the few remaining facilities in the U.S. that is licensed by the United States Nuclear Regulatory Commission (NRC) to receive and dispose of by- product waste material from other in-situ uranium mines.

 URE’s Presidentand CEO, Wayne W. Heili, stated:

Nuclear Regulatory Commission (Photo credit: Wikipedia)

“Adding the Shirley Basin and Lucky Mc properties to our flagship Lost Creek Property and other exploration projects provides URE excellent prospects for the expansion of our operations over coming years.” The transaction calls for the purchase of all issued and outstanding shares of Pathfinder from its sole shareholder, COGEMA Resources, an AREVA Mining affiliate, for US$13,250,000.

The initial payment of US$1,325,000 was made upon execution of the SPA and will be held in escrow pending the approval by the NRC for the change of control of the NRC License for the Shirley Basin mine site. Closing of the transaction is anticipated in 6-12 months. URE also reiterated that the projected completion date for its Lost Creek Project final environmental impact statement, and issuance of a record of decision by the U.S. Bureau of Land Management, is anticipated later in the summer of 2012.

Cameco (Photo credit: Wikipedia)

UEX Corp.* (UEX : TSX : $057

Attractive price / Spec

Shares of UEX spiked Tuesday July 17 morning, as investors jumped into shares of the Athabasca-focused junior uranium explorer.

In a July 16 filing, it was reported that a member of UEX’s Board of Directors purchased 22,400 shares of the company in the public market on July 13 at a price of $0.50 per share. In late May, following the filing of a short form prospectus to raise up to US$1 billion by Cameco (CCO), the likes of UEX (which is ~23% owned by CCO),  Denison Mines DML) and Paladin Energy (PDN)  were in the spotlight as speculators and analysts attempted to rank the front-runners on a possible Cameco shopping list. The takeover talk frenzy has settled down in recent weeks.

Getting back to business, most recently on the exploration front, UEX and partner AREVA announced the results from its first three directional drill holes from the continued exploration of the Colette Deposit on the Shea Creek Project. The new results continued to outline thick unconformity mineralization at Colette. Shea Creek hosts the Kianna, Anne, Colette and 58B deposits and is one of UEX’s ten 49%-owned Western Athabasca Uranium Projects joint-ventured with AREVA.

At the conclusion of the 2012 exploration program, UEX intends to update its mineral resource estimate for Shea Creek to include the results from the 2010, 2011 and 2012 drilling campaigns

Paladin (Photo credit: commorancy)

Paladin Energy Ltd.

 July 16

PDN : TSX : C$1.25 Buy , Target C$2.10

FY Q4/12 operating results demonstrate meaningful progress; 

Investment recommendation

Paladin Energy released better than expected FY Q4/12 operating results (U308 production of 2.05 million lbs was 11% above our forecast and increased by 15% q/q) and issued higher than expected FY 2013 production guidance (8.0-8.5 million lbs U308 vs. our 7.8 million lbs estimate).

 BUY rating and 12-month target of C$2.10 per share.

 Our C$2.10 target is based on 1.0x our 10% NPV estimate of C$2.10 per share. Our BUY rating is supported by our view of the company’s near-term growth profile, attractive relative valuation, and gradually improving uranium fundamentals.

While Paladin has struggled with its ramp-up at both operations over the past three years, the company appears to have finally turned the corner, having surpassed our production forecast for the third consecutive quarter. We note that the company achieved a record 96% of nameplate capacity in FY Q4/12.

Investment highlights

We forecast FY 2013E – 2015E production of 7.8m lbs, 8.3m lbs, and 8.3m lbs, which remains unchanged. To be conservative, our FY 2013 production forecast remains below the low end of guidance.

Valuation

Paladin is currently trading at a 47.5% discount to our revised 8% NPV estimate of C$2.38 per share, which compares to our uranium producer coverage universe of a 32.7% discount.

Saskatchewan – 2007 (3) (Photo credit: Smulan77)

Denison Mines* (DML : TSX : $1.45)

Denison Mines* (DNN : AMEX : US$1.42)

Rready for the dance and hoping for multiple bids.

Note : You may repost any article – please credit www.amp2012.com .

Denison Mines begun this month leaner, after shedding its U.S. unit, and as some are speculating – more attractive to potential suitors. Since announcing the closing of its U.S. unit divestiture transaction with Energy Fuels (EFR) , shares of Denison have moved strongly higher. Denison will now continue as a uranium exploration and development company with interests in Saskatchewan, Zambia and Mongolia.

