Uranium (Uranium)

[Tommy]

$URG - UR-Energy: A World-Class Junior Uranium Producer Right Here In The USA With Huge Potential

http://seekingalpha.com/article/1797652-ur-energy-a-world-class-junior-uranium-producer-right-here-in-the-usa-with-huge-potential?source=email_rt_article_readmore

Editor's notes: Recent macro factors have masked the positive developments in UR-Energy's operations. Value Investor Dennis Beaudet sees those headwinds subsiding, resulting in a potential double.
Alpha-Rich ideas are our best money-making long and short investment ideas.
They are released exclusively to Seeking Alpha Pro users 24 hours before publication.
Learn more about Seeking Alpha Pro.

Disclosure: I am long URG. (More...)

Finding value is getting harder and harder as the equity indexes reach new highs. Most sectors are definitely overbought. However, there are those sectors in the beat up commodity based equity world that are certainly not near the overbought zone and have been really beaten up for some time now. One of these is the Uranium mining sector.

Some background on the sector

The following 3-year chart of the URA ETF (which is a relatively good representation of the global uranium mining sector) shows the ugliness of the uranium mining industry's share price performance over the last three years:

URA Chart

The downtrend in the sector began immediately after the Fukushima Daiichi nuclear plant meltdown in Japan in early 2011. The failure of this plant was as a result of a 55 foot Tsunami rather than a systemic failure of the plant itself. The massive waves knocked out the plant's redundant power supply thus disabling the plant's ability to shut down in a controlled manner. Well regardless of the cause of the failure, the result was a large area contamination which resulted in the displacement of ~150,000 people and a massive clean up and plant dismantling cost (which is still underway). This failure and its awful result caused the Japanese government to shut down all of its 52 reactors. Two of the reactors have since been restarted (but have since been shut down for maintenance) and the rest are undergoing rigid safety inspections and a number are also being upgraded. It is believed that at least half of the reactors will be put back into operation once safety concerns are satisfied and necessary upgrades are completed, but this process is taking much longer than originally thought.

Demand has been reduced as a result (for the short term)

Demand has been temporarily reduced as a result of the fall out of the Fukushima Daiichi incident. Japan represents about 10% of the world's nuclear reactor fuel demand, so with this many plants idled it reduces demand. The Japanese utilities, despite having their reactors idled, have honored their long-term supply contracts and have been taking and stockpiling more fuel. It is estimated that the country now has nearly five years' worth of reactor fuel in inventory. The fear in the market that is keeping the global utilities from stepping up their purchases is that the country may decide to not restart the rest of their reactors and dump this large supply of product on the market depressing prices even further and prolonging the downturn. This is highly unlikely however if the county wants to stay solvent as its utilities are currently importing LNG at absolutely horrendously high international regional prices and paying for it with a much devalued Yen because of the country's massive monetary currency printing program that is currently in place. Germany (an alternative energy leader) has also stated that they are going to be nuclear power free by 2020, which seems a little unrealistic at this point. Nonetheless, their intentions also add to the overall view of the sector.

However, supply is also being reduced

Mitigating this short to medium-term reduction in demand is reduced "surface" or "secondary" supply of U3O8 as a result of the ending of the HEU agreement with Russia (megatons to megawatts program) which as a result will be no longer supplying downgraded (from weapon grade to fuel grade) highly enriched uranium to the market to the tune of ~12% of the world supply.

Another factor that is beginning to hinder growth in supply is the current price of uranium fuel, with the spot price being at an eight-year low at ~$35.50 per pound and the long-term contract price ~$50.00. At these prices many mining development projects have been put on hold as for most mines the hurdle price required for an economic project is ~$70.00.

Demand will increase substantially in the medium term and the long-term future looks even brighter

The developing world sees Nuclear power as a must for electrical power generation and countries like China, Russia, India, South Korea and even some of the oil rich Arab countries have a very robust nuclear power plant development program underway. The United Arab Emirates (UAE) has plans for building nuclear reactors, which sends an important signal to the market. Even Saudi Arabia is building twenty!! As one of the most oil-rich countries in the world, it could probably power itself with oil, yet is looking to diversify into nuclear. I think that's a very strong signal of the importance of nuclear power generation to even a country that produces oil extremely inexpensively relative to the rest of the world.

The world nuclear association sees increases in capacity coming from four fronts:

Nuclear power capacity worldwide is increasing steadily, with nearly 70 reactors under construction in 13 countries.
Most reactors on order or planned are in the Asian region, though there are major plans for new units in the USA and Russia.
Significant further capacity is being created by plant upgrading.
Plant life extension programs are maintaining capacity, in USA particularly.

In total there are currently 435 operational nuclear plants in the world that provide nearly 14% of the world's electrical power. In addition to this there are currently almost 70 plants under construction as listed in the chart below and another 160 in development:

Commercial
Operation* REACTOR TYPE MWe (net)
2013 Iran, AEOI Bushehr 1* PWR 950
2013 India, NPCIL Kudankulam 1 PWR 950
2013 India, NPCIL Kudankulam 2 PWR 950
2013 China, CGNPC Hongyanhe 1* PWR 1080
2013 China, CGNPC Ningde 1* PWR 1080
2013 Korea, KHNP Shin Wolsong 2 PWR 1000
2013 Korea, KHNP Shin-Kori 3 PWR 1350
2013 Russia, Rosenergoatom Leningrad II-1 PWR 1070
2013 Argentina, CNEA Atucha 2 PHWR 692
2013 China, CGNPC Ningde 2 PWR 1080
2013 China, CGNPC Yangjiang 1 PWR 1080
2013 China, CGNPC Taishan 1 PWR 1700
2013 China, CNNC Fangjiashan 1 PWR 1080
2013 China, CNNC Fuqing 1 PWR 1080
2013 China, CGNPC Hongyanhe 2 PWR 1080

2014 Russia, Rosenergoatom Novovoronezh II-1 PWR 1070
2015 Russia, Rosenergoatom Rostov 3 PWR 1070
2014 Slovakia, SE Mochovce 3 PWR 440
2014 Slovakia, SE Mochovce 4 PWR 440
2014 Taiwan Power Lungmen 1 ABWR 1300
2014 China, CNNC Sanmen 1 PWR 1250
2014 China, CPI Haiyang 1 PWR 1250
2014 China, CGNPC Ningde 3 PWR 1080
2014 China, CGNPC Hongyanhe 3 PWR 1080
2014 China, CGNPC Yangjiang 2 PWR 1080
2014 China, CGNPC Taishan 2 PWR 1700
2014 China, CNNC Fangjiashan 2 PWR 1080
2014 China, CNNC Fuqing 2 PWR 1080
2014 Korea, KHNP Shin-Kori 4 PWR 1350
2014? Japan, Chugoku Shimane 3 ABWR 1375
2014 India, Bhavini Kalpakkam FBR 470
2014 Russia, Rosenergoatom Beloyarsk 4 FNR 750

2015 USA, TVA Watts Bar 2 PWR 1180
2015 Taiwan Power Lungmen 2 ABWR 1300
2015 China, CNNC Sanmen 2 PWR 1250
2015 China, CGNPC Hongyanhe 4 PWR 1080
2015 China, CGNPC Yangjiang 3 PWR 1080
2015 China, CGNPC Ningde 4 PWR 1080
2015 China, CGNPC Fangchenggang 1 PWR 1080
2015 China, CNNC Changjiang 1 PWR 650
2015 China, CNNC Changjiang 2 PWR 650
2015 China, CNNC Fuqing 3 PWR 1080
2015 India, NPCIL Kakrapar 3 PHWR 640
2015? Japan, EPDC/J Power Ohma 1 ABWR 1350

2016 Finland, TVO Olkilouto 3 PWR 1600
2016 France, EdF Flamanville 3 PWR 1600
2016 Russia, Rosenergoatom Novovoronezh II-2 PWR 1070
2016 Russia, Rosenergoatom Leningrad II-2 PWR 1200
2016 Russia, Rosenergoatom Vilyuchinsk PWR x 2 70
2016 India, NPCIL Kakrapar 4 PHWR 640
2016 India, NPCIL Rajasthan 7 PHWR 640
2016 Pakistan, PAEC Chashma 3 PWR 300
2016 China, China Huaneng Shidaowan HTR 200
2016 China, CPI Haiyang 2 PWR 1250
2016 China, CGNPC Yangjiang 4 PWR 1080
2016 China, CGNPC Hongyanhe 5 PWR 1080
2015 China, CNNC Hongshiding 1 PWR 1080
2015 China, CGNPC Fangchenggang 2 PWR 1080
2016 China, several others PWR

2017 USA, Southern Vogtle 3 PWR 1200
2017 Russia, Rosenergoatom Baltic 1 PWR 1200
2017 Russia, Rosenergoatom Rostov 4 PWR 1200
2017 Russia, Rosenergoatom Leningrad II-3 PWR 1200
2017 Ukraine, Energoatom Khmelnitsky 3 PWR 1000
2017 Korea, KHNP Shin-Ulchin 1 PWR 1350
2017 India, NPCIL Rajasthan 8 PHWR 640
2017 Romania, SNN Cernavoda 3 PHWR 655
2017? Japan, JAPC Tsuruga 3 APWR 1538
2017 Pakistan, PAEC Chashma 4 PWR 300
2017 USA, SCEG Summer 2 PWR 1200
2017 China, several

2018 Korea, KHNP Shin-Ulchin 2 PWR 1350

So though the current situation is terrible with respect to the commodity price being at an eight-year low, resulting in the equity of miners being pummeled, there is light on the horizon for the future from a macro perspective however time and patience is required.

There is a junior producer that is already bucking the sector trend

This company is UR-Energy (URG) a Colorado based junior uranium mining company that has done nothing short of a fantastic job on all fronts to become the first new producer of uranium fuel in the heart of the USA in more than 25 years. This is significant from a strategic perspective in that the US is a severe net importer of U3O8 producing supplying only ~10% of its nuclear fuel needs from mines on US soil. I am sure that the US government appreciates any new US domiciled producer from a strategic perspective as it contributes to increasing domestic supply of this important power generation fuel (which despite its shortcomings is one of the greenest ways to generate ample supplies of electrical fuel).

Some specific background and detail on the company

UR-Energy is a junior mining company focusing on exploration and development of uranium properties in the United States and in Canada. UR-Energy was incorporated in 2004 and trades on the Toronto Stock Exchange under the symbol (URE.TO) and on the NYSE under the symbol URG.

In the United States, the Company's current Wyoming properties contain NI 43-101 compliant resources of 20.55 million pounds of uranium in the measured and indicated category plus 4.67 million pounds in the inferred category. In Nebraska, the Company has leased approximately 35,000 acres (not contiguous) for initial exploration. The Company's land position, based upon an extensive in-house geologic study, was secured in areas which may contain geology similar in nature to Cameco Corporation's (CCJ) nearby Crow Butte deposit which is currently being mined by the in-situ recovery method. (click to enlarge)

In Canada, the Company's Screech Lake project is in the Thelon Basin. The Company acquired this project based upon the presence of key geological vectors and encouraging supporting data from 1970s-era exploration work. The property is located in the eastern part of the Northwest Territories. While the Athabasca Basin in Saskatchewan is better known and contains 65% of the known future capacity of global uranium production, the Thelon Basin is highly prospective for unconformity-type uranium deposits, the highest grade known uranium deposits.

The company's shares have been outperforming its peers

If we compare the company share price performance to the URA (an ETF of the global uranium mining industry) and with Cameco (the most investable uranium producer on earth) as we can see from the chart below, URE is up 18% in the last twelve months versus the URA ETF which is down 31% and Cameco which is flat (even with a nice spike yesterday because of a fantastic Q3). The major reason for this out performance is that the company's share price has been undergoing a re-rating as a result of transitioning from an explorer/developer to a producer in fine style and a number of significant catalysts have occurred in this regard.

URG Chart

The company has worked through a lot of adversity over the last 6 years. Going through the property development stages of having to apply for and receive numerous permits to obtain all of the approvals necessary to begin construction of its mining and processing facilities at its flagship Lost Creek property in Wyoming. Upon achieving the final BLM permit last October the company immediately commenced construction of their mining and processing facilities and they completed both facilities on time and on budget in July of this year and after a final inspection by the NRC they were given the go ahead to commence production which began this past August. The company is in the process of ramping up production and communicated recently that they are ahead of schedule and exceeding their and the market's expectation.

As a result of the unexpectedly quick mining and processing ramp up, the company has increased its first year (2014) production guidance to 1,000,000 pounds from their original estimate of 800,000 pounds. At this production level, UR-Energy will be producing 20% of the USA domiciled uranium production output.

A global low cost producer

The company is in the lowest cost producer quartile in the world with a direct operating cost of just over $16 per pound. Even their "all in" operating cost including ongoing development and full project capital cost recovery is just $32 per pound. Remember that most producers require a $70 price to be economic. The world leading production cost is mostly attributed to their In-Situ Recovery mining methodology, which is also a much more environmentally friendly mining methodology because it does not disturb the mining area as the name suggests. As a result of this operating cost advantage, UR-Energy will be generating significant cash flow next year even in this historically low uranium fuel price environment.

Significantly de-risked through long-term sales agreements

The company has secured approximately 50-60% of its production out to 2019 based on long-term pricing which is significantly higher than the spot price. As a result, it is estimated that the company's average selling price is currently ~$55 per pound. Also, most of these long-term agreements were negotiated a year or more ago when the long-term price was higher than it is currently.

Significant operating profit will be generated in 2014 as a result of high realizations and ultra-low operating cost

When one takes into consideration the double whammy of a high percentage of long-term pricing and an ultra low direct operating cost the company is set to deliver an operating profit before tax of ~$35 million or $0.30 per share at a 1,000,000 pound mining and processing output. Also the company is off to a shooting start since commencing production ramp up in August and is anticipated to produce at least 150,000 pounds during the ramp up period in the latter part of this year. This initial production will also contribute ~$5 million of operating profit on the final quarter of the year (if the company is able to achieve its cost estimates) which will further help the company to financially de-risk going into its first full year of production next year.

Significant de-risking of the balance sheet has just occurred

The company has impressed it current shareholders over the last year during mine and processing facility construction with it use of debt to finance construction and operating expense as opposed to taking the easy path of issuing shares and further diluting existing shareholders' equity holding. Finding debt for most mining juniors is a mammoth task but this company does not have typical management. The company is extremely well managed and directed and it partnered with the RMB Australia Holdings Limited for two loans to provide the required working capital to fund the completion of the mining facilities and pay operating expense. These higher cost loans were taken out to bridge the reception of a long awaited $34 million Wyoming State bond, which has very favorable terms. The great news the company just announced on October 24th is that this state loan finally made through all of the layers of bureaucracy and has been granted to the company. So now the higher cost loans have been paid off but the company is keeping one active to draw up to $10 million as necessary to further develop its other Wyoming properties to further increase its production output. One upcoming cost is the closing of its purchase of the Pathfinder property, which is currently owned by Areva (AREVA.PA) the French nuclear giant. The property is within the core of the company's Wyoming mining developing zone and will substantially increase the company's uranium resource. The purchase is expected to close in the current quarter.

The current cash balance is estimated to be in the ~$9.3 million range. The cash balance at the end of September was $6.3 million and the balance of their loans was $31 million at the end of the quarter as well. The securing of the new state bond facility of $34 million was immediately used to pay off both loans leaves leaving a $3 million cash balance to add to its end of quarter balance. There was also some origination fees on the loans that were returned to the company by the lender (due to the early repayment) as well as the canceling of some warrants.

The Investment thesis has two aspects:

The primary driver for this stock to resume it breakout and rise to the $2 level is the completion of the re-rating process of the company's shares as it fully completes its transition from a developer to a full fledged producer. Though the company is now producing, the market will be looking to see if the three levels of operating cost estimates (page 15 of company presentation) telegraphed by the company are achieved as well as the meeting of its quarterly production volume guidance for 2014. This is the company specific driver to double the share price. This company was a net cash burner for the last 9 years and has now transitioned to a cash generator. UR-Energy shares have been outperforming the industry over the last year as its superb management and direction have accomplished much:

Constructed a world class mine and processing facility in super geo-politically friendly Wyoming on time and on budget
Utilized debt for the bulk of the construction as opposed to continued dilution of equity (which is very shareholder friendly for a pre-production junior miner)
Utilized an ISR mining methodology with world leading low operating cost and an estimated 87% IRR for the Lost Creek project
Ramped up production quicker than expected and poised to produce 1 million pounds of fuel next year and generating ~$35 million ($0.30 per share) of direct operating profit (their current net debt is ~24 million pre closing of the Pathfinder assets) as well as an estimated $5 million from their production this fall if the cost estimates are met.
Used solid forward thinking to secure long-term sales agreements for ~50-60% of their production on a go forward basis in this uncertain market thus significantly de-risking the company
Stayed true to their word in achieving a very strategically beneficial loan facility from the State of Wyoming

The second aspect in this thesis is macro view with respect to the turnaround in the sector. This other necessary ingredient to fuel the rise in equity value is at least a moderate improvement in the macro environment where the uranium spot price gets back to around the $50 per pound level. Without some level of macro improvement, investors will be hesitant to buy into the sector. The sector sentiment must improve to add support to each of the company specific catalysts as they occur over the next year to eighteen months. This is seen by many market watchers as inevitable at some point in the late to early to mid term as the utilities begin to go to market to purchase more long-term supplies; this as a result of the Japanese reactors coming on stream and removing the psychological Japanese fuel inventory overhang as their utilities begin to consume this inventory. As the spot and long-term prices begin to move up, undoubtedly the equity values of the various explorers, developers and producers will begin to move up very rapidly. This as a result of their share prices being so depressed that any tangible sign of a trend change in the commodity will have a very positive impact. And as well we know as investors the leaders will get the investment dollars first so leading companies like Cameco and UR-Energy will lead the way up in a recovery.

The average price target for the company is $1.70 from the analysts that cover it and they also have an average rating on the stock of Strong Buy. If the company achieves their production and operating profit projections next year, the stock will be very undervalued trading at just 3.7 times 2014 direct operating profit. Also from a NAV view point, the company is trading at just 0.5 times its NAV so if it was trading at its NAV, the share price would be $2.20 versus its current $1.10 (at the time of writing) which is a double.

Investing in UR-Energy will require patience as it will likely take a while for the sentiment to improve and the coincidental increase in the uranium spot price. The stock had already broken out to the upside this past summer but began facing resistance earlier in the uptrend than it should have as macro level news concerning Japan's slower than expected plant restart process released over the last several months caused the commodity spot price to fall from the $40 to the $35 level resulting in the entire sector coming under selling pressure and UR-Energy's share price re-rating getting partially postponed.

The risks to this thesis (which are very important to consider when making an investment choice):

Macro

Commodity Price - though the uranium spot price is currently at an eight year low, it is conceivable that if the Japanese make the very unlikely choice of not restarting its plants and dump their large fuel inventory, the commodity price will stay at these levels for a much longer time frame. Though this will not hurt UR-Energy that much due to its hedging of a large portion of production pre-sold at long-term prices which are much higher than spot, the sentiment would take another blow and investors would hold off buying into these companies for a longer period of time (until more of the ~70 reactors under construction come on line).
Headline - Though it was hardly the fault of the Fukushima Daiichi plant itself that it failed (but rather an incredible 55-foot wall of water that inundated it), the plant melted down and consequences have been socially and financially huge. I do not believe the meltdown took any lives, but the inconvenience and financial cost to the Japanese people (who are already jammed on a pretty small island relative to their near 100 million person population) has been very considerable. A further incident such as this would put a spike in the sector's heart with no relief for some time to come

Company Specific

Production - The company does not achieve its production volumes thereby reducing its operating profit thus reducing the company's equity valuation
Operating Cost - The company does not achieve its direct operating cost estimates ($16 per pound for direct and $23 per pound including development)
Reserve Life - The company indicates an 8 plus year mine life at Lost Creek. There is a risk that the reserves were over estimated and the RLI is lower than previously thought
Liquidity - If operating profits are significantly impacted by volume or margins being significantly below expectations the company could develop a working capital issue

In my experience with this company, Wayne Heili and his management team have proven that they are world class over and over again and certainly have earned my trust and respect. They have developed the company into a very solid junior producer even within a multi decade sector depressed environment to the point that even in this environment the company is undervalued and a very steady investment. One other important factor concerning the company is that a very significant percentage of shares are in solid hands. BlackRock has a very large minority ownership stake in the company, which is a positive as a very significant volume of shares being in very steady hands.

Some Catalysts

Q4 report - this final quarterly report for 2013 will have the company's first production revenue reported along with the various levels of operating cost and margins as well as a fresh guidance for these and production levels for 2014. If they are on track with current estimates then this will put strong wind under the share price.

Commodity price - if the sentiment improves quicker than anticipated due to a number of factors (including reduced supply as a result of a major higher cost producer shutting in significant production or if the Japanese announce a fast track of reactor re-starts), the spot price will jump as well as the share prices of the miners (particularly those seen as leaders)

Reserves - the company is expected to report on drilling results prior to year end. A surprise to the upside with respect to resource and or reserves would be positive support for the share price

Buyout - UR-Energy has a brand new world class mine and processing facility with a 2 million pound initial capacity, which is in production within the heart of the USA (which is a severe net importer of the fuel that powers a large percentage of the nation's electricity generation). The company also has future development properties surrounding its Lost Creek producing mine. Along with the million pounds of production next year comes free cash flow and profitability. This is indeed a takeout target and the time for a major to acquire the company is now at the perceived low point in the cycle.

Conclusion

I see little downside to this story as a result of the high percentage of long-term pre-priced agreements and the ISR mining methodology with its ultra low direct operating cost, but if all heck broke loose the share price could get back to the 90-cent level a ~20% down side from the price at the time of writing. On the upside, if the company meets it production and margin estimates and the macro picture improves even moderately, I can easily see this stock price well over $2 per share in less than a year from now providing a doubling of one's investment.

The uranium sector may not be for everyone but neither was the solar sector after the European government subsidies started disappearing and the Chinese producers kept dumping production into the market and the producer share prices were decimated (and I mean decimated). But in retrospect, that was the time to buy... when sentiment was awful. Well sentiment toward the uranium sector is just as awful so this may (and I stress may) be the time to wade into the sector to take an initial position in a thriving, leadership company like UR-Energy ahead of the herd.

[Tommy]

Thorium Backed As a ‘Future Fuel’

http://investorintel.com/nuclear-energy-press/thorium-backed-future-fuel/

October 31, 2013 (Source: BBC) – Nuclear scientists are being urged by the former UN weapons inspector Hans Blix to develop thorium as a new fuel.

Mr Blix says that the radioactive element may prove much safer in reactors than uranium.

It is also more difficult to use thorium for the production of nuclear weapons.

His comments will add to growing levels of interest in thorium, but critics warn that developing new reactors could waste public funds.

Mr Blix, the former Swedish foreign minister, told BBC News: “I’m a lawyer not a scientist but in my opinion we should be trying our best to develop the use of thorium. I realise there are many obstacles to be overcome but the benefits would be great.