As well, Denison will maintain its 22.5% ownership interest in the McClean Lake uranium mill, located in northern Saskatchewan, which is one of the world’s largest uranium processing facilities. This Spring, following Denison’s initial announcement of its planned U.S. unit divestiture and the filing of a preliminary short-form prospectus by (already cash-rich) Cameco (CCO)  to raise up to $1 billion, at least a couple Bay Street analysts and market watchers noted that consolidation in the uranium sector may be on its way.

 In late April, Bloomberg highlighted that Denison shares surged after the initial announcement of the sale of its U.S. unit sparked speculation it was positioning itself to be acquired. It was noted that Denison’s decision came three months after Rio Tinto (RIO)  secured a toehold in the Athabasca by outbidding Cameco for Hathor Exploration. An analyst at one of Bay Street’s largest brokerages pointed out that the global mining giant needs more assets to justify the investment in Hathor. Adding that, Denison would double Rio’s resources in the Athabasca basin. Another Bay Street analyst told Bloomberg (in late April) that Cameco, which has a stake in Denison’s largest development project, may also try to keep Rio from expanding in a region it has explored (its own backyard) for decades.

 The analyst went on to speculate that a bidding contest could make Denison costlier than Hathor.

Now with the sale of its U.S. unit complete, speculators are hoping that Denison’s new look will attract multiple suitors .

Cameco (Photo credit: Wikipedia)

June 20,2012

Cameco* (CCO : TSX : $21.89),

Paladin Energy* (PDN : TSX : $1.29)

Uranium One* (UUU : TSX : $2.69)

During an interview with The Regina Leader-Post, Tom Gitzel, President and CEO of one of the world’s largest uranium producers, answered the following after being asked his view of the state of the nuclear industry post-Fukushima?

 ”There are 435 reactors operating or operable today, 63 under construction today as we speak, and we expect 96 net new reactors by the end of the decade. That’s growth we haven’t seen since the 1970s – Everybody (in the nuclear industry) took a time out and said, ‘Oh, oh, what happened? Let’s try and take the learnings out of Fukushima.’ What are they?

Well, don’t underestimate the potential to have an eight-point-something earthquake followed immediately by 15-metre (wave) tsunami. That was beyond the design (of the reactors at Fukushima). Nobody ever dreamed that would happen. Now the Japanese are building seawalls in front of their units that will knock that (tsunami) down and they’re taking the supplementary power out of the basement, which was a huge problem at Fukushima, and putting it up on the hill. So those learnings are being applied.”

Gitzel highlighted, “The Japanese are spending money on it. So that gives me confidence. If they thought the game was over forever, they wouldn’t be spending the money.” He further stated, “It’s a hard reality, but what are your options in Japan? Thirty percent of your electricity generation is nuclear. We’re the biggest fans of renewables you’ll find, but quite frankly when the wind’s not blowing and the sun’s not shining, you’ve got to have baseload backup. That can come in the form of coal, oil and gas – and it’s not $2 (per thousand cubic feet) North American gas, it’s $15 (per mcf) gas.

So the industrial customers there say, “We need a reliable supply of energy that’s cost-efficient or we’re going to move our industry off shore.”

 In part :

Former Billiton corporate logo. (Photo credit: Wikipedia)

May 31

BHP Billiton Ltd.‘s (BHP-N61.56-2.46-3.84%) move to reconsider major spending plans may delay the construction of a promised potash mine in Saskatchewan, another sign the commodity “supercycle” is gearing down as slower global growth cools demand.

The Jansen project, estimated to cost as much as $12-billion, has the potential to become the largest potash mine in the world and is one of three major projects BHP was slated to consider for approval later this year. But comments by the global mining giant’s chief executive officer, Marius Kloppers, suggest the company could postpone such developments.

“You should not expect in the next six months any new major approval of projects,” Mr. Kloppers said in an interview with Caixin Media Co.

“The economics of some of these projects has changed,” he said. “I think for the next two years, 18 months perhaps, we will just wait and see how things develop.”

Resource companies around the world have become nervous as growth in China and India cools, easing global demand for commodities. The mining industry has enjoyed an extended stretch of high prices, but this so-called supercycle has escalated capital costs and prompted some governments to raise royalty rates in an effort to cash in on the boom. Now that supplies are more closely aligned with demand and costs remain hot, megaprojects may be losing their allure.