“I am told that thorium will be safer in reactors – and it is almost impossible to make a bomb out of thorium. These are very major factors as the world looks for future energy supplies.”

His enthusiasm is shared by some in the British nuclear establishment. Scientists at the UK’s National Nuclear Laboratory (NNL) have been encouraged by the government to help research on an Indian thorium-based reactor, and on a test programme in Norway.
Hans Blix

Hans Blix says the world should try its best to develop thorium

The Norway tests at the OECD’s nuclear trials facility in Halden are conducted in a Bond-style underground bunker.

A couple of charming Nordic homes perch on top of a hill at the edge of the town. Below them a garage door in a cliff face leads into a tunnel deep into the hill where the reactor hall lies.

In theory, at least, the mountain protects the town from an accident.

The thorium tests are being carried out by a private firm, Thor Energy (the element itself was discovered in Norway in 1828 and named after the Norse god of thunder).

Pressurised Water Reactor

The company hopes to get thorium licensed alongside uranium in current water-cooled reactor plants.

The British government says it would be useful to increase the fuel options for nuclear operators, as thorium is believed to be three times more plentiful than uranium. It is also currently being produced as a by-product from mining rare earths.

Staff from NNL have been advising Thor on the use of mixed oxide fuels (MOX). NNL has also been helping the Indian authorities develop a thorium reactor, as India sits on top of the world’s biggest thorium reserves.

The Thor project represents an evolutionary approach, using thorium in existing reactors together with uranium or plutonium.

Oystein Asphjell, chief executive of Thor Energy told BBC News: “There is lots of thorium in the world, very well distributed all over the globe. In operations, in a reactor, it has some chemical and physical properties that make it really superior to uranium as well. On the waste side, we don’t generate long lived waste.”

China is going for a revolutionary approach, devising a next-generation reactor which its supporters say will enable thorium to be used much more safely than uranium.

Inside a mine rich in thorium

When a uranium reactor overheats and the fuel rods can’t contain the chain reaction, as happened at Fukushima, the crisis continues. If something happened to a thorium reactor, technicians could simply switch off the stimulus which comes from uranium or plutonium in a small feeder plant and the thorium reaction would halt itself.

Prof Carlo Rubbia from Cern previously told BBC News: “Thorium will be able to shut itself off without any human intervention… You just switch off the beam.”

“There are also no long-lived waste products… We estimate that after something like 400-500 years all the radioactivity will be dissipated away.”

These advantages, if they were realised, would be huge. But thorium still has many technical problems to overcome. What is more, countless billions have been ploughed into uranium-based research and development, and in the words of Mr Blix, uranium has a very deep furrow, backed by vested interests.

Canada, China, Germany, India, the Netherlands, the UK and the US have experimented with thorium as a substitute fuel in the past.

Questions are being raised, though, about the advisability of pinning the world’s energy ambitions on another nuclear dream. Environmentalists often allege that if renewable power had commanded a fraction as much research funding as nuclear it would already be much cheaper and more common.

Dr Nils Bohmer, a nuclear physicist working for a Norwegian environmental NGO, Bellona, said developing thorium was a costly distraction from the need to cut emissions immediately to stave off the prospect of dangerous climate change.

“The advantages of thorium are purely theoretical,” he told BBC News.

“The technology development is decades in the future. Instead I think we should focus on developing renewable technology – for example offshore wind technology – which I think has a huge potential to develop.”

If thorium ever makes it as a commercial nuclear fuel, uranium may be seen as a massive and costly diversion. Some supporters of thorium believe that it was bypassed in the past because governments wanted the plutonium from certain conventional reactors to make atomic bombs.

They believe thorium was rejected because it was simply too safe.
- See more at: http://investorintel.com/nuclear-energy-press/thorium-backed-future-fuel/#sthash.22o0dyNf.dpuf

[Tommy]

$CCJ - $URG - $DNN - Uranium Investors, Ignore the Noise! Fundamentals Are Compelling

http://www.theenergyreport.com/pub/na/15687?utm_source=delivra&utm_medium=email&utm_campaign=FINAL+TMR+10-29-13

David Sadowski Uranium prices and mining stocks are low, but market forces will push them both higher in the next 12–24 months, says David Sadowski. Miners are jockeying for position and the Raymond James mining analyst tells The Mining Report to expect mergers and acquisitions as they prepare for the good times to come. The market's supply glut will be gone by mid-decade, and mining will have to ramp up to head off a deficit by 2020. The time to buy is now.

Companies Mentioned: AREVA SA : Cameco Corp. : Denison Mines Corp. : Kivalliq Energy Corp. : Rio Tinto Plc : Rockgate Capital Corp. : UEX Corp. : Ur-Energy Inc.
Related Companies

: Uranerz Energy Corp.

The Mining Report: David, welcome. What is happening with uranium demand? And where are the trends most pronounced?

David Sadowski: Over the next decade, we expect uranium demand to grow at about 3% per year (3%/year) with about two-thirds of that incremental buying coming from China, Russia and India. China is building reactors like they're going out of style—30 units are currently under construction domestically, with 59 in the planning stage — and we've just seen China grow its presence internationally with an equity stake in the Hinkley Point power station in the U.K. Russia is building 10 reactors at the moment. It's got 28 on the drawing board, according to the World Nuclear Association, and that's going to more than offset the retirement of some of its aging reactors. Russia is heavily involved in vending reactors globally as well, with projects around the world. One interesting aspect of that is the build-own-operate model, where Russia will build and operate a plant in your country and then sell you electricity from that plant. In India, despite some headwinds with the nuclear liability law, another new reactor just connected to the grid, an additional six units are currently under construction and five dozen are on the drawing board. You've got new entrants like the United Arab Emirates, Turkey and Vietnam showing that they're very serious about nuclear as a power source.

On the other hand, although the U.S., the world's largest nuclear power producer, is building three large reactors and two more are due to start construction imminently, utilities have decided to close five small, old reactors due to challenging economics, with a handful more at risk of closure. In France you've got some talk about reducing its very heavy reliance on nuclear, while a similar debate has kicked off in South Korea. And Germany, as we all know, is looking to phase out its nuclear power plants by 2022. It's sort of a polarized mix internationally when it comes to nuclear power and uranium demand.

The underlying theme is that Western nations may have slowed their momentum somewhat on nuclear, and there's a variety of reasons for that, including upfront capital costs, which tend to be quite high; the low cost of competing sources of electricity, like natural gas; and in some cases low electricity demand and power rates regionally. Despite that, Eastern nations remain focused on nuclear reactors as a linchpin in their energy mix for its stable, low-cost, zero-emission ability to provide secure base load power.

TMR: With the market sending conflicting signals, how should investors proceed?

DS: For investors, the key thing to focus on is that irrespective of public outcry in some regions and pullback on nuclear power growth plans in others, there is still significant growth of nuclear power globally. Japan is going to be restarting its reactors. We think about 30 gigawatts or so will eventually get turned back on, with those first units firing up again mid-2014. Further clarity on the timing and number of those restarts as well as potential read-through on Japanese inventories is a key catalyst for the uranium market. The investor looking at some of these conflicting signals has to stay focused on the underlying trend and ignore the noise. We think the underlying trend is heading in a positive direction, especially in the medium- to long-term.

TMR: Ontario decided to refurbish existing nuclear plants instead of building new ones. What does this mean for the future of nuclear power in Canada?

DS: Canada has long been a major force in the global nuclear power industry. Nuclear power was first developed in the 1940s. In the 1950s and 60s, Canada developed the CANDU reactor design, a unique heavy water plant that is flexible with respect to maintenance and the fuel that can be used, supplies much of the world's medical isotopes and has been exported to several other countries. For domestic power generation, Canada is pretty reliant on nuclear power. There are 19 reactors operating today, meeting about 15% of the country's electricity requirements. We don't think the decision not to pursue new reactors at Darlington is going to change nuclear's role—the decision to refurbish the existing units is a cost-effective commitment, in-line with demand growth, to maintain nuclear as an important source of power in the country for decades to come.

TMR: Yellowcake is trading now at an eight-year low, around $35 per pound ($35/lb), but it appears to have stabilized there after sliding for three years. What is your advice for investors now and why?

DS: We believe the uranium price is more likely than not to be range-bound for the next 12 months or so given a glut of uranium supply and a significant dip of real demand in the marketplace (as opposed to discretionary demand) from utilities. In the medium to longer term, we continue to see extremely compelling supply/demand fundamentals. Accordingly, we're still inclined toward companies that can weather some spot price weakness, but are leveraged to an inevitable rise in sentiment and equity valuations in the space.

TMR: In our last interview though, you had projected a three-year supply shortfall of uranium starting in 2014. What's the current outlook?

DS: A lot has changed since we last talked. There's been a bit of a pushback in terms of when we expect Japan to start up its reactors. That has had implications for uranium demand globally. Japan created a new regulator called the Nuclear Regulation Authority. It established a rigorous new safety framework that all reactors will have to operate under and the pre-restart inspection process was started from scratch all over again. The reactors have to be upgraded to meet the new guidelines, it's going to take at least six months to inspect each power plant, and there's a finite number of inspectors.

In China as well there's been a throttle back on its growth plans following an 18-month safety review after Fukushima. That safety review was completed in late 2012. For the time being, only third-generation power plants on the coast will be permitted to commence construction going forward. That's had a bit of a negative impact. Those are just two examples.

On the supply side, mine production has been very strong since we last spoke. We've seen big rebounds in Australian and African supply. Kazakhstan has continued to grow despite obvious price headwinds. There's been some inventory selling by a company called Japan Atomic Power Co. Perhaps more significantly, requests for deferral of supply contracts by some Japanese utilities have led to the return of some uranium back to the original selling producers, who then turn around and sell that material into the marketplace. That's had a negative impact on the supply/demand fundamentals.

Even though the Russian HEU agreement ends this year, which should reduce U.S. utility reliance on this stable source of supply, we think secondary supplies will continue to be significant. The U.S. Department of Energy stated it's going to start releasing more of its material into the marketplace. We also now expect higher levels of material as a result of underfeeding at enrichment plants in both Russia and Western nations. On balance, this has all resulted in our global supply/demand shortfall getting pushed back several years.

We now see meaningful oversupply through 2016, a relatively balanced market from 2017 through 2019, but then in 2020 we see a deficit emerge that escalates very quickly to crisis levels. There is enough material to go around for now, but demand continues to grow. Existing mines are depleting and the uranium price is far too low to incentivize the mines that the market will badly need by the end of this decade. We believe uranium prices have to be a lot higher by 2015 or 2016 to provide enough lead time to bring on new supply in advance of this very large shortfall looming. It's hard to time these things exactly with respect to the uranium price, but we do see further supply disruption or even a resumption of long-term utility contracting as being that spark that moves uranium prices to where they have to get to.

TMR: Given all these conflicting trends, how are mining companies responding?

DS: The mining companies have suffered. Spot uranium prices are at eight-year lows and are not reflecting the longer-term fundamentals. For companies that have meaningful exposure to current market prices, that is to say those that don't benefit from long-term fixed-price contracts, their realized prices are on a downward trend. That is definitely factoring into equity valuations as well. We've got producers averaging well below historic levels. We typically see producers averaging well over 1.5-times price-to-net asset value, for example, and right now they're trading at fractions of that. The juniors are even more battered with reduced prospects of securing equity financing and greater challenges in quickly getting their projects into positive cash flow. But the uranium price must inevitably go higher and we see a lot of opportunity on the equity side because of that. We think there's going to be a continued trend toward mergers and acquisitions with logical consolidation in key jurisdictions such as the Western United States. Also, many larger entities are well capitalized, while potential acquisition targets are trading at bargain valuations.

As far as how uranium companies have coped, over the last 12–24 months we've seen Cameco shelve its Double U project, BHP Billiton Ltd. (BHP:NYSE; BHPLF:OTCPK) shelved its Olympic Dam expansion plans. Trekkopje, Imouraren, Bakouma, Stage 4 at Langer Heinrich, Ranger Heap Leach—these are just some of the projects that have been pushed back or canceled, now removed from the project pipeline. Existing production has been cut back as well. Energy Fuels Inc. (EFR:TSX; EFRFF:OTCQX) has halted mining at three small mines in Colorado and Uranium One is throttling back on well field development at its Willow Creek mine in Wyoming, which should result in declining output rates there. Further supply cutbacks like those could be one of the catalysts that spark the uranium price over the next 12–24 months. We highlight Uranium One's Honeymoon mine in Australia, Paladin's Kayelekera in Malawi, Rio Tinto's Rössing in Namibia and further growth in Kazakhstan as potentially being the next victims of this low price environment.

TMR: You recently attended this year's World Nuclear Association Symposium. What were the takeaways?

DS: The symposium is the largest demand-side event in the industry. Normally we see an uptick in market activity following the conference as market participants from around the globe sit down in London and hammer out supply deals. That didn't really happen this year. I think what became apparent at the WNA was the demand side of the industry feels satisfied with the amount of uranium available to meet its uncovered needs over the next couple of years. That in part has led to a complete collapse of the long-term contracting market. We're just not seeing any long-term contracting right now. Year-to-date there's only been about 14 million pounds (14 Mlb) of yellowcake that has changed hands in the long-term market. That compares to about 140 Mlb/year average over the last decade. There's some thinking that at some point utilities have to resume contracting. That's really going to be what gets the uranium price moving upward in our view—that concern among utilities that they're not covered on the supply side, coupled with an increasingly apparent future supply shortfall, leading to more buying. As I've mentioned, Japanese reactor restarts and further supply cutbacks could be critical in the timing of this.

TMR: You have 10 uranium companies under coverage. What are your choice picks and why?

DS: Two of our top picks are Cameco Corp. (CCO:TSX; CCJ:NYSE) and Ur-Energy Inc. (URE:TSX; URG:NYSE.MKT). For Cameco, we've got a $25/share target and an outperform rating. This company is the industry's go-to, the blue chip uranium company. It's organically growing very low-cost operations, which are for the most part in very safe jurisdictions. It has a lower-risk approach to contracts, with a targeted pricing mix of about 40% fixed-pricing and 60% market-related pricing in the contract book. The company's got a solid balance sheet. We think it's going to end Q3/13 with about $800M in working capital and another $2 billion ($2B) in undrawn lines of credit. It's also diversified across the nuclear fuel chain, with exposure not only to its core uranium mining business but also with nuclear fuel services, like conversion and fuel fabrication. It's got a stake in the Bruce nuclear power plant as well as a newly bolted-on uranium trading business, so it's quite diversified. On top of that, Cameco pays a 2% dividend. We think it offers a very attractive risk/reward proposition at these levels.

On Ur-Energy, our other top pick, we've got a strong buy rating and $1.80 target. Ur-Energy is the world's newest uranium producer, having just started operations at its flagship, wholly owned Lost Creek in-situ leach mine in Wyoming, a very favorable geopolitical jurisdiction for mining. Lost Creek has lowest-quartile cash costs. We're modeling it at about $22/lb life-of-mine average production cost there. Ur-Energy just put out a strong production update in September. We think that the ramp-up curve on production is highly derisked now. The company also boasts an operationally experienced management team that has done a great job hedging themselves. About 33–50% of design production rates are going to be delivered into fixed-price contracts through 2019. Those contracts are priced well above current market levels, providing significant near-term cash flow. Having just secured its long-sought-after low interest bond loan from the state of Wyoming, $34 million at 5.75% interest, we model Lost Creek as fully funded, and the company's balance sheet as carrying much lower risk. Furthermore, trading at only 0.6 times price-to-NAV, a 40% discount to the group average, we think the current share price offers a very attractive entry point at the moment.

TMR: Speaking of Cameco, in September you bumped your target for Cameco up $1 to $25, but the stock fell 14%. What was the thinking behind that?

DS: That change was more of a housekeeping revision. With that research note, as we always do around that time of the year, we rolled forward the discount periods on our discounted cash flow models from 2013 to 2014. We also rolled forward the valuation period on our price to cash flow to 2015. Both of those changes, in this case, had a slightly positive impact on our valuation and that's what resulted in the upward tick to a $25 six- to twelve-month target price.

TMR: How will the opening of Canadian uranium mine investment to European companies affect your uranium companies?

DS: It's certainly good news. Elimination of the non-resident ownership policy (NROP) will permit European Union-based companies to own a majority stake in an operating uranium mine. That opens the door for companies like Rio Tinto Plc (RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK) and AREVA SA (AREVA:EPA) to push forward with development of existing deposits or to buy more uranium assets in Canada. Accordingly, it increases takeover potential for companies like Denison Mines Corp. (DML:TSX; DNN:NYSE.MKT), UEX Corp. (UEX:TSX) and Kivalliq Energy Corp. (KIV:TSX.V).

Despite Cameco's apparent support for the rule change, we think it may face increased competition in Canada for personnel, equipment and permitting priority if companies like Rio Tinto and AREVA are allowed to build up production.

TMR: Denison Mines Corp.'s stock is at a four-year low, with its takeover target, Rockgate Capital Corp. (RGT:TSX), having fought Denison's bid. Your return on Denison has also been poor. Why are you recommending Denison as an outperform?

DS: The board of Rockgate has actually changed its tune and is now recommending shareholders accept the offer from Denison, which we think is a great deal for shareholders on both sides. Denison gets a significant chunk of cash out of Rockgate as well as the Falea project in Mali as a throw in for less than $0.20/lb, while Rockgate shareholders will now get shares of Denison, a company with superior size, liquidity, assets and strategy in exchange for their Rockgate shares. Falea is likely to get spun-out with Denison's other African assets if the deal closes successfully.

On our recommendation, we view Denison as one of the premier uranium explorations globally with a dominant landholding in the eastern Athabasca Basin. The company has a 60% interest in Wheeler River, the world's third-highest-grade uranium deposit that continues to grow. It's got a 22.5% stake in the McClean Lake mill, the most advanced uranium processing facility globally, which is undergoing a doubling of plant capacity at nil cost to Denison and should yield some nice toll milling revenues starting next year. It's got a 60% stake in Waterbury Lake, the western extension of Rio Tinto's Roughrider, and then a highly prospective suite of exploration projects elsewhere in the Athabasca as well as in Mongolia and in Zambia.

In addition to outstanding exploration upside at those projects, we recommend Denison on high takeout potential. We believe these growing high-quality assets in low-risk jurisdictions would be a natural fit for many strategic entities, such as Rio Tinto, particularly after the recent revision to the NROP policy, as we discussed, as well as Cameco or even Asian nuclear utilities. Denison is well run. It's got a solid cash position even without the Rockgate acquisition. Like our other top picks, Denison can weather uranium price weakness in the near term, but it's poised for that inevitable rebound in uranium prices and industry sentiment. That's really what drives our valuation on the company.

TMR: Thank you, David. You've given us a lot of insight.

DS: You're welcome.

[Tommy]

$URA - Why Did The Uranium Mining ETF Advance On Its Highest Volume In 3 Years?

http://seekingalpha.com/article/1777592-why-did-the-uranium-mining-etf-advance-on-its-highest-volume-in-3-years?source=email_rt_article_readmore

Earlier this summer, I wrote an article highlighting the undervalued uranium miners (URA) and why it could breakout in the second half of this year. Even the big banks such as JPMorgan are predicting uranium prices could move to $90 in 2016.

This means that from a conservative estimate investors may see a double according to the JP Morgan forecast over the next two years, but some uranium bulls such as myself believe there is the potential for a ten bagger or a price spike that mirrors the 2007 bubble on the near term horizon.

(click to enlarge)Remember 2007 when Cigar Lake was delayed from flooding the uranium price ran to $135 a pound. That is around $100 higher from today's price.

However, uranium could eventually break above that high again especially if we see some catalysts that could make the price jump. It is no coincidence that the smart growth minds such as Bill Gates and the value investors such as Warren Buffett believe in the long-term viability of nuclear.

(click to enlarge)

The high volume breakout in the uranium may have occurred this past Friday when the uranium mining ETF soared over 6% on more than five times average volume. The uranium mining ETF's largest holders are Cameco (CCJ), Denison (DNN) and Paladin (OTC:PALAF).

Uranium (OTC:URPTF) soared seven years ago and it could soar again as demand begins exceeding mine supply. I believe long term investors in high quality junior uranium miners could see potential gains of over 1000% if they are patient. We are already in a shortfall which should only increase with time as more reactors are being built now than ever before.

(click to enlarge)

The real reason for the jump last week was the decision of the Greenland government to overturn a 25 year old ban on uranium and rare earth mining. One of the positions in the uranium miners ETF which benefited from this move is Greenland Minerals (OTC:GDLNF) which soared over 60%.

This reminds me of the move by the Australian Government to overturn the uranium mining ban in Queensland back in 2012. Countries are realizing that there is great demand for uranium as more nuclear reactors are being built now than before the Fukushima Accident. Uranium and rare earth mining (REMX) could be two areas where Austrailia and Greenland could create a lot of wealth over the coming decade when uranium demand will exceed supply. Outside of Germany, governments around the world support uranium mining and nuclear power.

Despite the low spot price, M&A activity in the sector is increasing. Notice the acquisitions of Hathor, Fission, Strathmore, Uranium One and Alpha Minerals from larger players such as Rosatom, Denison, Cameco and Rio Tinto. Expect a lot more over the next few years as this consolidation trend should continue. Increased M&A despite a low spot prices indicates to me that the smart money believes that now is a buyers market.

The Russian Megatons to Megawatts program is coming to a conclusion in sixty days. No extension has yet to be granted. Russian nuclear weapons were converted to useable fuel for over 20 years for U.S. reactors. That will be no longer and the U.S. utilities will need to buy around 24 million pounds off of the market. Remember the U.S. mines less than 8% of what it currently consumes. The State of Wyoming is granting advantageous loans to new junior uranium producers. This could be a great area for junior mining investors to position themselves as I believe Rosatom or Cameco may be looking to expand their strategic positions in Wyoming and the Southwest US.

[Tommy]

$SXRZF - $UUU.TO - Uranium One Closes Going Private Transaction

http://investorintel.com/nuclear-energy-news/uranium-one-closes-going-private-transaction/

October 18. 2013 (Source: CNW) – Uranium One Inc. (“Uranium One” or the “Corporation”) today announced the closing of its going private arrangement transaction, pursuant to which Uranium One Holding N.V. (formerly Effective Energy N.V.), an affiliate of JSC Atomredmetzoloto (“ARMZ”), acquired all of the outstanding common shares of Uranium One that it and its affiliates did not previously own.

Payment of the cash consideration of C$2.86 per share for the shares acquired pursuant to the arrangement will be made by the depositary (contact information below).

Shareholders who hold their common shares through a broker or other intermediary may contact that broker or other intermediary for instructions and assistance in receiving the consideration for their shares. Shareholders who hold their common shares in certificated form are required to complete and sign a letter of transmittal (form of surrender for shareholders in South Africa) and deliver it, together with their share certificates and the other required documents to the depositary. Further information concerning these processes is outlined in the Corporation’s management information circular dated February 8, 2013, a copy of which is available, along with the letter of transmittal and form of surrender, under the Corporation’s profile at www.sedar.com and on the Corporation’s web site at www.uranium1.com/index.php/en/investor/financial-reports-and-filings/regulatory-filings.

With the completion of the plan of arrangement, it is expected that the common shares of the Corporation will be de-listed from the Toronto Stock Exchange at the close of business on October 21, 2013 and from the JSE Ltd stock exchange on October 22, 2013.

Within 30 days the Corporation intends to make an offer to purchase the $259,985,000 aggregate principal amount of its convertible unsecured subordinated debentures due March 13, 2015 as required by the terms of the debentures.

About Uranium One

Uranium One is one of the world’s largest uranium producers with a globally diversified portfolio of assets located in Kazakhstan, the United States, Australia and Tanzania. As a result of the arrangement, ARMZ and its affiliates now own 100% of the outstanding common shares of Uranium One.
- See more at: http://investorintel.com/nuclear-energy-news/uranium-one-closes-going-private-transaction/#sthash.RcqcSnT2.dpuf

[TOUCAN]

#12 Marked

[Tommy]

Uranium Miners Analyst Watch: October Edition

Oct 10 2013, 10:50 | 6 comments | includes: CCJ, DNN, EFRFF.PK, UEC, UEXCF.PK, URG, URRE, URZ
BOOKMARK / READ LATER

http://seekingalpha.com/article/1738652-uranium-miners-analyst-watch-october-edition?source=email_macro_view&ifp=0

Editors' Note: This article covers one or more micro-cap stocks. Please be aware of the risks associated with these stocks.

We have been monitoring analyst data published on Yahoo.com for some time now, and have been reporting our observations on a monthly basis. This article provides an update for uranium mining companies for the month of October and will compare present data with the data reported in our September edition. We hope that our observations provide yet another data point supporting investment decisions of our readers.

Most companies mentioned in this article have more analysts following their progress than considered in our database. This article only considers analyst reports available through Yahoo.com and not all analysts are providing their data free of charge on this platform.

As in previous articles in this series, we have considered the following companies in alphabetical order for this update: Cameco (CCJ), Denison Mines (DNN), Uranerz (URZ), Uranium Energy (UEC), Uranium Resources (URRE) and UR-Energy (URG). For the present article, we are adding Energy Fuels (EFRFF.PK), Fission Uranium (FCUUF.OB) and UEX Corp (UEXCF.PK). Price targets for the latter three companies are given in Canadian Dollars and we used a conversion rate of 0.97 for this report.

Our data for these stocks is summarized in the table below. The first three columns list the company names, ticker symbols and share prices at the time of writing. Price targets (low, median and high) are listed in the following three columns. These targets are followed by a column giving the number of analysts providing data to Yahoo.com and the mean recommendations given by these analysts ranging from 1.0 (strong buy) to 5.0 (sell). This concludes the data sourced directly from Yahoo.com.

The following columns are colored in light green and contain data derived from our source data. These data points are given in percentages related to the share price at the time of writing. The column titled "median-price" gives the differences between the share price and the median price targets. The column titled "high-low" gives the difference between the high and the low targets. The last four columns titled "target change" document the changes in price targets since the September report with the last columns giving the average changes over the low, median and high price targets.

(click to enlarge)

Note: At present there is only data from one single analyst available on Yahoo.com for Uranium Resources and Fission Uranium respectively.

The difference between the current share price and the median price target is listed in column "median-price." Under normal circumstances, we would view a large value in this column as an indicator for the potential of disproportionate gains over the coming year.

Both analysts following UEX Corp give price targets in excess of double the current share price. From the group of companies considered for this article, UEX Corp clearly seems to be considered the company with the greatest potential, followed by Uranerz and Energy Fuels. Fission Uranium on the other hand is trading very close to the median target.

(click to enlarge)

The results from column "high-low" in the table above are visualized in the next diagram. They can be interpreted as a measure for divergence in analyst opinion. For Fission Uranium and Uranium Resources, targets from only one analyst were available.

Analysts following UEX Corp are both bullish on the company, but seem to value the potential very differently. Uranerz comes second in this ranking closely followed by Denison Mines, UR-Energy and Cameco. Analysts are displaying the greatest degree of agreement in price targets for Uranium Energy.

(click to enlarge)

On average, price targets have been increased by 2.93% with Denison Mines leading the pack. Uranerz' price targets have been cut presumably reflecting the recent capital raise. For the three newly introduced companies, no changes are registered due to lack of data for last month. Price target changes are shown in column "target change average" and the diagram below.

(click to enlarge)

Unchanged from last month, UR-Energy and Uranerz are seen most favorably by analysts at present in terms of buy recommendations as documented in column "Recommendation" and the diagram below. Cameco and Uranerz have suffered a small increase in analyst recommendations indicated by the small red bars which represent a new feature in our monthly reporting.

(click to enlarge)

Our pick of the month

UEX Corp is a new introduction to our data base and seems to enjoy coverage from two very bullish analysts. We recommend further research and attention to this high risk/reward small-cap exploration play in the Athabasca basin.

Before we finish, we would also like to draw attention to the recent drop in Cameco's share price following the announcement of further delays at the Cigar Lake mine. We believe that Cameco's share price is setting up for another test of support at $16.60 and will keep a watchful eye in hope for an advantageous entry point.

[Tommy]

Notes from the SME Global Uranium Symposium

http://www.discoveryinvesting.com/uploads/MNs_Wednesday_October_9_2013.pdf

..."Renaissance Delayed or Renaissance Denied?

I’ve returned from the SME Global Uranium Symposium last week in Corpus Christi, TX withmy tail between mylegs

It appears that any “nuclear renaissance” will be delayed for
some time due to a confluence of factors

This offers investors perhaps the most precious commodity of all
time to assess investment prospects in the space as the situati
on slowly turns

I reiterate that the lowest cost producers typically ISR are the place to focus in the current depressed uranium pricing environment" ...

[Tommy]

Uranium and the United States: Colin Healy

http://uraniuminvestingnews.com/15801/uranium-and-the-united-states-colin-healy.html?pmc=E-1&MyID=[e-mail]&utm_source=Resource+Investing+News&utm_campaign=11e9cde3fb-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_f83d87db0f-11e9cde3fb-248737485

Thursday September 26, 2013, 4:30am PDT

By Vivien Diniz - Exclusive to Uranium Investing News
Share on email Email

supply-demandCanada has been a hot topic for uranium market players due to the high-grade discoveries in the Athabasca Basin. But the buzz around Canadian uranium deposits should not take precedence over the bigger picture price catalysts at play in the United States.

From alternative energy generation options, supply and demand fundamentals and uranium companies active in the U.S., Colin Healey, research analyst at Haywood Securities, shared some uranium market insight with Uranium Investing News.

UIN: Given the current supply/demand situation in the U.S., do you think that the U.S. would look to other methods of energy generation (natural gas, coal) if they are incapable of meeting uranium demand?

CH: The uranium demand versus supply discrepancy in the United States has existed for many years. On the demand side, the U.S. maintains the world’s largest reactor fleet with about 100 operable reactors, or about 23% of the global operable fleet, and accounts for almost 29% of global annual uranium requirements for civil nuclear power generation. These reactors require in the neighborhood of 50 Mlb of uranium as U3O8 annually, yet U.S. uranium production was just a fraction of that in 2012, at just over 4 Mlb U3O8, similar to its annual average production since 2005 of about 3.9 Mlb. So the US has perennially sourced over 90% of its uranium demand requirements via imports.

So to answer your question directly, I don’t believe that the fact U.S. production of uranium falls dramatically short of consumption will be the major determinant in a decision to shift the energy mix away from nuclear. I think that that decision will be largely economic and political. At low natural gas and coal prices and a large domestic resource endowment, and lower capital hurdles in these methods of power generation, coupled with the U.S.’s drive for energy independence, there is certainly a strong case for these sources, and they will compete with nuclear for years to come. On the other hand, the U.S. has a huge investment on the ground in nuclear and continues to invest with 3 reactors currently under construction, another 9 planned, and 15 proposed according to the latest World Nuclear Association data. These reactors have run safely and reliably over an extended period, but nuclear will probably always be tricky politically, despite the industry’s strong relative safety and environmental operating record.

UIN: There seems to be some uncertainty with regards to the future of the U.S. reactor fleet. What do you expect? Do you think lower natural gas prices could cause the U.S. to abandon nuclear?

CH: The U.S. already has a massive investment in nuclear on the ground, and many of those reactors are expected to operate for years to come. We also perceive the planned and proposed reactor data from the U.S., as well as funding for enrichment technology development, as a signal of an ongoing intention for investment in nuclear. I think ultimately lower natural gas prices, and coal prices for that matter, could delay and temper investment in nuclear in the U.S., but I don’t expect an abandonment of nuclear by any means. For the existing nuclear plants, uranium fuel represents a very small component of total costs relative to fossil fuel-based energy production, and this should support at least continued operation of existing plants for their useful lives.

UIN: Is there any indication about how much secondary supply is available to utilities?

CH: Secondary supplies of uranium have been a major source of reactor fuel for the U.S. fleet, and the U.S. is by far the largest consumer of secondary sources. The major source of secondary supply over the better part of the last two decades has been the Megatons to Megawatts Russian nuclear warhead down blending program where inventory of highly enriched uranium has been down blended to low-enriched uranium. This program supplied about 20 million pounds of U3O8 equivalent to the U.S. in 2012, representing about 40% of fleet requirements. This program is scheduled to end later this year, and would reduce total uranium market secondary supplies by more than 40% in our estimation. In addition to that the U.S. Department of Energy sales account for about 5 Mlb U3O8 equivalent annually.

Mixed oxide or MOX fuels from recycled uranium and plutonium account for between 7 and 10 Mlb U3O8 equivalent annually in secondary supply. MOX fuel is only compatible for use in reactors designed for it, with the majority of those located in Japan. With the expiry of megatons to megawatts, we expect secondary sources of uranium to make up a materially smaller component of the supply equation, with primary sources, or mined uranium, picking up most of the slack. In 2013 we expect secondary sources will account for about 24% of total uranium supply, falling to about 18% in 2014, reducing the oversupply situation and eventually leading to a supply shortfall as the demand side recovers.

UIN: If China were to declare uranium a strategic metal, how would that impact the U.S.?

CH: I guess firstly, we should put this in context. China represents by far the largest piece of the future uranium demand growth equation in our view. The country currently has the world’s 8th largest operable reactor fleet at 17 units, but has 28 reactors under construction, over 50 planned, and almost 120 proposed. The World Nuclear Association estimates 2012 Chinese uranium production at 3.9 Mlb U3O8, representing about 2.6% of global supply, and less than ¼ of its nuclear fuel requirements. More than 97% of global production in 2012 was sourced from just 15 mines, all outside of China. China currently claims it has domestic uranium deposits representing as much as 10 times the externally known uranium reserves of the country. Those known reserves represent less than 4% of global reserves, and are generally low grade, placing an increasing reliance on external sources for import.

China’s investment outside of the country indicates that the reserves it suggests it has may not be economically viable or readily exploitable in the near term if largely undeveloped. They are investing in higher quality projects outside of the country.

China declaring uranium a strategic metal could logically have uranium price implications to the external market. For example, if China embarked on an aggressive inventory building program, this could have a trickle-down effect on U.S. nuclear plant operators as prices respond, but conversely, in a global market, rising uranium prices would help U.S.-based uranium producers. On the topic of higher uranium price, we note that we would expect the potential positive impact on U.S. domestic uranium producers to be much more pronounced than the negative impact to U.S. utilities of the increase in cost. This is due to the relatively small component uranium represents in the total operating cost of a nuclear plant. There is no doubt that, given China’s aggressive civil nuclear expansion plans, uranium will be strategically important to the country. I think we’ve seen recognition of this from China as it invests in uranium deposits externally such as the massive Husab uranium deposit in Namibia, which is targeting production in later 2015, eventually aiming to produce more than 15 Mlb U3O8 annually.

UIN: Who are the main players in the United States uranium sector (major, mid-tier, junior) and where are they operating/exploring?

CH: Uranium concentrate production in the U.S. is currently sourced from just 6 operations controlled by 5 Companies. Major uranium producers including Cameco (TSX:CCO, NYSE:CCJ), through its Smith Ranch-Highland operation in Wyoming, and Crowe Butte operation in Nebraska, and Uranium One (TSX:UUU), through its Willow Creek operations in Wyoming, are mining by in-situ recovery (ISR) method.

Junior miner Energy Fuels (TSX:EFR, OTC:EFRC) produces uranium from its White Mesa mill in Utah which is fed by conventionally mined ores sourced from Arizona, Colorado, and Utah. Uranium Energy Corp (NYSEMKT:UEC) produces uranium by ISR method from it Palangana wellfield in south Texas, feeding its Hobson central processing facility. Finally there is a private company, Mesteña Uranium LLC, operating the Alta Mesa ISR uranium project, also in south Texas.

Advanced uranium project developers in the U.S. include Peninsula Energy (ASX:PEN), Uranerz Energy (TSX:URZ, NYSEMKT:URZ) and Ur-Energy (TSX:URE, NYSEMKT:URG), each completing construction of their respective ISR uranium facilities, all in Wyoming, and all aiming to be in production in the coming year. There are several uranium explorers active in the U.S. as well, particularly in that areas mentioned above, although continued consolidation is reducing their numbers.

One of the largest undeveloped deposits in the U.S., the Coles Hill project, is located in Virginia and is controlled by Virginia Energy (TSXV:VUI), and would be an open pit conventional mining concept.

UIN: A lot of the deposits in Wyoming are in situ recovery. How does ISR mining compare with hard rock mining (in terms of cost)?

CH: In-situ recovery mining, also known as in-situ leach, is a method of mining where uranium deposited in hydrologically confined layers of the earth is extracted by injecting a solution into the layers capable of dissolving the uranium, at targeted depths, through a series of injection wells, and pumping out this uranium-bearing solution through a series of grid-patterned recovery wells, for processing in surface-based treatment facilities. 45% of global uranium production in 2012 was by this method. ISR mining generally has the advantage of lower up front capital cost, and due to the mining methodology, a smaller surface impact.

Successful ISR operations of this type can also yield lower operating costs than conventional mining methods. Still large higher grade conventional mining operations can achieve low cost production, but generally involve significantly longer construction periods, and higher capital burden.

UIN: There has been a lot of consolidation in the uranium sector in recent years, do you see this as being a trend that we will see more of moving forward?

CH: I still believe there is room for consolidation in the uranium sector globally. I think that in a recovering uranium price environment, you may see competition for some of the more interesting deposits out there.

I think that those who are consolidating now, when uranium prices seem to be bottoming, will be rewarded. Sitting on the sidelines too long may mean trying to make a move in a more competitive situation, and ultimately mean higher acquisition costs.

UIN: What role, if any, will utilities play in the industry’s consolidation?

CH: I don’t expect U.S. utilities will change their direction and become consolidators or owners of uranium producing operations. I do however see potential from utilities and State Owned Enterprises elsewhere to become active investors in uranium producing operations. China, India, South Korea, Japan, and Russia come to mind obviously. I think U.S. utilities tend to be happier buying uranium through regular channels, typically contracts with existing and near term producers, with a limited appetite for investment at the mine level, unlike some of their Asian peers.

UIN: Why is it that the Asian utilities might be more inclined to lock down future supply?

CH: It seems partly structural and partly philosophical. The United States has a great relationship with Canada – one of the largest producers of uranium in the world and it’s close. I don’t think that US utilities feel the same need or stress to lockdown future supply through ownership and development projects and mines.

The U.S. doesn’t have the same scale plan of civil nuclear expansion as China, with the U.S.’s fleet largely built and operating. China has to be looking at Global uranium market forces. Specifically current prices, supply, demand growth, and consider if market prices reflect a level high enough to incentivize the new mine construction which will ultimately be needed to support incremental demand, of which China represents a large part. China really has to consider its own impact on the demand equation and the market’s response – if they build those reactors, where is the uranium going to come from if market prices don’t properly reflect the future demand versus supply equation? They are not willing to risk that market forces will be efficient as they build out, and assume supply will be available. As such, we expect China will continue to secure and develop strategic supply through investment at the mine project level.

UIN: Well, thank you Colin for sharing your insight with us.

CH: Thanks.



Securities Disclosure: I, Vivien Diniz, hold no investment interest in any of the companies mentioned.






Trade free for 60 days + get up to $600 with TD Ameritrade.

Tags: amex:uec, Cameco, Energy Fuels, Megatons to Megawatts, nuclear, TSX:CCO, TSX:EFR, TSX:UUU, United States, Uranium Energy Corp., Uranium Exploration, Uranium One, Wyoming
Return to Article Directory
Read more articles by Vivien Diniz
Interested in Uranium Stocks?
Sign up to receive free investor kits from leading Uranium companies by selecting from the list below.

Aldrin Resource Corp.
Alpha Minerals Inc.
Azincourt Uranium
Cyclone Uranium Corporation
Energy Fuels
Kivalliq Energy Corporation
Zadar Ventures Ltd.
Private Placement Opportunities
Select this to be notified regarding private placement opportunities and to be referred to an investment advisor. Accredited investors only

Email
Phone Number
Name

See our Privacy Policy
Unlock insight here
Get the free Uranium Newsletter
Email
About our newsletter
Featured Stocks
Mesa Exploration Corp. – Developing the Bounty Potash Project

Mesa Exploration Corp. (CVE:MSA) is a mineral exploration and development company with a diverse portfolio of projects, including lithium and potash, in the western United States.
Zadar Ventures Ltd. – Aggressive Uranium Exploration in the Athabasca Basin
Aldrin Resource Corporation – Uranium Exploration in the Patterson Lake District
Azincourt Uranium Inc. – Uranium Exploration in the Athabasca Basin
View all Featured Stocks
Top Articles

Top Uranium
Top of Network

Uranium Price Spike Could be Dramatic: Rob Chang
Fission Uranium to Acquire Alpha Minerals, Definitive Agreement Signed | Alpha Minerals Inc. (TSXV:AMW)
Top Ten Stocks for a Uranium Price Rebound: David Talbot
Top 3 Uranium Mines in the World
Uranium Price Headed for $50 in 2014, Taking Stocks Higher: Rob Chang
Mongolia to Take Areva Stake
Uranium Outlook 2013: Rebound on the Horizon
India, Australia Eyeing Uranium Supply Deal
What’s So Great About Canada’s Athabasca Basin: Joe Mazumdar
Despite Japan’s Radioactive Leak, Uranium Outlook Still Good

[Tommy]

HEU Has Ended?What Now? Uranium Shorts Potential Squeeze

http://www.investorsguru.com/ViewNewsletter.html?id=327

Where's The U.S.' U3O8?Now That Russia's Down-Blend Is Complete?

A recent World Nuclear News article?Russia completes Megatons to Megawatts work?appears to answer any doubts whether the long-standing uranium down-blend program between the U.S. and Russia is really ending this year. When I say really ending this is just my suspicious side wondering if I'm missing something with the U3O8 spot price now at 8-year lows as it hovers around $34/lb.

The market has known for a while that the end of this utility supply program may significantly boost both near and long-term uranium prices?removing ~24M lbs. per year from an already tight market that annually consumes more than it mines. To make supply matters worse, mines have been deferred due to low prices while demand is expected to rise as Japan's reactors start coming back online later this year, and with the number of reactors worldwide set to more than double by 2030.

The August 29 article says that the final shipment of low-enriched uranium (LEU) from TVEL's JSC Electrochemical Plant (ECP) marks the completion of Russia's 20-year commitment to down-blend weapons-grade uranium. An August 21 picture shows the final canisters of LEU leaving the ECP plant by rail on route to St. Petersburg, to then be shipped to the USA.

Formally known as the HEU Agreement?contracted in 1994 between the US Enrichment Corp. (later privatized as USEC Inc. which I'll mention later) and Techsnabexport (Tenex)?since 2000 the program has been under the U.S. National Nuclear Security Administration (NNSA). To date 500 tonnes of Russian weapons-grade HEU?equivalent to 20,000 warheads?have been down-blended into 15,259 tonnes of LEU, and has provided about 10% of U.S. electricity over the past two decades.

This short article should beg investors to start asking how U.S. nuclear utilities intend to make this up? If you are thinking 10% doesn't seem like that big of a shortfall, then start thinking 50% as the total percentage of U.S. electricity supplied by nuclear power is about 20%. In other words the HEU program fuelled 10% of all U.S. electricity, which is half of the amount supplied by nuclear power.

The United States has the worlds largest fleet of nuclear power reactors with 100 operable, 3 under construction, 9 planned and 15 proposed, as of July 2013. Nuclear power plants provide reliable low-cost electricity with no greenhouse gas emissions, but they are multi-decade capital projects costing billions per reactor that are dependent on long-term uranium supplies?there is no fuel substitute!

With the HEU program almost done, nuclear utilities will have to buy more U3O8 on the open market or enter into more off-take supply agreements with uranium miners?both could spell substantially higher uranium prices. When you have an already tight market, with supply shrinking even as demand is growing, at some point the market's pricing mechanism has to kick in to find its equilibrium.

If uranium prices don't rise soon, not only will it be next to impossible to fund new discoveries or to develop deposits, more producing mines will close. Uranium is radioactive and highly regulated, meaning that this mining supply tap takes substantially longer to turn back on than for other mines.

This begs the question how many uranium miners have already committed their future production to a nuclear utility?to secure financing, or to avoid falling prices? This might explain why there is such a large $20 gap between the U3O8 spot price and long-term prices which are still around $55/lb.

Another question is how do the Russian's intend to replace the $13 billion in HEU revenues that Tenex has brought into Russia's federal budget? And what will become of Tenex's four ECP plants?

Nuclear power and uranium are important markets for Russia and for some of its nearby former soviet nations. The most recent uranium production table at world-nuclear.org shows that the top 7 out of 37 nations produced about 90% of the world's uranium last year. Kazakhstan was by far the largest producer with more than the next three?Canada, Australia and Niger?combined. Russia was only 7th, but with Kazakhstan and Uzbekistan these three alone represent 46%+ of world production.

I mention this just as an interesting observation; I have no idea if these countries even get along, let alone have any cartel-like ambitions. In any event Russia has been investing more, not less, in uranium production?soon to complete its takeout of the rest of (TSX: UUU) Uranium One Inc..

Russia needs all the uranium it can get as it expands its own fleet of nuclear power reactors with 33 operable, 10 under construction, 24 planned and 20 proposed. In addition Rosatom?Russia's state owned nuclear company?is promoting a special package deal to finance, build, supply and operate even more nuclear power plants worldwide.

Russia's nuclear power technology full-meal-deal with batteries-included is attractive to emerging nations like Turkey, Egypt, South Korea and others who have already signed long-term agreements. At $5B to $8B a pop per reactor, Russia might care less about the current low U3O8 price and any Rubles it might lose to the cost of mining?further straining future global uranium supplies.

Then there's China, which has been stockpiling uranium and securing its own supply?state-owned China Guangdong Nuclear Power Group bought Extract Resources last year for its rights to the Husab uranium deposits in Namibia, reputedly the fourth-largest in the world. China is the world's driver of future reactor builds with 17 operable, 28 under construction, 53 planned and 118 proposed.