A delay at Jansen is a “reasonable possibility,” said Joel Jackson, an analyst at BMO Nesbitt Burns. But BHP must also be mindful of its relationships in Saskatchewan, he noted.

The Jansen project played a key role in BHP’s attempt to acquire Potash Corp. of Saskatchewan Inc. (POT-T40.63-0.35-0.85%) for $38.6-billion (U.S.) in 2010 in a hostile bid. The takeover was blocked by the federal government, which had sought guarantees from BHP that it would proceed with the Jansen development. But BHP, needing to carry out due diligence, was not in a position to give such assurances.

BHP may still issue a go-ahead for Jansen by year-end, but current trends in the potash market serve as a headwind.

Shares of Potash Corp. have tumbled amid uncertain demand from major buyers of the mineral, used in making fertilizer to boost crop output, and Potash Corp. itself has curtailed some production this year.

China consumes about 50 per cent of the world’s steel-making products; 40 per cent of the world’s aluminum and copper; and between 5 and 20 per cent of the world’s uranium, oil, and potash, according to BHP.

Mr. Kloppers’ concern extends to two other major projects: a copper-uranium expansion and an iron-ore expansion project, both in Australia. The three, along with other expansion plans, have an estimated price tag of around $80-billion (U.S.), a pricey sum at today’s commodity prices as the company emphasizes maintaining its dividend and solid credit rating.

Cameco (Photo credit: Wikipedia)

Paladin Energy* (PDN : TSX : $1.20),

Cameco* (CCO : TSX : $19.79),

Denison Mines* (DML : TSX : $1.63),

UEX* (UEX : TSX : $0.68),

May 24

The world’s largest publically-traded uranium company has just filed a short-form prospectus to give it the right to raise US$1 billion. However, many are speculating what Cameco might need/use the cash for? The company had $1.4 billion in cash/investments at the end of the first quarter and no material shortterm debt, which is more than sufficient to fund the development of Cigar Lake. Leaving many to believe CCO might be gearing up to make an acquisition.

 One Australian-based analyst highlighted that Paladin Energy, who’s market cap has been significantly beaten down, would be the obvious choice if a takeover is in the cards. An acquisition of PDN would give CCO an additional ~8 million lbs of annual U3O8 production. Also commenting on the situation, an analyst at one of Bay Street‘s largest brokerages stated, “It is possible that CCO has filed this prospectus to give it flexibility in the event of making an acquisition.”

Highlighting that PDN, Denison Mines and UEX (CCO already owns ~22.6% of UEX) as potential targets for CCO. The analyst noted that uranium equity valuations have fallen sharply recently, and there are certainly opportunities available for a well-funded company like CCO. He added that PDN is the only significant producer that could be acquired. CCO tried to buy Hathor Exploration last year, but was outbid by Rio Tinto (RIO)

.Finally, an analyst at U.S.-based Dahlman Rose made similar comments. Noting that:

 i) CCO’s recent shelf offering may indicate a large acquistion attempt is coming;

ii) CCO has enough cash at hand, proceeds will not be used for general corporate purposes; and

 iii) Given the “spate” of uranium M&A activities in last six months, CCO may be positioning itself for a large takeover.

Nuclear power plant in Cattenom, France Deutsch: Kernkraftwerk in Cattenom, Frankreich (Photo credit: Wikipedia)

Cameco* (CCO : TSX : $21.71)
Paladin Energy* (PDN : TSX : $1.39)
Uranium One* (UUU : TSX : $2.59)

May 10

 Citigroup has published a note on the impact that the new French President may have on France’s nuclear
industry.

Currently, nuclear power is France’s primary source of electricity, representing almost 80% of the country’s total
electricity production – the highest percentage in the world.

Citi writes that France’s new president will be faced with a number of, primarily longer-term, issues in the context of Energy Policy and the fact that this will be the first Socialist President in France since the European Electricity and Gas Market Liberalisation started probably makes it more difficult for the capital markets to anticipate his course of action.

Citi does not expect any closures (other already planned Fessenheim closure) during the next 5-year period. However, the brokerage stated that it expects a review to be launched into the capacity needs of the country on a 15-20 year view. Ultimately, Citi expects the role of nuclear to gradually decline in France but that is most likely going to be via actions favouring other technologies rather than via actions against nuclear.

Elliot Lake Water cap 1996 (Photo credit: Gord McKenna)

DENISON MINES (T-DML) $1.95 +0.07

Announced that the company will issue its first quarter 2012 results on the evening of Wednesday, May 9th and hold a telephone conference on Thursday  morning to discuss financial results.