The U.S. still has the world's largest fleet of nuclear power reactors that will require 18,983 tonnes of uranium this year?again to produce around 20% of its total electricity output. Uranium mining in the U.S. last year totalled 1,596 tonnes?only about 8% of its needs. Over half, around 11k tonnes, of the U.S.' uranium came from the HEU program?with its final delivery any day now!

With uranium prices still this low, there obviously was a bigger short-term supply overhang than at least I expected after Japan and Germany shut down its reactors after Fukushima. However with more reactors in the works today than ever before, and with countries like Russia and China tying up and needing large percentages of the world's uranium for themselves, how and where will the 100 U.S. nuclear power reactors source their own future uranium supplies starting next year?without driving prices considerably higher?

Uranium Miners' Potential Melt-Up

We all know that most metals and mining stocks?including uranium?sold off with gold earlier this year. Gold dropped sharply by around 15% to $1321.50/oz. in mid April, then bounced to the high $1,400s, flat-lined for a month just under $1,400, dropped sharply again in June by around 15% to $1,200, and has built back up to the low $1,300s since then. Uranium's slide was less dramatic than gold's in April, with its largest decline of 13% happening in July from around $40/lb. to $35/lb.

My point is that earlier this year most uranium mining stocks drifted in sync with falling U3O8, gold and other metals prices. However unlike gold and gold stocks which sank even further, uranium stocks stopped losing ground around mid to late April?even as the U3O8 spot price saw its biggest drop late in July. Why didn't uranium mining shares sell-off again?

When a mining group bases despite its underlying commodity price falling, this is often a key signal that market sentiment has finally swung the other way in anticipation of an upswing. This is not surprising in light of uranium's various positive catalyst events that have been playing out on cue.

Another key point is that after Fukushima, market sentiment for anything nuclear was so dismal that the whole uranium mining group got slaughtered to the point of becoming one of the most heavily shorted sectors?nuclear power growth and safety facts didn't matter. Shares of major producers are still down over 50%, with most smaller uranium miners down by up to 90%?or gone altogether.

The surprising part here is that despite the industry's fundamentals never looking better, most of these shorts seem to still be in place. When comparing these huge short positions to the total number of shares outstanding and the average daily trading volume, it appears that short covering rallies could become another potentially explosive upside catalyst?they have to cover sometime!

One specific example may have been (NYSE: USU) USEC Inc., which operates the only U.S.-owned uranium enrichment facility in the United States. We mentioned USU in our May 12 Filtered Mid-Day Market Movers Recap weekend newsletter after picking up on its trading action earlier that week at our website's daily Hot Sheet at $0.43.

The only news I could find to explain the action was their Q1-2013 Results?showing more losses?and that their American Centrifuge achieved two RD&D Program Milestones. USEC's stock was not even in compliance with the exchange's $1 minimum bid requirement at that time.

The NYSE asked the company multiple times about USU's trading, but USEC's policy is not to comment on unusual market activity. This was after USU's early July 1-for-25 reverse stock split?converting our earlier $0.43 post to $10.75. As a follow-up we posted USU again the last week of July and in our August 4 newsletter at $26.64, before it topped out at $29.12.

USU is now around $11/share and shows a split-adjusted 52-week low of $0.27 on July 1, and a high of $29.12 exactly four weeks later on July 29. NASDAQ shows 13,694,085 shares as the USU Short Interest on the June 28 Settlement Date, and 25.7 Days To Cover. The most recent August 30 report shows 963,856 shares short, taking 3.3 days to cover. If not a short-squeeze, then what am I missing?

The table below shows small-cap uranium miners with sizeable short interests and at least one mine in production or in development. Short data is from NASDAQ.com, stock prices are from our website.

Company (click to research) August 15
Short Interest Daily
Volume Time To
Cover 52-Week
High 52-Week
Low Last
Price 2007
High
(AMEX: UEC)
Uranium Energy Corp. 13,558,921 422,065 32-Days $3.02 $1.40 $2.33 $9.35
(AMEX: URG)(TSX: URE)
Ur-Energy Inc. 4,990,303 252,143 20-Days $1.39 $0.70 $1.04 $5.45
(AMEX: URZ)(TSX: URZ)
Uranerz Energy Corp. 6,689,889 569,277 12-Days $1.89 $0.88 $1.07 $7.65
(AMEX: DNN)(TSX: DML)
Dennison Mines Corp. 7,007,816 651,616 11-Days $1.72 $1.03 $1.16 $15.01
(NASDAQ: URRE)
Uranium Resources Inc. 2,179,660 228,960 10-Days $6.30 $1.75 $2.73 $14.99

With uranium stocks technically basing and starting to respond positively to news again, it will be interesting to see where these short positions eventually cover?will we see more USU style rockets?

Uranerz Energy Closes US$10 Million Bought Deal Financing

URZ traded up from $1.17 to as high as $1.64/share in July as construction advanced at Uranerz Energy's first ISR mine?located in the prolific Powder River Basin (PRB) of Wyoming; and on news that drilling of the company's first of two Deep Disposal Wells (DDW) had been completed.

Then after flatlining at the $1.30 level for a few weeks, the market didn't seem to like Uranerz' August 27 news release of a $10M financing at $1.17?taking URZ down to just over $1/share. Half-warrants attached allow the purchase of additional URZ stock at $1.60/share?potentially providing the company up to another $6.84M if exercised within 30-months after last Friday's closing.

While it's natural to hope for equity raises only at high prices, companies have to strike the best deal available to keep advancing their projects. Equity financing?if even available?is usually preferred because unlike debt it's not repayable, nor secured by assets. The alternative?especially in a weak market?is often exorbitant high-cost debt, which is just another form of shareholder dilution.

Uranerz' low-cost $20M state loan is still pending?queued with similar loans applied for before theirs. On June 7 URZ announced a $6M short-term note financing as a bridge to commence drilling of the DDWs at Nichols Ranch. Uranerz obviously thought their state loan would be processed by August 15?with the short-term note repaid?as the interest rate bumps up from 6% to 10% then.

Uranerz' news releases anticipate uranium production to commence around the end of this year. Now that this equity financing has closed, I wouldn't be surprised to see URZ start to trend higher again on construction updates, and as their last DDW gets completed?as their mine approaches the finish line.

[Tommy]

Uranium Miners Analyst Watch: September Edition

http://seekingalpha.com/article/1689712-uranium-miners-analyst-watch-september-edition?source=email_authors_alerts&ifp=0

Monitoring analysts and their price targets can provide valuable data points when making investment decisions. We have been keeping an eye on analyst data published on Yahoo.com for some time now, and have been reporting our observations on a monthly basis. This article provides an update for uranium mining companies for the month of September and will compare the data with our August edition. Most companies mentioned in this article have more analysts following their progress than considered in our database. This difference is due to the fact that not all analysts release their predictions to Yahoo.com. Instead, these data are sometimes viewed as proprietary information only available to subscribers of the analysts' services.

Unchanged from previous articles, in this series, we have considered the following companies in alphabetical order for this update: Cameco (CCJ), Denison Mines (DNN), Uranerz (URZ), Uranium Energy (UEC), Uranium Resources (URRE) and Ur-Energy (URG).

Our data for these stocks is summarized in the table below. The first three columns list the company name, ticker symbol and share price at the time of writing. Price targets (low, median and high) are listed in the following three columns. These targets are followed by a column giving the number of analysts providing data to Yahoo.com and the mean recommendation given by these analysts ranging from 1.0 (strong buy) to 5.0 (sell). This concludes the data sourced directly from Yahoo.com.

The following columns are colored in light green and contain data derived from our source data. These data points are given in percentages related to the share price at the time of writing. The column titled "median-price" gives the difference between the share price and the median target price. The column titled "high-low" gives the difference between the high and the low target. The last four columns titled "target change" document the changes in price targets since the August report with the last columns giving the average change over the low, median and high price targets.

(click to enlarge)

Note: At present there is only data from one single analyst available on Yahoo.com for Uranium Resources.

Uranerz has just completed a capital raise and we note that the effects of this move may not be considered in all of the published data, yet. We therefore advise caution with regards to interpretation of price targets set for this particular company.

The difference between the current share price and the median price target is listed in column "median-price." Under normal circumstances, we would view a large value in this column as an indicator for the potential of disproportionate gains over the coming year. However, in reference to the comment above, we would suggest that in the case of Uranerz, the large value in this column may also be a matter of analyst price targets not being fully adjusted for the recent capital raise at the present point in time.

Most other considered companies trade around 40% below the median target price (give or take a few % in either direction), with the exception of Uranium energy which seems to be close to fairly priced already in analysts' opinions.

(click to enlarge)

Divergence in analyst opinion is measured in column "high-low." The results from this column in the table above are visualized in the next diagram. A high degree of agreement in price targets is observed for Cameco and Uranium Energy with greater divergence for the remaining companies.

(click to enlarge)

Price targets have remained almost unchanged during the past month despite a further drop to around $34/lb in the uranium spot price. Price target changes are shown in column "target change average" and the diagram below. On average, price targets have increased by a negligible 0.64%.

(click to enlarge)

Unchanged from last month, Uranerz and Ur-Energy are seen most favorably by analysts at present in terms of buy recommendations as documented in column "Recommendation" and the diagram below.

(click to enlarge)

Our pick of the month

Until uranium prices pick up again, we believe that an investment in Cameco is the safest bet. The protracted wait for rising prices is sweetened by a dividend yielding around 4% at the present level.

[Tommy]

What’s So Great About Canada’s Athabasca Basin: Joe Mazumdar

http://uraniuminvestingnews.com/15789/whats-so-great-about-canadas-athabasca-basin-joe-mazumdar.html?utm_source=Resource+Investing+News&utm_campaign=3ac839b969-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_f83d87db0f-3ac839b969-248737485

Thursday September 12, 2013, 4:30am PDT

By Vivien Diniz - Exclusive to Uranium Investing News
Share on email Email

What's So Great About Canada's Athabasca Basin: Joe MazumdarWith today’s uranium prices hovering near $35 per pound of U3O8, uranium production is not at its most profitable. However, if there is one place in the world that high-grade uranium deposits have enabled producers to continue operating, it is Canada — specifically, the Athabasca Basin in Northern Saskatchewan.

With the help of Canaccord Genuity’s senior mining analyst, Joe Mazumdar, Uranium Investing News (UIN) explores what makes Canada a top destination for uranium mining, also looking at which companies are taking advantage of the Athabasca Basin’s mineral wealth.

UIN: To give our audience an overview, who are the main players in Canada’s Athabasca Basin and where are they operating?

JM: The main players in the uranium sector in Canada are focused on the Athabasca Basin of northern Saskatchewan include Cameco (TSX:CCO) and Areva (EPA:AREVA). Cameco operate the high-grade (16.46-percent TSXU3O8), low cost (<US$30/lb U3O8), unconventional underground (raise bore) McArthur River (CCO 69.8 percent, Areva 30.2 percent) project that has a production capacity of 18 to 21 Mlbs per year and the smaller (3.8 Mlbs/y U3O8 in 2012), lower grade (0.73-percent U3O8) Rabbit Lake (100 percent CCO). Both are located on the eastern side of the Athabasca Basin. McArthur River ore is treated at the Key Lake facility (18.7 Mlb U3O8/y capacity) which is located 80 km to the southwest and is operated by Cameco. Cameco’s significant development project is Cigar Lake (Cameco 50 percent, Areva 37 percent and others with 13 percent), another high-grade (18.3-percent U3O8), unconventional underground (jet bore) mining project with a potential production rate of 18 Mlbs/y U3O8.

Areva operate the McClean Lake processing facility, again on the eastern side of the Athabasca Basin, a plant they are upgrading with a C$150 million investment to double capacity (12 to 24 Mlbs/y U3O8) to predominantly treat ore from the Cigar Lake development project. They also have joint ventures on development projects such as Shea Creek (51 percent Areva, 49 percent UEX) which hosts over 95 Mlbs of U3O8 in global resource. Shea Creek is 15 to 20 kilometers south of the Cluff Lake mine site that produced over 60 Mlbs of U3O8 grading approximately 0.9-percent U3O8 over a 22 mine life to 2002 on the western side of the Athabasca Basin.

Another major company that’s entered the Athabasca Basin is Rio Tinto (NYSE:RIO) with their acquisition of Hathor (Roughrider project) in January 2012 which has 57 Mlbs of U3O8 in global resource grading 4.7 percent on the eastern side of the basin. Some other major exploration and developers include Denison Mines (TSX:DML) and UEX (TSX:UEX), which have the other portion of Shea Creek along with the Hidden Bay project. As the uranium sector is heating up, there is a growing amount of junior explorers focused on the Athabasca Basin including Alpha Minerals (TSXV:AMW) and Fission Uranium (TSXV:FCU, OTCQX:FCUUF) who have in our opinion, the most attractive uranium prospect (Patterson Lake South) in the hands of junior company (50/50 joint venture) since Hathor Exploration’s Roughrider project.

UIN: As far as global production is concerned, what market share of uranium production does Canada hold?

JM: In 2012, Canada’s U3O8 production was 15 percent of global mine output from two mines (McArthur River and Rabbit Lake) operated by Cameco in the Athabasca Basin with the majority (80 percent) coming from McArthur River.

UIN: That’s interesting. The majority of Canada’s uranium market share is attributed to just Cameco’s operations?

JM: Correct. Also, the nearest-term development project in the pipeline within the Athabasca Basin is the Cigar Lake project also operated by Cameco (50 percent), which will be processed in the McClean Lake plant operated by Areva.

UIN: Geopolitical stability is important for uranium. Can you help our readers understand which regions are the most stable and favorable to uranium mining?

JM: I believe that geopolitical stability and security of supply is important for nuclear power generators. The high production growth rates from central Asia (Kazakhstan) and Africa (Namibia, Niger, Malawi, South Africa) have lowered the demand exposure to production from more stable geopolitical jurisdictions such as Canada, USA, and Australia from ~40 percent in 2008 to ~30 percent in 2012. As far as the breakdown of U3O8 mine production in 2012, approximately 37 percent was from Kazakhstan, 18 percent from Africa (Niger, Namibia, Malawi and South Africa) – so over half from these regions – with 15 percent from Canada and 12 percent from Australia, which we consider stable jurisdictions. Assuming no new production, current existing production to 2020 would include only 20 to 25 percent from stable jurisdictions such as Canada, Australia and the U.S..

UIN: Looking back at the Athabasca Basin — particularly Patterson Lake — based on the current available data on uranium discoveries in the Patterson Lake Camp, can you help us understand what direction the uranium trend appears to be going?

JM: At the Patterson Lake South project, work to date, including their summer drilling program (11,000m) which is 40 to 45 percent complete, suggests a fertile east-northeast share zone that is at least 1.0 km long and remains open to the east-northeast and west-southwest. To date drilling indicates that the U3O8 mineralization pitches to depth to the east-northeast. They have intersected high-grade U3O8 mineralization over 50m grading ~6.6-percent U3O8 at their R390E zone at a downhole depth of 95m. The relatively shallow depth to mineralization suggests the potential for a low technical risk method of extraction (open pit) versus unconventional underground methods.

UIN: Okay. So given these directions of mineralization, which companies look to be best situated to take advantage of the uranium mineralization in Patterson Lake?

JM: To the west, companies with ground exposed to the Patterson Lake South trend include Forum Uranium (TSXV:FDC) to the west and along strike. And to the east, there is NexGen Energy (TSXV:NXE). NexGen has a 3,000-meter drill program they’re just beginning. Others include SkyHarbour Resources (TSXV:SYH), Athabasca Nuclear (TSXV:ASC), Noka Resources (TSXV:NX) and Lucky Strike Resources (TSXV:LKY). Recently, Makena Resources (TSXV:MKN) has entered into an option agreement to acquire 6,687 ha of land proximal to the Patterson Lake South area from CanAlaska Uranium (TSX:CVV).

UIN: What has made Patterson Lake and the Athabasca Basin overall really promising?

JM: The Athabasca Basin promises higher than the global average for U3O8 grade in a geopolitically stable jurisdiction with access to first world infrastructure depending on the location. There was an article recently by the EIA which indicated that 83 percent of the U3O8 supply from foreign sources. Geopolitical risk and security of supply is an issue for nuclear power plants into the future when supply tightens such that, in our opinion, places like the Athabasca Basin should demand a premium. However, the technical risk and high capital costs of the unconventional underground mining methods are an issue.

What has made the Patterson Lake so compelling at this stage of exploration and resource delineation is the potential for high-grade uranium mineralization (>2 to 3 percent U3O8) with along a strike length of at least 1km that is close to surface (60 to 70 meters average depth to top of mineralization at the westernmost zone). The potential amenability to open pit mining and conventional underground presents a lower barrier to entry for potential suitors. Although the project is located on the southwest margin of the Athabasca Basin and far from existing processing plants, there is was a process facility at the former Cluff Lake mine, located 70 to 80 km to the north, that produced over 60 Mlbs of U3O8 over a 20 year mine life. Based on the drilling with assay results to the end of the winter 2013 program, we have modeled a resource of about 20 Mlbs grading at 2 to 3 percent at two zones. Also, metallurgically, so far, the multi-element assays suggest that there are no deleterious elements that would make extraction problematic. Assay results are still pending (first weeks of September) from the current summer 2013 program of 11,000m (2 core rigs) which is 40 to 45 percent complete.

UIN: Apart from uranium producers like Cameco and Areva, which companies have greatest potential in today’s uranium market?

JM: Currently, the broker average price is US$34 to $35/lb of U3O8 due to the fact that, according to Ux Consulting, due to weak demand in the face of inventory carryovers, non-mining supply and the majority of mine supply is generated at a cost of below US$40/lb during this period. This has weighed down on producers who are overly exposed to spot pricing (US$34 to $35/lb of U3O8) versus long term pricing (US$55 to $57/lb of U3O8).

However, over the medium to long term, the forecast of a rising uranium price environment is predicated on the incentive price necessary to encourage mine developers to bring their projects online and accommodate future Asian demand (China, 14 percent CAGR from 2010 to 2030, UxC). Incentive pricing required to bring the additional ~55 Mlbs of U3O8 from mine production forecast to come into production by 2020 may be ~US$65 to 70/lb. Dependence on mine production will shift on supply growth, with the majority of growth concentrated on 4 projects with varying risk profiles from geopolitical (Imouraren, Niger) to technical (Cigar Lake, unconventional U/G). A low technical risk project such as Patterson Lake South in a safe geopolitical jurisdiction (Athabasca Basin, northern Saskatchewan) with a history of uranium production should warrant attention.

UIN: Okay. So consolidation is definitely something that is going to be happening in the market.

JM: Recently, Fission Uranium made an opportunistic bid to acquire their Patterson Lake South JV partner (50/50), Alpha Minerals, in an all-share offer (5.3 AMW for 1 FCU), an offer which is not out of line versus our estimates. Consolidation is the endgame for these two companies but more important than relative valuation (5.3:1) is management structure in the combined entity. This remains a significant obstacle to a potential merger of equals. Prior to its acquisition (Jan 2012) by Rio Tinto, Hathor had consolidated ownership of the Roughrider project in April 2011; hence, consolidation is an important piece in the future M&A puzzle for a larger suitor. Another point worth of note, with respect to consolidation of the Patterson Lake South area is that Fission currently are the operators. But in April 2014, according to the joint venture agreement, it will switch to Alpha Minerals.

UIN: Well, thank you Joe for your insight on the Athabasca Basin.

JM: Thank you.



This interview is featured in the recent Resource Investing News uranium eBook. For more exclusive interviews, get your copy now.

Securities Disclosure: I, Vivien Diniz, hold no investment inters in any of the companies mentioned.

Editorial Disclosure: Alpha Minerals is an advertising client of the Investing News Network. This article is not paid-for advertising.

Analyst Disclosure: Alpha Minerals is an investment banking client of Canaccord Genuity. Canaccord has received compensation from Alpha Minerals. Joe Mazumdar has covered both Alpha Minerals and Fission Uranium in his research and holds a speculative buy rating on both companies. Additional information, including disclosures regarding all securities under research coverage, is available on Canaccord’s website.

[Tommy]

Uranium Price Headed for $50 in 2014, Taking Stocks Higher: Rob Chang

http://www.theenergyreport.com/pub/na/15575?utm_source=delivra&utm_medium=email&utm_campaign=TER+Final+9-10-13

Rob Chang The stubborn spot price of uranium has frustrated market watchers for the past year. But that's not the whole story. As most long-term contracts have been made at higher prices, astute investors have been slowly moving into the stocks of uranium producers and explorers in anticipation of the delayed commodity price move expected in 2014. In this interview with The Energy Report, Cantor Fitzgerald Canada Metals and Mining Analyst Rob Chang explains what lies ahead and how the turnaround in the uranium market will benefit the companies he thinks investors should focus on for maximum profits.

Companies Mentioned: Alpha Minerals Inc. : Azincourt Uranium Inc. : Cameco Corp. : Denison Mines Corp. : Energy Fuels Inc. : Fission Uranium Corp. : Kivalliq Energy Corp. : NexGen Energy Ltd. : Rio Tinto Plc : U3O8 Corp. : Ur-Energy Inc. : Uranium Energy Corp. : Uranium Participation Corp.
Related Companies

: European Uranium Resources Ltd.
: Uranerz Energy Corp.
: Virginia Energy Resources Inc.

The Energy Report: During your last interview in January, you, along with many analysts, were expecting that 2013 was going to be the turnaround year for the uranium market. With the current price hovering around $35 per pound ($35/lb), what's it going to take to get this market moving?

Rob Chang: The uranium spot price has not moved as quickly as we were forecasting. However, uranium equities have shown some strength over the past year or so, as investors started buying ahead of the uranium spot price moving. Spot prices depend more on utilities and their short-term requirements, which translates into their activity in the spot market. However the spot market accounts for a small portion of the total market. Most transactions occur in the long-term prices, and the long-term contract price is at a healthier level in the $50/lb range. We believe the uranium spot price is currently below the marginal cost of production and therefore unsustainable, as half the producers around the world are losing money.

What's really going to drive the price higher is utility demand. Most utilities will go back into the market at some point to buy more material. We expect that will happen later this year or early next year. For this year, we're forecasting roughly flat to slightly higher prices if buying activity does heat up, and a much higher price next year, starting in Q1/14 or Q2/14, depending on how quickly utilities move. We are very bullish and forecasting an average 2014 uranium spot price of $49.50/lb. Investors primarily focus on spot prices, but they really should be looking at the long-term price instead.

TER: On August 21, the Russians made their final shipment of LEU (low enriched uranium) under the Megatons to Megawatts HEU Agreement. This was one of the milestones many were looking for as a positive market catalyst. Is this going to help the market?

RC: This eventuality has been baked in for four or five years now, but the generalist investors who don't focus on resources may see this as an important milestone and start looking at uranium.

TER: What other market developments have you seen since we last spoke that give you hope for salvaging 2013 as a turnaround year for uranium? Or are we now looking forward to 2014?

RC: 2014 is really when we'll start seeing some meaningful developments that would move the market, barring an earlier-than-expected announcement from the Japanese government. Since we last chatted, the Japanese government's Nuclear Regulatory Agency (NRA) has been established and is evaluating applications for 10–12 reactors to be turned on, or at least being approved by this year. We would be surprised to see any this year and at most we think up to three might be turned on this year. We think the majority of the restarts are really going to happen next year. Our forecast is that of the 50 reactors in Japan, about two thirds, will be turned back on at some point over the next two or three years. That's certainly going to be a positive catalyst.

I don't see any other major catalysts on the horizon between now and then. The equity markets generally lead the fundamental supply and demand numbers, and we've seen some opportunistic investors start to pick away and show some interest in the space. So in the last few months of this year, we do expect the equities to start leading the way prior to the uranium spot price actually moving.

TER: How about the situation in China?

RC: China has the largest nuclear buildup program in progress right now. Russia also has very extensive plans to build more reactors. The United Arab Emirates (UAE) has plans for building nuclear reactors, which sends an important signal to the market. As one of the most oil-rich countries in the world, it could probably power itself with oil, yet is looking to diversify into nuclear. I think that's a fantastic sign. So we certainly are looking forward to seeing developments.

TER: What do you see going on with specific companies that might create some activity in the stocks?

RC: Starting off at the top with the largest publicly traded company, Cameco Corp. (CCO:TSX; CCJ:NYSE) is putting Cigar Lake into production. Several years ago we were wondering whether Cigar Lake would even start, and now it's in the early stages of going. Cigar Lake has a major impact on future supply. With the HEU Agreement coming off, one of the new projects that was supposed to make up the difference is Cigar Lake. How well Cameco can ramp up production will be a very key topic for us, but we are still very bullish on the company. We do cover the stock with a Buy recommendation and we use a conservative 14x forward cash flow multiple to arrive at our $26.50 target price. Historically, Cameco has traded at 15x cash flow. Once there is interest returning to the uranium space, we believe Cameco will probably trade at its historical multiple, pricing it closer to the $30 range.

Another investment that we are bullish on is Uranium Participation Corp. (U:TSX), which is more of an investment portfolio that holds physical U3O8 and UF6. This gives investors full exposure to the commodity without any of the possible operational or geopolitical risks associated with miners. So we are very positive on that and do note that it's currently trading around par to its net asset value. Historically, it has traded at a slight premium, given that investors tend to buy the portfolio in advance of expected increases in the spot price.

Moving to the explorers, outside of Cameco and AREVA (AREVA:EPA), the next impressive land package in the Athabasca is held by Denison Mines Corp. (DML:TSX; DNN:NYSE.MKT). Its high grade Phoenix discovery at its Wheeler River project is arguably the highest grade uranium project in the world, and has every indication of becoming a world class project. On top of that, it also either owns entirely, or has significant pieces of assets surrounding Rio Tinto Plc's (RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK) Roughrider project, for which it acquired Hathor Exploration Ltd. in a battle with Cameco.

If Rio Tinto is going to make a go of it in the Athabasca Basin, it probably needs to expand its footprint there because Roughrider's 70+ million pounds (7+ Mlb) is not large enough to move the needle for a company of its size. Including the mineralization and resources surrounding Hathor, you're probably in the 100–130 Mlb range with growth potential. If Rio Tinto is to be aggressive in this space, it would probably have to buy Denison to consolidate its position in the basin. It also has valuable mill access. Cameco is already the juggernaut in the region and could opt to consolidate its land position in the Athabasca and, if it wanted to make a strategic move, push Rio Tinto out. If Roughrider is not large enough to be economic, and if Cameco ties up everything around it, Rio Tinto could decide to pack up and leave.

TER: What about some of the smaller players?

RC: Ur-Energy Inc. (URE:TSX; URG:NYSE.MKT) is a company that just started production. We visited its Lost Creek mine and were very impressed with what we saw. It has a management team from large world-class producers, bringing the best of all worlds into one project. Reaching producer status should provide a valuation bump, especially since it's a low cost, in situ recovery (ISR) operation in the U.S. Given that the U.S. requires about 50 Mlb of uranium and only produces 5 Mlb domestically, any incremental production in the U.S. should be valued at a premium in light of domestic security-of-supply considerations. Ur Energy is a very attractive company.

Another U.S. producer we're following is Uranium Energy Corp. (UEC:NYSE.MKT). Although we do not cover it, we do note that it is a low-cost ISR producer in Texas and believe that it should deserve a premium pricing for the same reasons as Ur-Energy.

We also cover Energy Fuels Inc. (EFR:TSX; EFRFF:OTCQX), which is the second largest producer of uranium in the U.S. and probably has the best story leveraged to the uranium price. It currently produces only about 1 Mlb/year, by design, with several mines that can be turned on relatively quickly. We estimate that it could quickly turn on anywhere between 2–5 Mlb more in annual production once prices get to attractive levels. On top of that, it also has the White Mesa mill that it acquired from Denison, located in Blanding, Utah, which is the only conventional mill in the U.S. Having mill access is extremely important because you effectively cannot produce your final product without it. Energy Fuels has a monopoly position with a conventional mill and it can even make money by processing material on a toll basis for other producers. We believe that this is a very attractive company for those who believe that the uranium price will head higher.

Moving further down the chain, we like the 50/50 Fission Uranium Corp. (FCU:TSX.V) and Alpha Minerals Inc. (AMW:TSX.V) joint venture of Patterson Lake South in the southwest corner of the Athabasca Basin. This is probably the most exciting story in the uranium space right now, in terms of news flow and stock price movements. Even though it doesn't have a resource yet and it's less than a year old because the initial discovery was in November, the drill results that have been produced to date point to a potentially world-class project. There are currently four zones identified. Based on drilling results and our analysis of the assays to date, our back-of-the-envelope calculation estimates about 50 Mlb at that project already, with significant upside potential. So we're very excited about seeing the development of this likely world-class project.

Recently, Fission Uranium and Alpha Minerals announced an LOI by which Fission will acquire Alpha for 5.725 shares of Fission for 1 share of Alpha ($7.67 per share of Alpha). We believe this is an excellent outcome for shareholders of both companies as it unlocks the potential for the acquisition of Patterson Lake South by either Cameco or Denison now that the ownership structure has been cleaned up. In addition, shareholders of each company will receive shares in spincos for the respective companies. This will unlock the value of the portfolio of assets Fission and Alpha are currently holding, which the market is assigning zero value to currently.

TER: What else are you looking at and liking?

RC: We like Kivalliq Energy Corp. (KIV:TSX.V), located in Nunavut. It has the highest grade deposit outside the Athabasca Basin and an impressive land package with several highly prospective conductors. We've visited the property twice now and have been impressed with the area potential, although Nunavut does present some infrastructure challenges. It will probably need a large resource to be economic; however, we do believe that it does have that potential. The management team has been very cost-effective in identifying resources, which is very impressive. We believe Kivalliq is a very good value play for someone looking a little longer term.

Another notable company is U3O8 Corp. (UWE:TSX; UWEFF:OTCQX), a consolidator of South American uranium assets. It has some interesting developments in Argentina and seems to be getting things in place with the potential for a low-cost, low-grade, open pit operation. Its flagship Berlin project is located in Colombia and has the potential to be of decent size with decent grades as well. Its other asset is in Guyana, giving it three decent assets that all have the potential of being developed, once prices get better. We continue to monitor the progress of U3O8 Corp.

Circling back to Patterson Lake South, one company that catches our attention, although it's a little too early to say much about it other than we do like where it sits, is NexGen Energy Ltd. (NXE:TSX.V). NexGen sits northeast of the Fission/Alpha Patterson Lake South project, and we believe that it probably has the best prospects for hosting similar, if not the same mineralization, that Fission and Alpha are currently drilling.

Of all the plays in that area, we're particularly interested in NexGen's property as well Azincourt Uranium Inc. (AAZ:TSX.V), which is a little to the north of the Patterson Lake South project, as it may host a parallel structure. So both of those seem interesting to us, though a little more speculative.

TER: What strategy do you think investors should be using at this point to try to get maximum return in the uranium space?

RC: The first movers will always be the larger companies, so investments in Cameco, Uranium Participation Corp. and Denison will probably be the most obvious and first to move. Those who are looking for a little more upside torque with a little more volatility would certainly be interested in seeing the Fission/Alpha story given that it has excellent drill results. Those looking for something in between could look to Ur-Energy or Energy Fuels, given that they're both producers. They have slightly higher costs and should see a meaningful increase in their share prices once uranium prices go higher.

TER: We appreciate your time and thoughts today, Rob.

RC: Thanks again.

[Tommy]

Why Uranium Could Go To $200 And Beyond

http://seekingalpha.com/article/391711-why-uranium-could-go-to-200-and-beyond?source=email_rt_mc_focus_0

Feb 24 2012, 17:13 | 32 comments | about: URA, includes: CCJ
BOOKMARK / READ LATER

Disclosure: I am long CCJ.

As I noted in my previous article entitled, "6 Ideas for Where the Next Bubble Will Be," I believe uranium prices are ripe to go much higher. There is an imminent supply demand imbalance due to the coming end of the Megatons to Megawatts program, as well as an abundance of new nuclear reactors set to come on board over the next 15 years, that I think will drive this market.

So the question: How high can uranium prices go? In that regard, I think it helps to first observe historical prices. See the chart below.

I think a re-test of previous all-time highs - more than double current uranium prices - is likely. The fundamental factors (i.e. supply/demand imbalance) are even stronger now, and central bank monetary policy is even more inflationary which will likely make markets as a whole more volatile and more prone to bubbles. Because I expect uranium prices to more double, I expect the same - even more so - for most uranium mining companies. Purchasing Cameco (CCJ), the largest North American uranium miner, or the uranium ETF (URA) are easy ways to play this.

I would expect profit-taking at $137 and selling from those who bought at the top of the last bubble and are eager to get out at breakeven. But I think the odds are still high that uranium will remain above $100. There is still immense demand, and even at $100 and beyond, nuclear is economically viable due to two enabling technologies: Breeder reactors and seaweed extraction.

1. Breeder Reactors. Increasing usage of and improvement of breeder reactors (pdf) have the ability to recycle uranium - and thus increase the economic value of each pound of uranium - in the creation of nuclear power. Breeder reactors are still a technology that needs further development and a more robust supporting industry of manufacturers and service providers. However, as the price of uranium rises, the economic imperative to utilize breeder reactors grows. Because of their ability to recycle fuel, breeder reactors make uranium at $200 economically viable.

2. Seaweed Extraction. Even without breeder reactors, there is a nearly infinite supply of uranium in the ocean. Indeed, it has been argued that uranium is actually a renewable resource. From this perspective there is no possible uranium shortage and no need even to employ uranium recycling/nuclear reprocessing (although there will still be economic advantages to doing so). Extracting uranium from the sea is going to require uranium prices be greater than $100 to be economically viable. So, when uranium extraction from the sea is coupled with breeder reactors, the possibility exists for uranium prices to go beyond $100 - and stay there.

Don't Forget About Time

Thus far we've outlined the case for how uranium can re-test its old highs, more than twice where we are now, and stay in that area. However, this fails to consider one big factor: Time. Namely, the ecosystem for breeder reactors and seaweed extraction is not in place, and given how regulated the uranium market is and how slowly nuclear progress occurs, this is not something I suspect will emerge overnight. As such, we are left with only ISR mining and conventional open pit mining to find uranium that will be used only once in many current reactors.

Until seaweed and breeder reactors get more developed, uranium prices could go much, much higher. As such, it seems to me there is a possibility of there being a multi-year period where seaweed extraction and breeder technologies are still in their infancy while demand for uranium as nuclear fuel is growing. I think this may be slightly comparable with the current situation in oil, in which peak oil is contributing to much higher gas prices and the emergent replacement technology - electric vehicles - are still too young to be viable on a widespread basis. From this perspective, I think there is an opportunity for uranium to go beyond $200, perhaps much higher, before settling down as nuclear re-processing via breeder reactors and acquiring uranium via seaweed extraction become sufficiently mature.

Spoilers

While I'm obviously very bullish on uranium, there are three potential spoilers to the scenario I've outlined above that I have on my radar:

1. End of Carbon Hype. While I favor uranium for its unrivaled energy density - which translates into superior cost and scalability performance - it is currently favored by governments for its lack of emissions and its ability to provide baseload energy. For me, the science on carbon emissions leaves much to be desired, and I'm not sure the problem is as big as it is made out to be or if the financial industry simply wishes to have a carbon tax and a market for trading carbon that they can gamble on and profit accordingly. If carbon emissions go out of vogue, uranium and nuclear power could lose demand - regardless of its merits.

2. Pseudo-Environmentalists Victory. It's no secret that nuclear power is despised in many circles because of its alleged environmental flaws. I don't share this view, and in fact I think nuclear is the one of the most environmentally friendly solutions for a world with 7 billion-plus people. An essay by energy journalist Robert Bryce entitled, "Get Dense" is worth reading for a deeper look at how density is the key principle for sustainability in a world with a massive population. However, regardless of what I think or the supposed environmental merits of energy density, the anti-nuclear activists are a prolific group that have scored victories in the past. If another nuclear accident happens, regardless of what its true causes are or even if it does not cause much damage but gets media hype, the potential exists for the nuclear industry to take a big hit and for uranium demand to evaporate rather quickly. I don't consider this likely, but in the interests of being alert, I think it is worth considering.

3. Other Energy Solutions. What if new drilling technologies lead to massive oil discoveries? How far can geothermal take us? Is free energy real, or just a fantasy? At this point, as far as I can see, nuclear is in the best position to displace fossil fuels and solve the energy/environmental crisis. It has both the scientific merits and an industry already in place that is growing. But if the price of uranium gets out of hand and breeder reactors are not sufficiently developed, the incentive for alternatives will grow. At the very least, potential substitutes are worth keeping an eye out for.

Conclusion: based on the current situation, I'll look to do a good bit of selling when price reaches $137, buy back after the sell-off, and then hold on for the market to truly overshoot itself - which I think could be by quite a bit, depending on what else is going on in the world and how the energy picture evolves as time progresses. For the patient investor, the opportunity in uranium is one I think could be life-changing.

[Pro-Life]

Despite Japan’s Radioactive Leak, Uranium Outlook Still Good
Thursday August 22, 2013, 4:30am PDT
By Vivien Diniz - Exclusive to Uranium Investing News

http://uraniuminvestingnews.com/15682/japans-radioactive-leak-uranium-outlook-still-good.html

News that toxic leaks out of Japan’s Fukushima Daiichi nuclear plant are still going strong are raising concerns about the status of Japan’s nuclear future. Japan’s nuclear watchdog reported on Wednesday that the severity of the toxic water leak at Japan’s damaged power plant has reached a rating of level three, the highest that it has been in over two years.

Tokyo Electric Power Co. (TEPCO) has come forward with the fact that 300 and 600 tons of water that cools the Fukushima reactors is draining into the Pacific Ocean every day. The discovery has led the watchdog to the decision to build a 1.4-km underground wall of frozen soil around the perimeter surrounding buildings 1 through 4. Engineers working on the project anticipate it to cost somewhere between $300 million and $410 million.

This would not be the first time that ice was used in mining. Cameco (TSX:CCO, NYSE:CCJ) used the technique at Cigar Lake. However, in the case of Fukushima, it would be the world’s largest ice wall.

The containment system proposed for the Japanese plant does not come without its skeptics. Engineering.com reported that Chief Cabinet Secretary Yoshihide Suga voiced his concerns relating to the wall saying, “There is no precedent in the world to create a water-shielding wall with frozen soil on such a large scale (as planned now at the Fukushima complex). To build that, I think the state has to move a step further to support its realization.”

Despite naysayers, Japanese work crews are moving forward with the wall. The expectation is that the wall won’t be completed until 2015, Bloomberg reported.

What about uranium miners?

In an interview with Reuters, Vanessa Guthrie, managing director of Australia’s Toro Energy Ltd (ASX:TOE), was firm in her belief that despite the the concerns raised by Japan’s radiation leaks, the overall expansion of the uranium industry won’t be dissuaded.

Nuclear plants are still being commissioned which means that, when long-term supply projections are taken into consideration, the supply picture still comes up short.

“I don’t believe that this will delay or defer ongoing developments of the nuclear industry,” Guthrie told Reuters. “For example, it will certainly not cause the Chinese to stop building new plants.”

According to the World Nuclear Association, China, now with 15 operating reactors on the mainland, is is well into the next phase of its nuclear power program. Some 26 reactors are under construction and additional reactors are planned, the association says, resulting in a four-fold increase in nuclear capacity by 2020.

With the end of the U.S.-Russia Megatons to Megawatts Program, Guthrie sees a tightening of uranium supplies once the 24 million pounds of secondary uranium is removed.

What’s in a spot price?

In light of all the bad news in the uranium industry, August spot prices are down at $35 per pound of U3O8. But Will Smith, senior portfolio manager at New City Investment Managers, is recommending that investors focus on what is going on with strategic players and not the spot price.

Smith says investors should direct their attention to activities such as those of a state-owned Chinese nuclear group which has absolved Namibia-focused uranium miner Kalahari Minerals (LSE:KAH). Furthermore, Cameco has been busy acquiring assets from more diversified miners.

Smith says that these transactions are indicative that bulls are pulling confidence from uranium’s supply and demand dynamics.

[Tommy]

$URZ - Uranerz Nearing Production

http://seekingalpha.com/article/1667662-uranerz-nearing-production?source=email_macro_view&ifp=0
The Company

Uranerz (URZ) is a near-term uranium producer currently building a mine in Wyoming with first production scheduled for late this year.

The Summary

Our concerns about Uranerz and its abilities to reach production without further shareholder dilution were confirmed a few days ago. The company announced a bought deal worth $10M in funds. In response the share price dropped 11% to $1.12 reflecting the associated dilution of the share registry. Even with these additional funds in the bank the company will struggle to reach production without going back to the market unless it receives funds from the Wyoming state government it has applied for. Turning production into free cash flow will be difficult unless uranium prices rise from current levels.

The Project

Uranerz is building a uranium mine in the Powder River Basin in Wyoming. The project is called Nichols Ranch and is fully permitted to produce a maximum of 2M lbs of yellowcake. Uranerz will be using in-situ recovery, or ISR, which is a comparatively inconspicuous method of mining uranium. Modern ISR involves the circulation of water, fortified with oxidation agents, through a uranium ore body. The fortified water is pumped into injection wells and through the uranium ore body. Uranium is oxidized and solubilized and pumped back to the surface through extraction wells. This liquid is transferred to an ion exchange unit for uranium removal.

(click to enlarge)

(photo from here)

The Nichols Ranch project is situated in a region exceptionally prospective for uranium. Industry leaders such as Cameco (CCJ) and Uranium One (SXRZF.PK) have producing mines in adjacent land holdings. Uranerz management is experienced in applying ISR to uranium deposits.

The total resource is comprised of 5 deposits scattered across a 20km by 20km region. Production will start at the Nichols Ranch deposit which hosts an indicated resource of close to 3M lbs of uranium. The Jane Dough deposit is of a similar size and could be connected with a pipeline to the processing facility at Nichols Ranch. There are three other deposits hosting additional 12M lbs in uranium resources at a greater distance from the facility. Uranerz is targeting initial production of 600,000 to 800,000 lbs per year.

A PEA was published in 2008 indicating direct operating costs of $35/lb including royalties and taxes. Considering inflation and also the current uranium spot price it will be difficult to achieve free cash flow. Not all production will be sold at spot price due to two off-take agreements which will pay above that level. However, even industry giant Cameco realized a price of only $46.30/lb uranium in the second quarter this year when the average spot price registered as $40.18/lb. As indicated by the chart below the uranium spot price has since dropped again to $35/lb.

Construction of the ISR facility is nearing completion. Uranerz has completed drilling the first of two deep disposal wells which are required to be operational prior to commencement of uranium recovery operations. The second well should be finalized sometimes in fall.

Uranerz has a toll processing agreement with Cameco whereby Uranerz will deliver loaded resin to Cameco's Smith Ranch facility and have it refined into Yellowcake there. This arrangement reduces execution risk and initial capex and it should also lower production costs especially during ramping up.

(click to enlarge)

(Nichols Ranch well field. photo taken from company website)

Uranium Outlook

Numerous commentators have been making a bullish case for uranium. Arguments typically include:

The termination of the Heu agreement which regulates the conversion of nuclear warheads into nuclear fuel
The anticipated restart of nuclear power generation in Japan.
The shelfing or down-scaling of new mines due to the low price environment.
Plans for the construction of many new nuclear power stations in India, China and other developing nations.

We remain skeptical with regards to the immediate impact of these factors on the uranium price. They have been touted for a long time now, but the uranium spot price has only known one trend ever since the Fukushima disaster. Whether or not the rebound will happen in time for Uranerz to reap the benefits of its new operation without having to raise more money at a depressed share price again remains to be seen.

(click to enlarge)

Stock & Financial Information

Including the new shares to be issued in the course of the mentioned bought deal there will soon be close to 86M Uranerz shares outstanding. The market capitalization is currently listed as $85M and does not include these new shares which have already been priced into the share price following the announcement. Five analysts are covering the company providing a median price target of $2.50 which compares favorably with the current share price of $1.10. Insiders are holding 13.6% and institutions are holding 16.6%. (Data as provided by Yahoo.com).

The company has been living hand-to-mouth for a while awaiting funds from an industrial bond program offered by local Wyoming authorities. In late 2012 Uranerz submitted an application to the Wyoming Business Council for a $20,000,000 loan. The company has received favorable reviews and approval of the loan was recommended by the WBC to state officials in March. State officials have confirmed their support for the application in May but no money has been released so far. The company entered into a $6M short-term loan agreement in June and has now announced the mentioned $10M bought deal. These financings will give the company some breathing space and should be sufficient to tide Uranerz over to finally receiving funds from the industrial bond program.

Conclusion

Uranerz is nearing first production at the Nichols Ranch ISR facility. Provided the company finally receives funding from the industrial bond program the project should be financed to first production and beyond. Achieving free cash flow from production is dependent on successfully ramping up production to the targeted initial production rate of 600,000 to 800,000 lbs per year and most importantly, the long overdue recovery of uranium prices.

An investment in Uranerz is certainly speculative at this stage. Companies are typically very vulnerable at the point where Uranerz is finding itself right now. Further delays in receiving funding from the industrial bond program, or delays and problems in ramping up the facility are very real concerns. On the other hand, if the company is able to execute its path to production without too many hick-ups it should reward investors handsomely.

Given the company's ties with Cameco and its geographical vicinity to Cameco's operations a takeover by this major uranium producer is certainly a real possibility.

[Pro-Life]

The Bottom is Here: Uranium Spot Price Slumps While Miners Outperform
Thursday August 8, 2013, 3:53pm PDT
By Melissa Pistilli - Exclusive to Uranium Investing News

http://uraniuminvestingnews.com

[Pro-Life]

Good article, btw... Thanks!