 But there are a few thinking or hoping that there might be even more to talk about.

Back in mid-April, Denison sold some of its U.S. uranium mining assets to Energy Fuels at a discount. But RBC Securities said at the time “that the deal might make Denison much more attractive to potential buyers. It notes what’s being sold suffered from unpredictable grades, fluctuating production and high cash costs.”

They also noted at the time that “Canadian asset, however, offer the potential for ‘world-class’ discoveries” and it’s 22.5% stake in the McLean Lake mill is also a plus” says RBC.

A few days later, Versant had said, “With this week’s move to sell its US assets, Denison Mines has made itself look especially good to mining giant Rio Tinto.”

Versant suggested, according to a Dow Jones Newswire, “that Rio needs to follow up its acquisition of the Roughrider deposit with more purchases if it wants to be a player in Canada’s uranium-rich Athabasca Basin, and Denison would be a good fit.”

They continue, “Rio wasn’t likely interested in Denison’s US assets” Versant suggests, “and what makes this situation even more interesting is what Cameco will do, since it has long held a dominant position in the Basin.”

Having said all this, we notice the brokers don’t get all that excited about the story as BMO has lowered their target from $1.90 to $1.80; Bank of Commerce from $2.40 to  $1.70 and Royal Bank has drastically lowered their price expectations as well.

Tracks (Bomb the Bass and Jack Dangers album) (Photo credit: Wikipedia)

a new interview – you can read my MO.com interview at http://www.mo.com/Jack-A-Bass-and-Associates
and please vote for me by using the vote button on that page – Thanks

 

Jack A. Bass, Jack A. Bass and Associates – Economist | Featured on MO.com

www.mo.com

Jack A. Bass B.A. LL.B is one of Canada’s foremost economists and forecasted the dramatic rise in the price of gold and the fall in natural gas prices. He has completed (graduating at the top of his class) the securities course as part of a large American retail broker. His public service work inclu…

Uranerz is positioned to become America’s next uranium producer and is the rare gem that is poised on the cusp of providing near term rewards.  In the interest of time and space, it should suffice that we have researched this company and hasten to bring it to your attention.  Production is slated to begin in 2012.

Today Uranerz reported that it continues to receive good uranium grades in holes drilled for well-field installation. The recent hole was the best hole ever drilled by the Company.

Read the full article by clicking here…

Schematic Diagram of a CANDU reactor: The primary heavy-water loop is in yellow and orange, the secondary light-water loop in blue and red. The cool heavy water moderator in the calandria can be seen in pink, along with partially inserted adjuster rods. { (Photo credit: Wikipedia)

Uranium Sector

Great potential – but they used to say the same thing about me

March 27

Cameco (CCO : TSX : $22.62)

Paladin Energy (PDN : TSX : $2.03)

Uranium One (UUU : TSX : $3.07)

                               Stop me if you’ve heard this story before

 Barron’s highlighted, “Uranium prices are poised to steadily increase over the next few years,” adding, “Supply is projected to decline just as developing economies turn to nuclear for their expanding electricity needs.”

According to Australia’s Bureau of Resources and Energy Economics (BREE), beginning in 2013, secondary sources of uranium, mostly from the decommissioning of nuclear warheads, may dry up, as a U.S.-Russia accord to dismantle such warheads ends. Mine output won’t rise fast enough to offset both higher demand and lower secondary supplies, the government agency said. BREE further noted that uranium consumption is highest when a new nuclear reactor first starts operating, so the slew of reactors slated to come online bodes well for the market. BREE sees global mine output of the nuclear fuel at 58,200 metric tonnes this year and growing to 86,900 metric tonnes, with prices reaching $74.20 per pound U3O8, by 2017.

Separately, on Monday, Cameco stated that Japanese utilities are currently not selling excess uranium, Japanese partners are still committed to mine development and that it sees some Japanese reactors restarting in the near future.

Cameco’s CEO Tim Gitzel said, while speaking at the Reuters Mining and Steel Summit in Saskatchewan, that,

“We’re partners with some of the Japanese utilities in some mining projects. We’ve talked to them about whether they’re staying in the game and indeed they are staying in. They’re continuing to invest in exploration.”

STOP ME IF you’ve heard this story before :

 While the timeline remains unclear, Cameco is confident that Japan will bring at least a portion of its fleet back online in the near future.