[Tommy]

Top Ten Stocks for a Uranium Price Rebound: David Talbot

CCO; CCJ, DML; DNN, EFR; EFRFF, FCU, PDN, STM; STHJF, URE; URG, URZ, UEC, UUU, U

Source: Zig Lambo of The Energy Report (8/1/13)

http://www.theenergyreport.com/pub/na/15491?utm_source=delivra&utm_medium=email&utm_campaign=TER+FINAL+streetwise-reports+08%2F01%2F2013+14%3A42%3A10

David Talbot When it comes to uranium market sentiment, "it's all about Japan," says David Talbot, senior mining analyst at Dundee Capital Markets. With restart applications trickling in and reactor construction underway throughout the world, a turnaround looks less like an "if" and more like a "when." In the meantime, Talbot sees many investors sitting on the sidelines. In this interview with The Energy Report, Talbot discusses the catalysts that could trigger the next uranium boom and the companies that could make investors wish they had arrived at the party a little earlier.

Companies Mentioned: Cameco Corp. : Denison Mines Corp. : Energy Fuels Inc. : Fission Uranium Corp. : Paladin Energy Ltd. : Strathmore Minerals Corp. : Ur-Energy Inc. : Uranerz Energy Corp. : Uranium Energy Corp. : Uranium One Inc. : Uranium Participation Corp.
Related Companies

: DNI Metals Inc.
: Midland Exploration Inc.

The Energy Report: In your last interview with The Energy Report in December, you were expecting that 2013 would be the turnaround year for uranium. What's your assessment of where things stand now?

David Talbot: Our long-term outlook remains essentially the same as last year. What we and most of the industry underestimated was the possible impact of cash-strapped sellers on the spot market. Despite recent spot market weakness, uranium producer equities have pushed ahead 10%, developers 12% and explorers 17%, on average. A uranium supply crisis is still brewing and the fundamentals do remain strong. Demand is stable and reasonably predictable. The weak spot price still threatens future mine supply with more closures, cancellations and deferrals of mining projects. The all-important catalyst at the end of this year is the end of the Russia-U.S. HEU "Megatons to Megawatts" program, which in our view will not be renewed. That means 24 million pounds (24 Mlb) of secondary supply comes offline with no replacement - equivalent to the entire production of Cameco Corp. (CCO:TSX; CCJ:NYSE). Uranium prices are too low to incentivize new builds right now. We think prices must rise, as will the equities. The Uranium One Inc. (UUU:TSX) takeout deal approved in March indicates Russia wanted to lock down a reliable uranium source. Guangdong's (CGNPC) purchase of Extract Resources Ltd. is the preeminent takeover after Uranium One. As these utilities purchase these big projects it leaves less supply on the table for the rest of the utilities.

TER: The big price drop in early July sent uranium down to a seven-year low. What happened there? Was this the bottom or is there more to come?

DT: Uranium prices have dropped significantly in the past month or so. A few weeks ago, near-term requirements appeared low and the first applications for Japanese reactor restarts were not yet filed. Restrictions were also removed from the U.S. Department of Energy regarding how much uranium it's allowed to sell in any given year. That added to the already negative sentiment.

The following week, a few suppliers failed to sell to a certain utility and were forced to place that material on the market relatively cheaply. That led to the spot price retreating even more. More positive news coming out of Japan on restarts should help the price edge back up. But during the summer lull, negative sentiment could still dominate, and prices could drop further.

TER: What catalysts might cause a significant uptrend in prices going to this predicted $70+ per pound ($70+/lb) level?

DT: It's all about Japan. Japanese restarts should provide a psychological boost. Fukushima really ended the last uranium bull run and reactor restarts will likely get that going once again. Once Japan moves forward, the rest of the world will start to catch up on the uranium purchases they've been deferring.

Investors are likely to return at that point. Utilities will also have to return to term contracting as they do have significant unmet uranium requirements over the next four or five years. There are more reactors planned or proposed now than ever before, and we are seeing contract awards for construction of reactors, like in Turkey for example, and the UK reaffirmed its commitment to nuclear only a few months ago. We continue to forecast a supply/demand deficit by the end of 2014. By 2020, we expect about 240 Mlb of demand to be offset by only ~200 Mlb of total supply, including secondary supplies.

TER: The U.S. imports about 90% of its uranium, yet we still have significant recoverable deposits. What do things look like for domestic production?

DT: Things are moving forward on the permitting front in the U.S., which remains the largest uranium consumer in the world with the largest reactor fleet. It produced only about 4.1 Mlb last year, which was about a 4% increase from the prior year. We'd expect that number to increase to perhaps 4.5–5 Mlb this year. Cameco is by far the largest producer in the country and plans to increase production at both its Smith Ranch-Highland plant in Wyoming and its Crow Butte plant in Nebraska. We expect combined production to improve from 1.9 Mlb last year to about 2.6 Mlb this year. That should offset some production losses from, say, Uranium One, which decided not to develop any more well fields at its Willow Creek in-situ recovery (ISR) project in Wyoming.

We're also expecting increased production from Uranium Energy Corp. (UEC:NYSE.MKT) from its Palangana operation in south Texas. We're expecting initial production out of Ur-Energy Inc.'s (URE:TSX; URG:NYSE.MKT) Lost Creek mine in Wyoming. The U.S. still imports about 90% of its 55 Mlb per year consumption. Producers such as Ur-Energy and Uranerz Energy Corp. (URZ:TSX; URZ:NYSE.MKT) have had some preferential contracts in the past. For example, we believe that Ur-Energy's contracts with utilities are in the $60/lb or greater range. That's a pretty good premium to existing spot prices. Energy Fuels Inc. (EFR:TSX; EFRFF:OTCQX) sold its uranium last quarter for an average price of $56.23/lb when the average spot price for the period was in the low $40s.

TER: Energy Fuels is the largest U.S. conventional uranium producer, yet its market cap is only $130 million ($130M). What's going on there?

DT: Energy Fuels has huge leverage to uranium prices and is one of our top picks in a rising uranium price environment. It has high price contracts, an effective and acquisitive management team and huge expansion potential. The company has really been focused on running only its lower-cost operations while delivering about 100% of its production into these higher-priced term contracts.

This stock is still relatively unknown, but these guys have the potential to go from around 1 Mlb this year to 3–5 Mlb going forward. It recently announced an acquisition of Strathmore Minerals Corp. (STM:TSX; STHJF:OTCQX) in an all-share deal worth about $30M. Shareholders could benefit with a stronger company, lower-cost project pipeline and relationships with a couple of Asian utilities with deep pockets, KEPCO and Sumitomo. Strathmore's flagship Roca Honda project in New Mexico has some synergies that can really work with Energy Fuels. The acquisition eliminates Strathmore's need to build a mill, potentially making the Roca Honda project much more economic. We definitely see Energy Fuels as an up-and-comer in a rising uranium price environment.

TER: So where is it trading now and what's your target price?

DT: The stock right now is trading at $0.18 and our target price is a cool $0.75.

TER: You've been out on some site visits. Tell us a little about what you've seen.

DT: I enjoy site visits and have been to about 80 different uranium projects around the world. I went back to Wyoming in July and saw three ISR mines, Ur-Energy's Lost Creek, Uranerz's Nichols Ranch and Cameco's Smith Highland Ranch operations. Ur-Energy is the best performer this year out of the developers. It's up 70% over the past few months. We were very impressed with the innovative design of the Lost Creek plant and feel very comfortable with the expertise, depth and competence of the company's team.

The Nuclear Regulatory Commission pre-operation inspections are underway at Lost Creek and we expect production by August with first deliveries in October. We're looking for about 200,000 pounds (200 Klb) of production this year. Maybe 800–900 Klb next year with production costs under $25/lb. The Pathfinder acquisition brings two high-quality assets, primarily the Shirley Basin, which is the next project to be developed. There's a little bit of financing risk remaining, but we expect that to be largely sorted out. We maintain our buy on Ur-Energy and target price of $2.30 per share from the current $1.29 level.

TER: How about Uranerz?

DT: Uranerz runs a bit different model, permitting smaller deposits and only constructing the frontend of the plant. It plans to toll process its resin at Cameco's Smith Ranch facility where Cameco will take that loaded resin, precipitate the uranium, dry and package it. This arrangement benefits Uranerz by minimizing start up risks and saving capital through deferred completion of its own mill, and may even save on operating costs. Uranerz just started construction of two deep disposal wells at about $3M each; it will need these wells before production can start. We expect about 500 Klb of production next year with total cash costs of around $37/lb—somewhat higher than Ur-Energy's costs due to higher taxes and royalties in Wyoming. Uranerz is now trading at $1.35 and we maintain a buy rating and a $2.65 target price.

We also visited Cameco's Smith Highland Ranch ISR operation, which has been in production for over 16 years. Cameco's U.S.-based operations have been core long life, low-cost projects for years. About 12% of Cameco's production comes from the U.S., accounting for half of total U.S. production. About 18% of our NAV comes from its U.S. operations. We're expecting increased production this year out of North Butte and see Cameco moving forward with the 15 Mlb Reynolds project, which is likely going to be permitted around yearend. We've got a buy on Cameco and target price of $25.20.

TER: Why did you only start covering Cameco now?

DT: With well over 20 analysts covering Cameco, I felt my value was better added covering earlier-stage development and exploration stories. I initiated coverage on Cameco in June as a clear defensive play in today's uncertain uranium environment. It's an industry leader with world-class assets. Cameco rarely misses its guidance and looks poised to continue the strong track record despite low uranium prices. The big catalyst this year is the commissioning of the Cigar Lake project, expected any day now. We're forecasting 23.4 Mlb of production this year, 25.4 next year and just under 36 Mlb by 2018. Cameco is where the big money is going in the sector.

Despite our belief that producers are where investors should be going right now, we do want to highlight two exploration companies, Fission Uranium Corp. (FCU:TSX.V) and Denison Mines Corp. (DML:TSX; DNN:NYSE.MKT). Both are exploring some exciting high-grade projects in the Athabasca Basin. Very few companies in the sector are receiving as much attention as these two names. We have Fission Uranium as a buy, speculative risk, no target. Fission owns 50% of the highly perspective and the much-talked-about PLS discovery in the Athabasca Basin. This has propelled the stock and also reignited interest in the whole sector. PLS is high grade, shallow, consistent and thick. The team's already discovered three zones here, with indications that more discoveries are likely. There are already about 30 Mlb discovered in these three zones with 75 Mlb or more possible. Fission's very first hole this summer intersected mineralization over 85 meters (85m). Perhaps the market has priced in the uranium that's already been found, but we don't think it accounts for the vast upside potential.

Fission has a very skilled technical team that already succeeded in discovering the J Zone and selling it to Denison. This team discovered the original Boulder Field on PLS with its patent pending airborne radiometric survey technology, and now it's further expanding the PLS discovery. Fission's entrepreneurial management team has significant ownership and is definitely aligned with shareholder interests. This is an exciting story that's only going to improve with the 44-drillhole program currently underway.

Denison Mines is another investor favorite that trades very well. We rate Denison as a buy with a $2.00 target price. The company has majority ownership in the world's third-highest-grade deposit, Phoenix, that already has 60 Mlb of uranium at 16.6% U308. We easily see 20–30 Mlb upside from here. The latest drill hole announced about two weeks back turned out to be the best hole ever on the property, 43% over 10m. A significant part of our NAV for Denison comes from a strategic value of its 22.5% ownership in the McClean Lake Mill. Its world-class mill is one of just three mills in the Athabasca Basin, and the only one capable of processing ultra high-grade ores. It represents near-term cash flow potential. Denison holds another large deposit called Midwest and a plethora of other exploration projects. This company is an attractive entry point for investors who want exposure to the basin. Between the takeover potential and the ultra high-grade Phoenix deposit, we clearly see investors supporting its premium valuation relative to its peers.

TER: Any others you'd like to mention?

DT: We like Paladin Energy Ltd. (PDN:TSX; PDN:ASX) and rate it as a buy with a $2.40 target price. Paladin has really delivered this year. Production and sales targets were met with realized prices 13% above spot. Cost-cutting targets at both operations exceeded expectations. Operations achieved capacity. Debt was trimmed. Production guidance was increased for next year and we believe a potential game-changing strategic initiative lies waiting in the wings. Paladin has huge leverage to rising uranium prices with costs that are coming down rapidly. We do expect a strategic partnership to be announced likely later this quarter. We believe that Paladin might be willing to sell about 20% of its Langer Heinrich mine in Namibia. Our NAV valuation suggests perhaps a $200–300M price tag for that. The company has a disciplined expansion approach here. We think right now is the time for investors to take advantage of the turnaround in Paladin. The stock still trades at a discount to its peers. With this strategic alliance, we do expect a rerating in the stock as debt levels fall further.

Finally, we like Uranium Participation Corp. (U:TSX) as a buy, high risk, with a $7.50 target price. Uranium Participation is essentially a uranium ETF holding 13.4 Mlb of physical uranium and therefore its easy to calculate an NAV for the stock. We estimate its NAV right now at $4.81 per share at $34.50/lb uranium. We view Uranium Participation as a proxy for sentiment from the sector and a low-risk investment vehicle for those who seek pure uranium price exposure with no operational permitting or geopolitical risk. We suggest getting in this name before uranium prices rally further.

TER: So what does the future look like for uranium and what should investors be doing to hopefully benefit and make some money here?

DT: Once we get through the summer doldrums and get some visibility on the Japanese nuclear power restarts, we expect uranium prices to firm and rise toward the end of this year and into next year. We are still calling for $65/lb uranium in the long term. To get to those levels, investors will need to see higher prices as incentives before any large uranium mines are built. Based on history, there's a chance that once uranium prices do start to rebound, stock prices could jump quickly. It's our expectation that many investors will sit on the sidelines, skip some of these early gains and likely come into the sector once it's clear what direction it's headed in. In the meantime, we suggest that investors look to the producers, especially those companies that are larger and more liquid. They should also look at select exploration companies, such as Fission Uranium or Denison Mines. All eyes are on those companies right now and their exploration programs are in full swing and expected to deliver significant news flow throughout the summer.

TER: Thanks for your thoughts today, David.

DT: Thank you for having me.

Dundee Capital Markets Senior Mining Analyst David Talbot worked for nine years as a geologist in the gold exploration industry in Northern Ontario. David joined Dundee's research department in May 2003, and in the summer of 2007, he took over the role of analyzing the fast-growing uranium sector. David is a member of the PDAC, the Society of Economic Geologists and graduated with distinction from the University of Western Ontario, with an Honors Bachelor of Science degree in geology.

Want to read more Energy Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Interviews page.

DISCLOSURE:
1) Zig Lambo conducted this interview for The Energy Report and provides services to The Energy Report as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of The Energy Report: Fission Uranium Corp., Energy Fuels Inc., Strathmore Minerals Corp. and Uranerz Energy Corp. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.
3)David Talbot: I or my family own shares of the following companies mentioned in this interview: None. I personally am or my family is paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
4) Dundee Capital Markets and its affiliates, in the aggregate, beneficially own 1% or more of a class of equity securities mentioned in this interview: Energy Fuels Inc.
5) Dundee Capital Markets has provided investment banking services to companies mentioned in this interview in the past 12 months: Denison Mines Corp., Energy Fuels Inc., and Fission Uranium Corp.
6) All disclosures and disclaimers are available on the Internet at www.dundeecapitalmarkets.com. Please refer to formal published research reports for all disclosures and disclaimers pertaining to companies under coverage and Dundee Capital Markets. The policy of Dundee Capital Markets with respect to Research reports is available on the Internet at www.dundeecapitalmarkets.com.
7) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts' statements without their consent.
8) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer.
9) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise.

Related Articles

2013 Should Be the Turnaround Year for Uranium: David Talbot
Jocelyn August: Top Five Catalysts for Small-Cap Energy Equities
Capture Upside in Undervalued, Underfollowed Energy Stocks: Peter Epstei

[TheFinalCD]

USU $29

[Tommy]

Could Small Modular Reactors Goose Uranium Prices?

http://www.theenergyreport.com/pub/na/15467?utm_source=delivra&utm_medium=email&utm_campaign=TER+FINAL+streetwise-reports+07%2F23%2F2013+14%3A32%3A53

TICKERS: AMW, AREVA, UAX; ATURF, BWC, CCO; CCJ, DML; DNN, EFR; EFRFF, EUU; TGP; EUUNF, FCU, FLR, KRN, LK, PP, PPI; PPRTF, GEM, POT, SO, STM; STHJF, URE; URG, URZ, UEC, UUU, WPX, ZC

Source: Tom Armistead of The Energy Report (7/23/13)

Jeb Handwerger Nuclear power is the best option for clean base-load power generation, according to Gold Stock Trades Editor Jeb Handwerger. As proof, he points to signs that even environmentalists are beginning to favor it. Meanwhile, uranium stocks are rising and large nuclear construction programs overseas should keep upward pressure on them. But as Handwerger explains in this interview with The Energy Report, the future of nuclear power generation may lie with small modular reactors, and the U.S. is leading their development.

Companies Mentioned: Alpha Minerals Inc. : AREVA SA : Athabasca Uranium Inc. : Babcock & Wilcox Co. : Cameco Corp. : Denison Mines Corp. : Energy Fuels Inc. : European Uranium Resources Ltd. : Fission Uranium Corp. : Fluor Corp. : Karnalyte Resources Inc. : Lakeland Resources Inc. : Pacific Potash Corp. : Passport Potash Inc. : Pele Mountain Resources Inc. : PotashCorp. : Southern Co. : Strathmore Minerals Corp. : Ur-Energy Inc. : Uranerz Energy Corp. : Uranium Energy Corp. : Uranium One Inc. : Western Potash Corp. : Zimtu Capital Corp.
Related Companies

: DNI Metals Inc.
: Midland Exploration Inc.

The Energy Report: Jeb, natural gas prices have become soft again after reaching $4.25 per million Btu ($4.25/MMBtu) last spring. They're now back at $3.70/MMBtu. What gives you confidence that nuclear power will continue to have a competitive edge over gas for power generation?

Jeb Handwerger: Natural gas has backed off its highs a bit, but it's still much higher than its low of $2/MMBtu. Oil and natural gas have made strong upward moves since 2012. Oil is above $107 per barrel. Uranium is still cheap; it's at multiyear lows. An uptick in accumulation of the cheaper uranium from large utilities could be the catalyst for a major repricing higher. The price of uranium historically tracks oil, and right now it is an opportunity for utilities and investors to buy cleaner and cheaper uranium. At the end of the day, with nuclear specifically, a shift is occurring even among staunch environmentalists. Japan and Germany initially moved away from nuclear, but now they're coming back because they're realizing, as the environmentalists are realizing, that moving away from nuclear causes demand for fossil fuels—coal and natural gas and oil—to rise. Nuclear is the only thing that can stop that rising demand. It's the only major base-load power that's clean.
oil uranium price

Countries that use fossil fuels heavily, especially India and China, are dealing with debilitating air pollution, and nuclear power can play a transformational role, environmentally and economically. Governments around the world, including the U.S., have been discussing policies in air pollution and the climate crisis. I believe that over the next generation, say, 20 years, nuclear will be the source that's going to see exceptional growth because it's able to provide an additional major supply of power and it does not hurt the atmosphere.

Environmentalists are realizing that renewables alone are unable to fill the gap left by halting the use of fossil fuels. This is highlighted most recently in a documentary that won many awards at the Sundance Festival, "Pandora's Promise," which explores the transformation of antinuclear environmentalists into believers in the benefits of nuclear power. Nuclear power is getting investment from countries around the world, and it's attracting the attention of influential people like Bill Gates, who believes in the future of the next-generation nuclear technologies.

TER: Could the focus on clean energy help the push for nuclear power?

JH: Yes, combined with rising oil prices and rising natural gas prices, which we're seeing, this is going to push discussion of energy sources that are cleaner and safer for the environment. Just recently in the news, there was a major accident in Québec with oil being transported by rail. At least 42 people were killed, and five more are missing and presumed dead. There are deaths every year from the fossil fuel industries. There has not been one death from Fukushima. Not only that, but the move away from nuclear in Germany and Japan has caused a major increase in carbon emissions. Nuclear is going to get a lot of support, and the development of the next-generation nuclear technologies that people like Gates are investing in may be an area where investors at this stage could get in on exceptional growth.

TER: Will the increased U.S. demand from planned expansion of reactors by Georgia Power Co., a subsidiary of Southern Co. (SO:NYSE), and others, and proposed development of small modular reactors, make a difference in the global supply and demand picture, or will China, India and Russia play a larger role?

JH: One of the areas where the U.S. for decades has been the leading technological power is in small nuclear reactors. We've used them on our aircraft carriers and on our nuclear submarines safely and efficiently. The U.S. has an advantage in understanding small modular nuclear reactors. One of the companies that we have followed for a long time that's working on that is Babcock & Wilcox Co. (BWC:NYSE). There's also Fluor Corp. (FLR:NYSE), which is working on small modular nuclear reactors. President Obama and the Department of Energy are funding research on the implementation of small modular nuclear reactors.

The reality is that the U.S. is the largest consumer of nuclear energy. Twenty percent of our power comes from nuclear, 55 million pounds a year (55 Mlb/year) of uranium. China only gets about 2% from nuclear. Over the next generation, this could rise exponentially. China is not going to get anywhere close to the U.S. demand of 20%, but uranium demand will increase exponentially, which will require new uranium mines to go into production over the next decade.

If these nuclear plants don't come online in a timely manner, China and India are going to be dealing with worse and worse air pollution. Cities like Beijing are dealing with blackened air. It's a real crisis. They're already setting standards over the next decade to reduce emissions. They're going to need nuclear plants or else there are going to be more and more people dying every year from these air pollutants. Russia's also making a huge push. Rosatom State Atomic Energy Corp. recently became the primary shareholder for Uranium One Inc. (UUU:TSX).

The U.S. Department of Energy also has awarded major grants to foster research for small modular nuclear reactors. This could transform the industry because a major hurdle has always been the immense capital costs in building large nuclear power plants. The small reactors could be a more affordable option in areas that don't need much power or in more remote areas. It could change the limits of what is possible in this sector.

TER: Only three reactors are being built right now in the United States, and some reactors are being retired, so the total number is beginning to slip. What will be the effect if some of those projects in the U.S. now under construction don't come online in the near future?

JH: The U.S. consumes about 55 Mlb/year of uranium and only produces 4 Mlb/year. Even if some of the old reactors are retired, the U.S. is still in a major deficit for uranium supply. There needs to be a supply for next-generation reactors that are safer, securer and more reliable. That's why I've told my subscribers to look at the nuclear services industry. Many of the old plants will need to be either scrapped or updated. Next-generation designs will usher in an area of growth for nuclear manufacturers and power providers.

TER: What are the prospects for uranium mining in the U.S.? What companies could mitigate the U.S. demand for imported uranium?

JH: There are several companies that are in production that we follow in the U.S., such as Cameco Corp. (CCO:TSX; CCJ:NYSE). Cameco produces at the Smith Ranch-Highland in the Powder River Basin. There's Uranium One, also in the Powder River Basin. There's Uranium Energy Corp. (UEC:NYSE.MKT) and there's Energy Fuels Inc. (EFR:TSX; EFRFF:OTCQX), which just acquired Strathmore Minerals Corp. (STM:TSX; STHJF:OTCQX). A few near-term producers are rapidly coming online. Ur-Energy Inc. (URE:TSX; URG:NYSE.MKT) and Uranerz Energy Corp. (URZ:TSX; URZ:NYSE.MKT) are companies we like in Wyoming.

I'm focused on Uranerz right now, as I believe it is undervalued for the strategic land position it has. Uranerz is in the construction phase of its Nichols Ranch project in the Powder River Basin. I like the company because it already has agreements with two major utilities. Uranerz is going to take out its resin and transport it to Smith Ranch-Highland, where Cameco's going to process it. Uranerz has a strategic position between Cameco and Uranium One. And I think that Cameco is going to look to expand in the U.S.

TER: What are Europe's prospects for domestic supply?

JH: Right now, there is one operating mine in the Czech Republic. Europe is the largest per-capita user of nuclear power. The European Union (EU) has 160 nuclear reactors but only one operating mine.

AREVA SA (AREVA:EPA), the nuclear giant from France, gets a lot of its supply from Niger. We saw an example of the political risk in that area when AREVA's mine became the target of a suicide bombing and was shut down. There may be some increased attraction for potential development projects in the EU. The one junior that we know is at the feasibility stage and that has AREVA as a major shareholder is European Uranium Resources Ltd. (EUU:TSX.V; TGP:FSE; EUUNF:OTCQX), which has a memorandum of understanding with the Slovakia government and is advancing the Kuriskova project, which is one of the highest-grade uranium deposits in the world.

TER: What other uranium companies do you like?

JH: The Athabasca Basin has the highest-grade uranium mines in the world. If you're a momentum investor in the resource sector and you want to follow an exciting discovery, you've got to watch the success of the Alpha Minerals Inc. (AMW:TSX.V) and Fission Uranium Corp. (FCU:TSX.V) discovery in the western part of the Athabasca Basin. This is one of the most incredible discoveries in the history of the Athabasca Basin. These are some of the few stocks in major up-trends, while the resource market has been generally weak. We're in a difficult time in the resource sector. These are stocks that have really bullish charts and are consistently putting out great news. It's getting on the radar of a lot of investors. It's creating a whole uranium rush, and other juniors are coming into the west side of the Athabasca Basin, where this discovery was made. I am watching some other smaller exploration plays in the Athabasca Basin with a lot of potential and that may be positioned to piggyback on the Fission-Alpha success, such as Athabasca Uranium Inc. (UAX:TSX.V; ATURF:OTCQX) and Lakeland Resources Inc. (LK:TSX.V).

The uranium price has been flat, around $40 per pound ($40/lb), yet we're beginning to see uranium miners in a significant up-trend. Cameco is up 30% since November 2012. Alpha Minerals is up almost $4/share. When you start seeing capital flowing into the miners, that means people are anticipating a turnaround in the uranium price and uranium demand.
cameco uranium

TER: You predicted a strong rebound for uranium back in your October interview with The Energy Report. Why hasn't that occurred?

JH: We have not seen a rebound in the price of uranium, but we expect that to happen very soon because Japanese utilities just applied to restart 12 reactors. That's huge. We think that Germany is going to move back from the knee-jerk reaction of Chancellor Angela Merkel. Electricity costs are skyrocketing there. We see much more expansion of nuclear in emerging economies.

TER: What uranium miners are looking for acquisitions, and who is or could be for sale?

JH: We're beginning to see more mergers and acquisitions (M&A). We had the Denison Mines Corp. (DML:TSX; DNN:NYSE.MKT)/Fission Energy deal on the J-Zone near the Roughrider deposit last April. You have Energy Fuels and Strathmore. We think that Cameco and the large guys are going to look to build their growth in the U.S., so don't be surprised if Cameco picks up some junior uranium miners that are nearing production, such as Uranerz. Then you have the European situation. European Uranium is really a critical potential supply for the EU. So that company should attract acquirers.

Keep a close eye on Elliot Lake, Ontario, which produced uranium for a generation. Although it is lower grade than the Athabasca Basin, the mines could be economic with rising uranium and rare earth prices. Rio Algom produced uranium and heavy rare earths there back in the 1980s. The mines were shut down when uranium went below $15/lb and rare earths were relatively unknown. Well now it is a completely different story, uranium could hit $90/lb by 2016, according to JP Morgan, and rare earths are growing increasingly in demand for clean energy applications. Watch Pele Mountain Resources Inc. (GEM:TSX.V), which is advancing the Eco-Ridge uranium-rare earth project toward feasibility. Strategic partners may see the benefit of having the rare earths and scandium as a byproduct.

TER: Agriculture benefits from some of the same global growth factors as energy. You've encouraged investors to look for exposure to potash. Where should they look, and why?

JH: Potash is completely off the radar for most investors in the West right now, but investors from the East are really excited about potash. Potash has been hit pretty hard since the global credit crisis and it's been basing for a while, but potash is critical for emerging economies that have rising populations that need better quality food.

Most of the supply is controlled by just a few companies, which control the pricing. The large consumers from the East want to secure their own supply. They realize what a great business potash is, so why not go out and work with some of these junior miners and secure offtake agreements? If demand increases rapidly, the majors may choose not to boost mine output. So the new potash deposits may be really critical to some countries.

We're already seeing some of them making strategic investments. A Chinese fund just invested in two of Zimtu Capital Corp.'s (ZC:TSX.V) major holdings, Western Potash Corp. (WPX:TSX.V) and Pacific Potash Corp. (PP:TSZ.V). We've seen an Indian fund coming into Karnalyte Resources Inc. (KRN:TSX). We're seeing some of the smarter money coming in to invest, and this may be a catalyst to reawaken investors to the undervaluation of these junior developers. Most people don't realize that India spends more on potash and fertilizer every year than it does on national security.

One of the areas that I think that investors should look to for great leverage is Passport Potash Inc. (PPI:TSX.V; PPRTF:OTCQX). Share prices are really undervalued right now. It could be a tenbagger if we have anything similar to the 2010 or 2007 potash rally. We think that it could have a really good rally if it isn't bought out beforehand by Indian or Chinese consumers. Passport recently issued a preliminary economic assessment (PEA) that showed an NPV of over $3.25 billion. It's pretty remarkable, considering the company has a market cap of less than $35 million. Despite this, it's overall a weak market and investors are able to pick up Passport very cheaply.

We expect Passport to meet with end-users and show them that the Holbrook Basin project is economic. Passport has made some great advances recently. It has hired a new chief operating officer who had over 21 years of experience with PotashCorp. (POT:TSX; POT:NYSE). Passport has announced new strategic land holdings. It is making advancements on permitting. This is a company that I think is very undervalued and has great potential.

TER: You mentioned that Chinese investors were looking at Western Potash and Pacific Potash. China and the U.S. have begun working on a proposed bilateral investment treaty. If the Chinese were to invest in the U.S. potash sector as a result of that treaty, how would that affect the potash space?

JH: It could mean better access to capital for junior companies. Capex for potash projects is large. The total U.S. production of potash right now is about 1 million tons per year (1 Mtpa), but the U.S. consumes close to 10 Mtpa, so a lot of that is imported. Companies like Passport and the other names highlighted above could really help alleviate that supply shortfall. With inflation combined with these fundamentals of increasing demand, we think that food prices are going to go higher and potash is a way to hedge against inflation and food price spikes.

TER: What effect would the increased Chinese presence in the market have on stock prices of potash producers?

JH: The biggest key is financially derisking these assets. Investors want to know if companies have enough money to go to the feasibility study stage and into construction. As soon as those questions get answered, it could be a huge catalyst to share prices.

TER: Do you have any final advice for energy investors positioning themselves for the rest of 2013?

JH: We are going into a phase that could be very bullish for energy investors. We are going from an economy that was slowing to one that's expanding. Geopolitical tensions in the Middle East and North Africa and throughout the world could have a significant impact on energy prices. Even though precious-metal prices have been basing, there's been this rotation into energy. This is a time where savvy investors can get into situations at a very cheap price before an inflationary cycle that could see exceptional gains in the commodities and the energy sector.

TER: I appreciate your time.

JH: Thank you.

Jeb Handwerger is a newsletter writer who is syndicated internationally and known throughout the financial industry for his accurate and timely analysis of the equities markets—particularly the precious metals and natural resources sectors. Subscribe to his free newsletter, Gold Stock Trades.

[Tommy]

Japan Election Spurs Uranium Rally

http://uraniuminvestingnews.com/15216/japan-election-spurs-uranium-rally.html?utm_source=Resource+Investing+News&utm_campaign=2999a39022-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_f83d87db0f-2999a39022-248737485

By Vivien Diniz - Exclusive to Uranium Investing News
Share on email Email

Uranium Prices On The Rise Prompted by the “short squeeze” and the victory by Prime Minister Shinzo Abe’s Liberal Democratic Party in Japan, uranium stocks made some impressive gains. A win by the Liberal Democratic Party (LDP) could be one of the catalysts that the uranium market has been waiting for. Following the Fukushima nuclear disaster Japan shut down all of its nuclear reactors until they were able to meet new safety regulations. With the LDP’s victory, it could mean a restart of the country’s nuclear plants.

On Monday, shares of U.S.-owned and operated nuclear fuel supplier USEC (NYSE:USU) more than doubled on speculation gains in nuclear stocks had bearish traders cover their positions. USEC shares climbed to as high as $15.44 before settling for the day at $11.98. According to Reuters, Monday marked a seventh consecutive climb for USEC’s share price, making for total gains of 228 percent.

Andrew Ross, partner at New York’s First New York Securities LLC, is of the opinion that USEC’s spike “ is purely technical, no real fundamental basis for the stock move,” citing a “short squeeze incited by their recent reverse stock split.”

Dennis Dick, proprietary trade at Bright Trading LLC in Las Vegas expanded slightly on Mr. Ross’ reasoning for USEC’s massive spike claiming that liquidity was also a factor. “Liquidity is very thin in a company of this size” he said “and the combination of that along with what appears to be a short squeeze is really moving the price.”

Overall however, USEC had no significant news on Monday that could explain the impressive spike in its share price, leaving market watchers to assume that Japan’s election of a pro-nuclear party could have played a larger role than perceived in the company’s gains.

Uranium companies making waves

While USEC made the most notable gains, other uranium producers or near-term production companies — primarily with operations in the United States — saw some activity in the wake of the LDP’s election.

Uranium Resources Inc (NASDAQ:URRE) saw its share price climb 23.08 percent or 60 cents on Monday. The company has several projects in Texas and operates the property via in-situ recovery (ISR) techniques. Since it began its operations in 1977, Uranium Resources has over 8 million pounds of uranium via ISR.

Near-term producer Uranerz Energy (NYSEMKT:URZ) was up 21.37 percent, a climb of 25 cents on its share price for the day. The soon-to-be ISR producer is working on development in the Powder River Basin in Wyoming. The company has entered into long-term sales contracts with two of the largest nuclear utilities in the United States. Uranerz also has a processing agreement in place with Cameco.

Ur-Energy (TSX:URE) which is looking to start production from the Lost Creek mine in Wyoming in just a few short weeks, was up 14.05 percent on Monday ending the day 17 cents higher at $1.38.

Denison Mines (TSX:DML) which produces uranium from McClean Lake, a joint venture project with AREVA, (EPA:AREVA) saw its shares climb 7.09 percent to close the day at $1.37.

The world’s largest diversified publicly traded uranium company was not left untouched by Monday’s rise in prices. Cameco (TSX:CCO) saw a small jump of 3.36 percent for the day, closing at $22.74.

[Tommy]

Uranium price



http://www.uxc.com/review/uxc_Prices.aspx

[Tommy]

Why There Is Still Hope For Nuclear Energy

http://seekingalpha.com/article/1547032-why-there-is-still-hope-for-nuclear-energy?source=email_investing_ideas&ifp=0

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)

Five years ago nuclear energy was projected to be the best alternative energy source to coal. But, since the shale gas boom in 2009, prospects for nuclear power faded. For example, industry leader, Exelon (EXC), saw its stock price drop from $90 in 2008 to about $31 today.

Further, accidents like Fukushima do not help the case for nuclear energy. But according to a poll conducted by the Nuclear Energy Institute, public support is finally returning to pre-Fukushima levels. The NEI poll showed 81% of Americans believe nuclear energy is important for the nation's future energy needs, and 82% said nuclear plants should continue to develop nuclear energy to meet growing energy demands. Further, as discussed below, government regulations are becoming less strict in the industry.

So, with dissidence declining now is a great time to invest in companies planning on expanding their nuclear operations.

New support for new designs

Only 5 commissioned nuclear plants broke ground in the past 30 years. And, only 4 more are projected to be installed in the next few years. The other 100 reactors in the U.S. are over 30 years old. They are outdated in terms of design and are unable to meet recertification regulation requirements.

This makes investing now an even greater opportunity while the infrastructure is still being built up. When reactors are retired, the amount of energy generated from the nuclear industry decreases. So, if nuclear power is to be a component of the U.S. energy output, new plants must be built.

The biggest hindrance to building new reactors is the Nuclear Regulatory Commission's (NRC) requirements for new plants. Hussein Khalil, director of Argonne's Nuclear Energy Division, said that safer reactor designs are not invested in heavily because of industry reluctance. After all, why would firms invest in the development of a design if there is no guarantee it will be approved by the NRS?

A solution is found through a 2006 NRC licensing procedure, which allows utility companies to choose from pre-approved designs. Now, utility companies can simply choose where to build plants knowing that the designs are already approved. With four new plants approved for licensing right now, utility companies are already showing confidence in investing in nuclear power.

Who are the big contenders for nuclear power?

Exelon Nuclear dominates the industry with an overall capacity factor of 92.7%, revealing that Exelon nearly maximizes its operating potential. Despite economic headwinds, 2012 growth investments in plant upgrades paid off-Exelon's output increased 500 Mega Watts. One MW provides enough electricity to power about 600 homes. So, with no new construction, technology investments increased output to 300,000 homes.

Exelon's balance sheet and stock price do not reflect the company's strength. Last March, the $7.9 billion acquisition of Constellation Energy and its regulated utility, Baltimore Gas and Electric, caused a re-evaluation of company assets at lower values. One potential reason for the lower valuation is to account for the weakened financial position having doubled its debt while growth projections fell 11% after the acquisition.

Valuation before acquisition

(click to enlarge)

Valuation after acquisition

(click to enlarge)

This acquisition makes Exelon one of the nation's largest energy service providers with operations in 47 states. Exelon is a great investment because it is trading near its 52-week low. This price is the lowest in 9 years, making it a great time to buy at a low support level. It will be a big player when nuclear energy takes off again.

Also, investors should watch FirstEnergy (FE) as it grows its nuclear operations. Despite rising nuclear fuel prices, FirstEnergy managed to cut its nuclear operating costs by $13 million this past year. This contributes to the $94 million it cut altogether in operating expenses (6% decrease) throughout 2013. As a result, it boasts an operating margin of nearly 14% (second among listed competitors).

(click to enlarge)

Nuclear energy accounts for one-third of the company's generating capacity and comprises about 20% of its revenues. With the number of plants being decommissioned, look to FirstEnergy to be a big investor in new plants.

A major contributor to the "King Coal" name, Ameren (AEE) reports that 81% of its energy generation comes from coal. Nuclear generation comes at a distant second at 15% while natural gas only comprises 3% of Ameren's total generation. As environmental regulations increase in the coming years and coal generation decreases as a result, Ameren will be forced to convert its coal plants to another source of energy.

It is already prepared for the transition. For example, Ameren will invest $3.6 billion in plant upgrades by 2020 to comply with regulations. Nuclear energy is the most probable source for Ameren as it is the cheapest alternative behind coal.

Another company, Dominion Resources (D) consistently outperforms the industry, making it a company to watch when nuclear energy rebounds.

(click to enlarge)

Dominion also boasts a P/E ratio of 107.65, which is more than three times its competitors.

(click to enlarge)

As stated in its 2012 Annual Report [pdf], Dominion understands nuclear energy is necessary for the future:

"If the nation were to replace these [decommissioned nuclear reactors] generating sources under current rules with only gas and renewables, that is the type of strategy that will lead to energy insecurity…. State-of-the-art nuclear reactors…must also be part of our energy future."

Southern Company (SO) is also poised to gain from the nuclear energy boom. For example, It currently operates three plants and is considering operating more (two are in construction). Moving forward, Southern looks to be nothing short of profitable. It reports both double-digit profit and operating margins that result from low costs of operation (12.26% and 23.79% respectively). And, as seen by the below chart, it generates great value for investors compared with the competition:

Company


Return on Equity


Dividend

Southern Company


10.89%


4.60%

Exelon


4.48%


4.00%

First Energy


13.40%


2.20%

Ameren


-13.58%


4.60%

Dominion


2.98%


4.00%

Southern is in for the long haul.

Nuclear energy will power through

Nuclear energy fluctuates with public opinion. But now, nuclear power is rebounding. U.S. citizens unanimously agree nuclear power is essential for future energy needs. This means certain companies must step up and invest now, to meet market demands later. Investors who jump on board now may ride the industry to the top.

[Tommy]

Thank you very much.

[Pro-Life]

A good link for data in this sector:

http://www.infomine.com/investment/uranium/

[Tommy]

Uranium Spot Prices Sink on Oversupply

Thursday July 4, 2013, 4:30am PDT

By Vivien Diniz - Exclusive to Uranium Investing News
Share on email Email

According to uranium price and analysis firm TradeTech, U3O8 was changing hands for $39.55 a pound on June 28, a $0.20 drop from the previous week. Rival nuclear consulting firm, UxC, reported that as of July 1 spot prices for U3O8 looked to be at $39.50 per pound. Despite lower prices, TradeTech tracked 6 transactions last week, writing that buyers are looking to cash in on lower spot prices.

Meanwhile, sellers are reluctant to sell large quantities at such depressed prices; however, they are willing to sell smaller quantities at a lower price. Accounting for the majority of the purchases were utilities, who bought from producers and traders. The firm indicates that utilities are still on the lookout for low-priced sales.

Japan’s reactors

An oversupplied market is to blame for the drop in prices for the “other” yellow metal. The ample supply of uranium is a side effect of Japan’s nuclear reactors having been shut down following the Fukushima nuclear accident in 2011. But it looks like the state of Japan’s reactors is expected to change soon as new regulations relating to nuclear energy take effect July 8. In preparation for the new regulations, Tokyo Electric Power Co (TEPCO) has filed with the nuclear regulatory authority to restart two of the idle reactors in Niigata prefecture.

TEPCO is aiming to restart two of the seven reactors at the Kashiwazaki-Kariwa plant, a step that it believes will be “key to improving the struggling utility’s business conditions” by reducing costs spent on importing fossil fuels.

Four other Japanese utilities are expected to follow in TEPCO’s footsteps with their applications in the coming week.

Niger mine restarts

Areva (EPA:AREVA) partially restarted production at its uranium mine in Niger on June 20. The move comes after a May 23 twin-suicide bombing by Islamist groups at the facility damaged the site’s electrical plant and left 26 people dead. Pascal Bernasconi, director-general for Somair, told Reuters that teams have worked around the clock to repair the damage to the electrical plant and are working hard to find a way to bring the rest of the plant online.

Paladin in the news

Near the end of June, pure play uranium miner, Paladin Energy (TSX:PDN, ASX:PDN), announced that it was seeking to sell a minority interest in its Langer Heinrich project in Namibia in order to unlock value from the company’s asset base. Paladin is currently in negotiations with two parties, but was unable to finalize a deal by the end of June. As a result, investors should look for the transaction to complete at some time in the September quarter. Keeping in line with its goal of reducing costs between $60 million and $80 million over the next two years, this transaction could knock off roughly $10 million from the company’s budget.

Most recently it seems like John Borshoff has extended his self-imposed pay cut and hinted at his plans to continue in his role at the top of the company. Borshoff’s contract expires later this year, coinciding with his 20-year anniversary at the helm of the uranium giant. Borshoff has shrugged off rumors of his pending retirement, stating that he will be looking to renew in the next few months.

Company news

Strathmore Minerals (TSX:STM,OTCQX:STHJF) has finalized the sale of the Pine Tree-Reno Creek 5 percent gross revenue uranium production royalty to a privately held company, AUC, LLC for $3 million in cash. Both Strathmore and Energy Fuels — which announced its intent to acquire Strathmore by way of plan of arrangement — believe that the alternative sale of the royalty to AUC is a good opportunity to monetize a non-core asset for significant cash proceeds.

Anatolia Energy (ASX:AEK) released its preliminary economic assessment (PEA) for the Temrezli Uranium project on July 1. The PEA highlights an NPV of US$173.9 million at a discount rate of 8 percent. According to the study, the Temrezeli project looks like it will be in the lowest quartile for uranium production. “At US$ 40/lb U3O8, the NPV (8% DCF) is US$ 68.8M, whilst at US$ 80/lb U3O8 the assessment provides for an NPV (8% DCF) of US$ 279.0,” the company stated.

Forum Uranium (TSXV:FDC,OTC:FDCFF) has confirmed that a fertile conductive trend hosting high-grade uranium (found on the Patterson Lake South project) has been identified on the company’s property. The discovery was made following the completion of an electromagnetic and magnetic survey across the company’s Clearwater project. The discovery was made during the first phase of the company’s summer exploration program.

Ur-Energy (TSX:URE,NYSEMKT:URG) has entered into a uranium supply agreement with a U.S. nuclear operating company for deliveries ranging from 200,000 to 300,000 pounds of uranium concentrate per year for a multi-year contract slated to start in 2017. Per the agreement, the average delivery price is consistent with current published long term U3O8 prices indicators, which stands at $57 per pound. The latest contract makes six supply agreements with four different U.S. utilities at prices that are higher than the current spot price.

Securities Disclosure: I, Vivien Diniz, hold no investment interest in any company mentioned in this article.

[Tommy]

Uranium hits seven-year low

http://www.mining.com/uranium-hits-seven-year-low-30875/?utm_source=digest-en-mining-130612&utm_medium=email&utm_campaign=digest

The Uranium spot price fell Tuesday to US$39.75 U3O8, plunging below $40.00 for the first time since March 2006.

The long-term price remains unchanged at US$57.00.

The worst performer in the past week was Crosshair Energy Corp (NYSEMKT:CXZ), which announced last week that it will delist on the NYSE.

But not everyone was a loser. Uranex Limited (ASX:UNX) saw a 51.5% rise, attributable to an update on its Nachu Graphite project, said analysts. Graphite assays exhibited up to 54.7% graphitic carbon content in the South Eastern Tanzanian deposits.

Developments in South Korea may offer some hope for the sector. The country has approved the revival of its Hanbit 3 nuclear reactor – it is expected to be running at 1,000 megawatt capacity by the end of the week.

This will put the number of active nuclear reactors in South Korea to 14, leaving nine still not running. The plant was shut down in October due to safety concerns.