Separately, on Monday, Cameco stated that Japanese utilities are currently not selling excess uranium, Japanese partners are still committed to mine development and that it sees some Japanese reactors restarting in the near future. Cameco’s CEO Tim Gitzel said, while speaking at the Reuters Mining and Steel Summit in Saskatchewan, that,

“We’re partners with some of the Japanese utilities in some mining projects. We’ve talked to them about whether they’re staying in the game and indeed they are staying in. They’re continuing to invest in exploration.” While the timeline remains unclear, Cameco is confident that Japan will bring at least a portion of its fleet back online in the near future.

BOTH The E-book Apprentice Millionaire Portfolio

                And the Print Edition  of  

Stock Market Magic : Building Your Apprentice Millionaire Portfolio

are  AVAILABLE NOW     on www.amazon.com

 (the print edition  – 500 pages soft cover )

  We are interested in finding marketing partners for our books and workshops. Reply to jackabass@gmail.com

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Twitter   jack25bc

Our new video link You Tube Videos

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When it was not fashionable to advocate uranium miners, GST recognized that nuclear power remains a viable contributor to inexpensive electrical energy vital to the needs of not only major industrial nations, but to developing countries throughout the world.  GST continues to see the powerful resurrection of the entire nuclear energy sector.

Resurrection Of Nuclear Power

In a current report, The International Energy Agency (IEA) stated that nuclear power remains the indispensable factor in the global energy grid.  Moreover, there needs to be a new mindset of how nuclear energy is perceived.

Read the full article by clicking here…

Image via Wikipedia

March 14, 2012

Cameco* (CCO : TSX : $24.13), 
Denison Mines* (DML : TSX : $1.66), 
Paladin Energy* (PDN : TSX : $2.03),
Uranium One* (UUU : TSX : $3.30), 
Finally some good news for the sector and for uranium investors– a real buyer with money

China Daily reported that China plans to import more uranium this year and is busy scouting
to buy uranium mines abroad especially in Canada as it gears up to resume its nuclear power projects in a big way after a yearlong
halt to review security measures following Fukoshima nuclear disaster.

China at present buys 95% of the uranium from Kazakhstan, Uzbekistan, Namibia and Australia. Canada has “agreed to cooperate” more uranium trade during Canadian Prime Minster Stephen Harper’s recent visit to China.

According to China Daily, the Asian giant’s deputy director of the
National Energy Administration, Qian Zhiming, stated, “China plans to import more uranium this year than last year and to buy
uranium mines abroad, looking particularly toward Canada for that purpose”

Demand Supply Gap Is the Reason

According to 2011 estimates, China produces
around 750 tons of uranium per year. The demand-supply gap of uranium is expected to exceed 10,000 tons by 2015 and reach
nearly 30,000 tonnes by 2030, according to Yan Qiang, a researcher with Chinese Academy of Geological Sciences.

M&A Activity Rising

A recent PricewaterhouseCoopers report stated that corporate takeovers in the metals industry are set to increase this year as
companies scramble to fight rising costs and ensure access to key materials from iron ore to rare earths. The value of mergers
and acquisitions in the sector is on course to rise 23% this year to about US$83 billion

 Bloomberg highlighted last week that both Minmetals Resources, China’s biggest metals trader, and Mitsui & Co., one of Japan’s largest metals firms, have stated that acquisitions will form a large part of their growth going forward.

Stock Market Magic : Building Your Apprentice Millionaire Portfolio is a “must have” book for any serious investor’s library.

The E-book Apprentice Millionaire Portfolio is available on amazon.com

For the print edition  AVAILABLE NOW   – 500 pages soft cover

 Stock Market Magic: Building Your Apprentice Millionaire Portfolio 2012 

Send  your check or money order for $ 28.75 payable to Jack A. Bass  to:

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Read the full article and watch the video by clicking here…

Luckily we were able to call the top in silver in April 2011 and gold in September 2011 as it reached overbought conditions, locking in partial profits.  On April 28, 2011 I wrote,“Remember that I am recommending partial profits if your winnings enable you to play with the house’s money and you are still holding silver from our August  2010 Buy Signal at $18. Other readers who have not been able to build a position can wait for the inevitable pullback as additional buying opportunities.”  A few days later in May we saw a volatile decline in silver of close to 40%.

Likewise in August of 2011, I became concerned of a correction in gold as it reached overbought territory.  On August 5, 2011 I wrote, “Although the technical picture for precious metals is improving, there will be periods of volatility as the global markets shake. A consolidation in gold would be normal and healthy.”  A few weeks later gold topped and corrected for the rest of 2011.

Read the full article by clicking here…

We are in the midst of a powerful rebound in our select uranium miners such as Uranerz (URZ).  The charts indicate an explosive 220% rebound since October lows.  For months we sent out reports that Uranerz will outperform as they are well funded and have already initiated construction on their Nichols Ranch In Situ Uranium Project, which should be producing uranium by the end of the year.  They also have agreements with Cameco and Exelon, two major nuclear players.  In fact Uranerz is leading the sector over the past three months regaining its 200 day moving average and rallying over 225% from October lows.

Read the full article by clicking here…

Tasman

Ucore

We reiterate our guiding principles at precisely these times that tests our basic mission statement.  First and foremost is the avoidance of margin.  Mining stocks are characteristically volatile and subject to turbulent corrections.

Being able to buy and hold in such maelstroms rewards the brave with eventually impressive profits.  The commodity arena has never promised us a rose garden.  In order to reap the rewards of speculation one must know the territory through which one is passing.   This year we have crossed a lonesome valley of mining investments.

The challenges are immense.  The rewards are even greater or else why do we endure the slings and arrows of outrageous fortunes if not  to enjoy substantial profits.

Read the full article by clicking here…

Taking a leaf from Roger’s modus operandi we come across two significant developments involving nuclear energy. Russia and The United States have reached an agreement of safe, compact, economically viable development of the nuclear (NLR) industry globally. Thus two former adversaries are joining in the peaceful growth and development of nuclear power. This serves to vindicate the watchful, waiting policy of Gold Stock Trades in refusing to be panicked by the scare stories of the media. Our ongoing faith in nuclear energy’s future continues to be upheld by history.

Read the full article and recent interview by clicking here…

The reality is that Washington is aborting job growth and simultaneously going deeper into debt. It is time for us to disenthrall ourselves from hoping that our leaders might seize the day by simply removing the bureaucratic road blocks preventing the development of our country’s mineral wealth. What we got instead was palliative pie in the sky, temporary stalling and political campaign moves for the 2012 election.

Read the full article by clicking here…

As is typical in a bidding war, competitor companies are also garnering some interest from the back-and-forth between Rio and Cameco as investors figure that the value of all uranium miners might rise. Uranium miners Denison Mines Corp. (AMEX: DNN), Uranerz Energy Corp. (AMEX: URZ), and Uranium Resources Inc. (NASDAQ: URRE) have all gotten a boost from the bidding, but perhaps not as much as might be expected.

Cameco originally offered C$3.75/share in cash for Hathor only to see Rio come in a few weeks later with an all-cash offer of C$4.15/share. Cameco raised its offer to C$.4.50 earlier this week, and now Rio has come back with an offer of C$4.59.

Denison, Uranerz, and Uranium Resources all saw share prices fall from the time of Cameco’s original offer on September 1st, bottoming out in early October. The shares got a bit of a boost when Rio’s offer was announced in mid-October, but shares of all three are still trading down from their levels of September 1st.

Uranium prices hit a peak of more than $70/pound in February, and have since fallen to around $55/pound. The disaster at Japan’s Fukushima Daiichi nuclear plant following the earthquake and tsunami in March and the subsequent decision by Germany to retire all its nuclear power plants has weighed on both nuclear plant builders and uranium miners.

Cameco, the world’s largest uranium miner, has experienced a near -50% drop in its share price since early March, largely as fallout from the immediate closure of 14 nuclear generation plants in Japan and Germany. Mining costs are also rising, putting even more pressure on profits.

The outlook for uranium demand is not very strong either. While it’s true that there are many new plants under construction, delays due to more regulatory reviews are being anticipated, even in China and India where construction has been growing.

The other impact of the current low price for uranium is that it stalls new mining projects. If demand picks up over the next several years, supply is likely to be weak due to cancellation of new projects.

That’s largely the reason that Hathor is worth the fight. The company is sitting on reserves that are estimated to be able to produce up to 5 million pounds of uranium annually. And regardless of a possible slowdown in production, uranium miners expect China’s nuclear building program to proceed as planned. Chinese demand is expected to grow, as is India’s, and Hathor’s uranium is already being produced and there’s plenty more to dig out.

There’s no doubt that Rio has deeper pockets than Cameco, and Rio’s latest offer totals about C$654 million. But Cameco has about $1.2 billion in cash and short-term investments in its war chest, so the battle may not be over quite yet.

Paul Ausick

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