Meanwhile in Canada, things are about to get more expensive for nuclear operators. The federal government has increased the liability ceiling for nuclear operators to $1 billion. The previous limit of $75 million for civil damages had not been updated in four decades.

[Tommy]

How To Play The Nuclear Energy Comeback

http://seekingalpha.com/article/1485571-how-to-play-the-nuclear-energy-comeback?source=email_rt_article_readmore

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in CCJ over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Nuclear energy has been out of favor since the Fukushima accident happened in Japan two years ago. One of the major concerns towards nuclear energy is safety. This recent disaster reminded us how volatile the power plants are, especially when they aren't maintained properly. In Fukushima, the accident's cause turned out to be a lack of diversified power and cooling systems, which went against international standards and recommendations. If the recommendations of international authorities had been followed, most probably the accident could have been avoided.

Despite a few nuclear disasters in history, nuclear energy is still safer than other energy sources. Moreover, it has many benefits such as a large base of accessible uranium reserves, low-cost energy generation, and low greenhouse gas emissions. Despite this the market for uranium, which is the main fuel in nuclear reactors, has yet to recover since Fukushima.

Uranium does not trade on an open market like other commodities. Buyers and sellers negotiate contracts privately. Prices are published by independent market consultants Ux Consulting and TradeTech. According to these consulting companies, the price of uranium is currently near its five-years lows. Much of the fall in price is due to Japan shutting down 52 of its 54 nuclear reactors, following Fukushima. Germany has also said it wants to end its nuclear programs over the next years, in response to negative public opinion.

The shutdown of nuclear reactors in Japan led to a strong rise in oil imports to feed its oil-fired power plants, to fill the gap of lower electricity supplied by nuclear energy. This may also help explain why the country is now running a trade deficit for the first time over the past five years. Given the country's high debt level, this only makes the problem worse and much probably will lead to a restart of nuclear reactors. Indeed, new Prime Minister Shinzo Abe has already been very vocal about this issue.

If Japan restarts its nuclear power plants adding to 64 nuclear reactors under construction around the world, the demand for uranium has a strong base to grow over the coming years. For instance, China wants to quadruple its nuclear capacity by 2020 which will increase considerably uranium demand. In 2022, it is expected that will be 523 reactors operating, up from 423 today. That is a level of growth not seen in the industry for many years. Cameco Corporation (CCJ) is the second-largest uranium producer in the world and the world's largest publicly-traded uranium company. It is also the world's largest producer of U308, a mineral whose only commercial use is to fuel nuclear power plants. Given the growth outlook for nuclear energy over the long-term, the company may be a very good way to play this theme.

Cameco is based in Canada, headquartered in Saskatchewan. In 2012, Cameco had $2.3 billion in revenues. The company generates half of its revenues from uranium mining and another 15% form the conversion process. The company's sales are geographically diversified, with about half generated in North America, 30% in Europe, and 20% in Asia. Cameco's strategy is to increase annual uranium supply to 36 million pounds by 2018, being the focus of the company's growth strategy the uranium segment. Therefore, going forward the company will be even more leveraged to higher uranium prices and increasing demand.

Moreover, the company has a very good financial performance, even tough it faces a challenging environment in the near-term. In 2012, revenues decreased slightly, but the company was able to maintain its high business margins. The gross profit was $723 million, or a margin above 31%. In addition, its balance sheet is very solid with a relatively low level of debt, resulting in investment grade credit ratings.

Cameco's market capitalization is about $8.5 billion currently. Although its dividend yield is not fantastic at 1.9%, it never missed a dividend payment since its IPO in 1991, and has a history of increasing the dividend rate. It is trading at 17x forward earnings-per-share, 1.7x price-to-book-value, and 13.7x EV/EBITDA, which compares favorably with the industry averages.

Conclusion

Uranium prices are at very low levels and should benefit over the long-term from increased demand from nuclear power plants. Cameco as the largest publicly-traded uranium company is the best way to play this growth theme. The company's valuation appears to be undemanding because nuclear energy has been out of favor among investors, but that may change in the short to medium-term. To unlock this value, a short-term catalyst may be Japan's decision to restart is nuclear power plants that were shut down since the Fukushima disaster. Given the deteriorating trade data in Japan over the last few months, that decision may be taken in the short-term and will ultimately benefit Cameco immensely.

[Tommy]

Uranium Spot Market Spike on the Horizon

http://uraniuminvestingnews.com/14743/uranium-spot-market-spike-on-the-horizon.html?utm_source=Resource+Investing+News&utm_campaign=a65c56d5a9-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_f83d87db0f-a65c56d5a9-248737485

Activity in the uranium spot market remained flat for most of May, closing out the month at $40.40 per pound U3O8 reported TradeTech. The industry consultancy firm attributed the flat market to “a lack of ‘have-to’ demand combined with few aggressive sellers.” The terrorist attack at Areva’s (EPA:AREVA) Somair uranium mine in Niger didn’t put much pressure on the supply side as the company reports it will still be able to honor its delivery commitments.

The majority of buying interest is now for delivery in 2014, and with prices still remaining weak analysts aren’t expecting a market rebound in the near-term. JP Morgan has moved its target date for a spike in the uranium market to 2016 from 2015 citing sufficient supplies for near-term utility requirements, reports the Financial Post. The firm has also lowered its spot price forecasts to $43 per pound U3O8 in 2013, $58 per pound U3O8 in 2014, and $70 per pound U3O8 in 2015.

TradeTech estimates that 210 million pounds of U3O8 will be needed by 2025 to fill the looming supply gap brought about by production cutbacks under the current low pricing environment. JP Morgan analysts are calling for a spot price of $90 per pound U3O8 in 2016. “Despite this push out, we have a favorable outlook for uranium over the long term due to relatively predictable demand and high inducement prices, which are limiting supply growth,” said Tyler Langton, a metals and mining analyst at JP Morgan.

New reactor builds

China’s Ministry of Environmental Protection reported Tuesday that the country’s 15 operational nuclear power reactors are in a safe status. The government also noted that construction of the 29 nuclear power reactors being built is well-controlled to ensure safety and security. China is targeting 2015 to bring all nuclear facilities up to the regulations outlined in the October 2012 national plan on nuclear security.

Last week, construction began on the United Arab Emirate’s second nuclear power reactor at Barakah in Abu Dhabi. The work is under the direction of a Kepco-led consortium that won the bid in 2009. Construction on units 3 and 4 will begin in the coming years and start up of the four APR-1400 reactors will begin in 2017 with full capacity expected to be reached by 2020, reported World Nuclear News.

Company news

Cameco Corporation (TSX:CCO,NYSE:CCJ) and Areva have signed a $600 million deal with the English River First Nation of Saskatchewan which includes business contracts and employee wages over the next ten years. The deal “supports [the companies’] mining operations and drops a lawsuit over land near the proposed Millennium project,” reported the Globe and Mail. The Millennium project is estimated to contain more than 50 million pounds of U3O8. Under the agreement the First Nation agrees to drop a 2008 lawsuit against the Saskatchewan government involving a disagreement over land that includes the Millennium underground mine project. However, several band members are opposing the deal and considering launching a complaint with the Human Rights Tribunal saying they were not properly consulted and important information concerning community impact was not properly disclosed.

The proposed mine still requires environmental approval and Cameco plans to submit the final environmental impact application to regulators later in the year.

Last week, JP Morgan cut back its 2013 earnings per share (EPS) forecast for Cameco to $1.04 from $1.12 and its 2014 EPS to $1.47 from $1.55; analysts also introduced a 2015 estimate of $2.22. The firm kept its neutral rating and target price of $22 on Cameco shares.

Areva reached an agreement this week with Hitachi-GE Nuclear Energy, Ltd. to work together on the design, fabrication and installation of filters containment venting systems (FCVS). The partnership hopes to use this technology to improve the safety of nuclear power plants in Japan. Areva has already installed FCVS in more than 50 plants worldwide, reports PennEnergy. The technology is essential in the prevention of damage to the primary containment vessel under circumstances resulting in pressure rises.

Junior company news

Alpha Minerals Inc. (TSXV:AMW,FWB:E2GA) and its joint venture partner Fission Uranium Corp. (TSXV:FCU) shared the final assay results from the winter 2013 program at the JV’s 50/50 Patterson Lake South (PLS) property in the Athabasca Basin. Highlights include hole PLS13-066 which returned an interval of 63.5m at 1.15% U3O8, including 2.0m at 9.51%. This and other holes show continuous areas of broad uranium mineralization at shallow depth in all three PLS zones.

Fission Uranium announced Monday that it has acquired three new properties in the northwest and northeast Athabasca Basin regions of Canada. Encompassing 15,373 hectares, the properties are referred to as Beaver River, Thompson Lake and Manitou Falls. Beaver River property includes most of the known EM conductors in the area and a number of uranium showings including surface outcrop sample assays of 3.66%, 3.37%, and 2.93% U3O8. Previous exploration at Thompson Lake has identified numerous uranium showings including outcrop grab sample assays of 2.23% and 0.11% U3O8. The Manitou Falls property benefits from a large amount of historical data from surveys and ground prospecting work that has identified six radiometric anomalies and multiple conductors.

Kivalliq Energy Corporation (TSX:KIV) has reported its second drilling discovery of this season, the twelfth since 2010. Uranium mineralization associated with the ML Zone conductor located 650 metres north east of the J4 Zone at the company’s Angilak Property in Nunavut Territory, Canada. “Holes 13-ML-001 and 002 tested the ML Zone conductor 300 metres west of the 2012 RC hole. 13-ML-001 intersected anomalous radioactivity with values between 200 and 30,000 cps over a true width of 1.3 metres at 60 metres vertical depth,” stated the press release. The Angilak Property hosts the Lac 50 Trend with a NI 43-101 Inferred Resource of 2,831,000 tonnes grading 0.69% U3O8, totaling 43.3 million pounds U3O8.

Raymond James analyst David Sadowski recommends Kivalliq on high-grade resource growth potential, strong management, attractive valuation and active news flow. The firm holds a $0.70 target price for the company as well as an outperform rating.

Energy Fuels Inc. (TSX:EFR) is set to become one of the biggest uranium companies in the United States with the planned acquisition of Strathmore Minerals Corporation (TSX:STM). Both companies have signed a letter of intent under which Strathmore shareholders will receive 20 percent of Energy Fuels shares. Strathmore is constructing a mine in the Gas Hills area of Wyoming (only 45 km from Energy Fuels’ Sheep Mountain project), and operates three more uranium projects in Wyoming and four in New Mexico. Energy Fuels is developing the Sheep Mountain mine and has other properties in Wyoming, Colorado, Utah and Arizona. The acquisition affords the possibility of processing uranium from Strathmore’s 60 percent-owned Roca Honda uranium project in New Mexico at Energy Fuels’ White Mesa mill in Utah.

“KEPCO, which is the largest shareholder of both Energy Fuels and Strathmore, has already expressed its support for the transaction,” reported World Nuclear News. The transaction is expected to be completed by the end of August.

Forum Uranium Corp. (TSX:FDC) and joint partner NexGen Energy Ltd. (TSXV:NXE) have reported drill results from shallow uranium mineralization encountered from drilling at Otis West at the JV partners NW Athabasca project. Grades of up to 1.80% U3O8 were intersected in 5 of 9 holes drilled on this target immediately south of the Maurice Bay deposit. The mineralized zone remains open to depth and to the east; future drill programs will continue drilling along the Otis Fault to the east. The project is jointly held by Forum and NexGen (60 percent along with Cameco (27.5 percent) and Areva (12.5 percent).

UEX Corporation (TSX:UEX) has completed an updated NI 43-101 Technical Report on the Shea Creek Project located in the western Athabasca Basin of Saskatchewan, Canada. The property is 49/51 split between UEX and AREVA Resources Canada Inc. (the project operator) respectively. The report includes a mineral resource estimate showing Indicated Resources of 67.66 million pounds U3O8 comprising 2,067,900 tonnes grading 1.48% U3O8; and an Inferred Resource of 28.19 million pounds U3O8 comprising 1,272,200 tonnes grading 1.01% U3O8 both at a cut-off grade of 0.30% U3O8. Following the announcement of the filing of the technical report, shares in UEX jumped 8.8 percent to 0.495 cents, reported Stockhouse.

Tuesday, UEX announced a supplemental $2 million exploration budget for drilling at Shea Creek, in addition to the $3.1 million program announced in March 2013. A geophysical program began last month and drilling on the Anne Deposit and the Kianna area will commence shortly.


Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

[Tommy]

Uranium Miners Analyst Watch: June Edition

http://seekingalpha.com/article/1482041-uranium-miners-analyst-watch-june-edition?source=yahoo

Disclosure: I am long URZ. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article contains analysis of micro cap stocks. Caveat emptor.

Over the last three months we have been keeping records on analysts' price targets for uranium mining and development companies. A month ago we reported our observations for the first time, and in this article we would like to provide our monthly update.

As in the previous offering we will be considering the following companies in alphabetical order: Cameco (CCJ), Denison Mines (DNN), Uranerz (URZ), Uranium Energy (UEC), Uranium Resources (URRE) and Ur-Energy (URG). Our data for these stocks is summarized in the table below. The first three columns list the company name, ticker symbol and share price at the time of writing. Price targets (low, median and high) are listed in the following three columns. These targets are followed by a column giving the number of analysts providing data and the mean recommendation given by these analysts ranging from 1.0 (strong buy) to 5.0 (sell). This concludes the data sourced directly from Yahoo.com.

The following columns are colored in light green and contain data given in percentages related to the share price at the time of writing as documented in the third column. The column titled "median-price" gives the difference between the share price and the median target price. The column titled "high-low" gives the difference between the high and the low target. The last four columns titled "target change" document the changes in price targets since the May report with the last columns giving the average change over the low, median and high price targets.

Note: Denison Mines and Uranium Resources are only covered by one single analyst, and Ur-Energy by two.

(click to enlarge)

We are especially interested in the following three measures documented in the table above:

Column "median-price" indicates the potential of the stock as far as analyst targets are concerned.
Column "high-low" measures the divergence in analyst opinions.
Column "target change average" gives a measurement for the change in targets during the past month.

The results for these three columns are visualized in the three diagrams below.

(click to enlarge)

(click to enlarge)

(click to enlarge)

Observations

Uranerz is trading at around half of the median price target and therefore seems to have the greatest growth potential out of the stocks considered for this study. At the same time, Uranerz has the greatest spread between high and low target indicating some disagreement in analyst expectations. On average targets for Uranerz have been cut a fraction during the past month. Uranerz is a development stage mining company preparing for production later in the year. At that stage companies are at their most vulnerable. Analysts obviously weigh the risks and rewards for Uranerz differently. At 1.6 the analyst recommendation is quite bullish for Uranerz.

Ur-Energy is in a similar situation as Uranerz above and similar characteristics can be observed when monitoring analysts' targets. Ur-Energy trades well below the median target and the spread between high and low target is relatively high. Targets have been lifted significantly during the past month indicating a bullish tendency. Ur-Energy gets a 1.5 recommendation from analysts which is the most bullish in this group of stocks.

Targets for Uranium Energy have also been lifted in recent weeks. The company is trading just below the median target price and analysts recommendation is given as 1.8 which an improvement from last month's 2.0.

Hardly any changes have been recorded for Cameco during the past month. The share price has been holding up stronger than we anticipated and our hopes of picking up a position at a $16-handle have not eventuated just yet. The company has 20% upside until hitting the median price target.

Denison Mines is the only company out of the group considered for this article trading above the price target (there is only one analyst) which could be considered bearish, especially since this price target has been lowered slightly during the past month and the recommendation is pegged at 2.8.

Uranium Resources has 29.6% to go until it reaches the only price target provided for this company. This target has remained unchanged for the duration of our coverage.

Our pick of the month: Uranerz and Ur-Energy offer considerable growth potential and might be of interest for investors with adequate risk tolerance. This article might just provide a starting point for further research.

[Tommy]

Uranium Month in Review May 2013
Posted on June 4, 2013 by Canon Bryan

http://www.proedgewire.com/uncategorized/uranium-month-in-review-may-2013/

May 2013 was an action-packed month in the nuclear industry, most of which portended positively for the uranium sector. Supply, demand and individual companies in the sector all experienced events that will have lasting significance.

SUPPLY

The antiquated enrichment plant at Paducah, Kentucky, which has been providing the US reactor fleet with over half of its enrichment services – vital to nuclear fuel fabrication – has been closed after more than 60 years of service. The US is now left with virtually no enrichment capacity for an indefinite period. No less importantly, the US can no longer reprocess depleted uranium for the tiny quantities of remaining uranium-235. This was an important supply of non-mined reactor-grade fuel, and it is now gone.

In Africa, Areva’s (AREVA: PA) uranium mine at Arlit was bombed by Al-Qaeda-backed Tuareg terrorists. The Areva personnel casualty count was one dead and 14 wounded in the bombing. A critical unit of the plant was also damaged, causing production to be shut down for up to nine months for repairs, and costing Areva an estimated $35 million per month. This plant alone processes 5% of the world’s uranium. Its closure will have an impact on an already insufficiently supplied market.

Even more shocking during May, was information from Rio Tinto regarding their giant Rossing mine in Namibia. Apparently, the financial situation at this operation is so bad that the company is on the verge of shutting it down. Rossing accounts for another 4% of the global uranium supply. Earlier this year, Rio Tinto announced the permanent cessation of mining at their Ranger open pit mine in Australia, which supplied 5.5% of global supply.

DEMAND

The Energy Information Administration released their 2012 report on global uranium consumption. The EIA is a data-gathering division of the US Department of Energy, and it puts out exceptionally high quality data. Major findings from 2012 were that 86% of all uranium delivered to international customers was from long-term contracts set years before at pre-determined prices. Furthermore, the average realized price for uranium internationally in 2012 was $59 per pound – nowhere near the average spot price, which was well below $50 per pound.

Both the Abe Administration in Japan and Casey Research in the US have been bombarding the media with justifications for nuclear – either for investment, or for restarting reactors. The number of news stories generated by these two organizations has felt like a blitzkrieg.

Meanwhile, wild speculation about TEPCO’s (9501: JP) announcement of reactor restarts sent TEPCO shares soaring on the Nikkei Stock Exchange during the month. The shares rose 59% in four trading sessions. Cameco, which counts TEPCO as one of its biggest customers, followed suit with its shares rising 25%. Actual announcements will be made on July 15.

In other media, the pro-nuclear documentary “Pandora’s Promise” debuted at the Cannes Film Festival, with much fanfare amongst the nuclear community. The trailer is exciting, and it is interesting to speculate how many people will actually watch this film.

URANIUM SECTOR

In the junior sector, U3O8 Corp (UWE: TSX) completed its acquisition of Calypso Uranium (CLP: TSXV), and Energy Fuels Inc (EFR: TSX) announced its acquisition of Strathmore Minerals (STM: TSX) for $31 million. The consolidation could very well continue, with companies desperate to unlock value.

[Tommy]

Why uranium is the next BIG resource play: Marin Katusa Video

[Tommy]

Commodities Today: 4 Uranium Firms For The Portfolio; Wary Of A Gold ETF

http://seekingalpha.com/article/1479361-commodities-today-4-uranium-firms-for-the-portfolio-wary-of-a-gold-etf?source=google_news

CCJ
UEC
URG
URZ

[Tommy]

$CCJ - $UEC - $DNN - $EFRFF - New Report States Uranium Demand to Grow at 4% CAGR

http://beta.fool.com/mockingjay2011/2013/05/29/new-report-states-uranium-demand-to-grow-by-a-cagr/35669/?source=eogyholnk0000001

U.S. uranium producer Cameco (NYSE: CCJ) has been saying all year that uranium demand will increase at a 3% Compound Annual Growth Rate, or "CAGR," over the next 10 years. Recently, a new report by GlobalData suggested that uranium demand will increase by a 4% CAGR over the next eight years. Either way, with the supply side looking increasingly challenged, uranium prices are likely to go higher.

Last week, a key Areva uranium mine in Niger suffered a serious suicide bomb attack. This is just the latest in a string of unfortunate events impacting global supply. Niger was a top-five producing country in 2012. Another top-five producer last year was Namibia. Taken together, production from the three African countries Niger, Namibia and Malawi, represented the second-largest source of uranium after number one producer Kazakhstan.
Supply Side Far Less Certain

In terms of recoverable resources (as of 2011), among the top 14 countries are Kazakhstan, Russia, Niger, South Africa, Namibia, Uzbekistan, Ukraine, and Mongolia. Hardly a reassuring bunch to rely on when it comes to security of supply for end-users! Clearly, the supply side of the equation is fairly uncertain. With demand likely to rise by 3%-4%, how will end users be able to count on reliable supply?

Recently, there's been a rash of newsletter writers and pundits calling for a spike in uranium prices and uranium stocks. For example, Casey Research hosted a well done and well-received Webinar and posted this video clip. Both Mickey Fulp, (the Mercenary Geologist) and Jeb Handwerger have been very vocal on the topic. Even billionaire Rick Rule of Sprott has been heavily promoting the uranium bull thesis. Further reading can be found....[here], [here], [here] and [here].

What uranium price is necessary to make the uranium renaissance come true? I think that $70-$80 per pound would do the trick. With the current spot price at $40 per pound, does that mean prices have to double?

Spot Uranium Prices Not Highly Relevant, Long-Term Contract Prices are Key

Not necessarily -- because the current spot price is not the relevant benchmark. Spot prices are important for commodities that trade with contract terms set quarterly or annually. They're also good indicators of market sentiment. For coking coal, a quarter or third of the total market might trade in the spot market. For uranium, contract terms are 5-10 years.

Thus, the real figure to watch is the long-term benchmark uranium price, currently $57 per pound. Just a 30% increase would drive the long-term price above $70. How likely is a 30% increase? Well, just before Japan's Fukushima accident in March, 2011, the long-term uranium price was $73 per pound. Fast forward two years, uranium demand has returned, recently surpassing that of pre-Fukushima days.

A sustainable rebound in the long-term price above $70 per pound is not a stretch. In fact, the long-term contract price could move well beyond $70 this time around. Since Fukushima, the uranium cost curve has moved decidedly higher. That's why we've seen several industry giants delay and/or cancel mega-uranium projects. The long-term "incentive price" -- i.e., the price necessary for large greenfield projects to get funded -- is thought to be $75-$85 per pound.

Higher costs and the above mentioned security-of-supply concerns should support long-term prices in the $80s or $90s per pound. To be clear, we may not see those prices next quarter or even next year, but they're coming. This would not cause angst among utility customers, because the cost to utility customers of uranium fuel is a relatively small part of operating costs.
Which Uranium Companies Should You Buy?

Cameco is a powerhouse in North America and has ample organic growth opportunities. Its stock could be poised for a nice move. For investors looking for bigger returns, albeit with more risk, uranium juniors are worth looking into.

Denison Mines (NYSEMKT: DNN) is an emerging star in Canada. Having sold its U.S. assets to Energy Fuels, Denison is the top exploration play in and around the Athabasca region. The company is frequently mentioned as a takeout target, with Rio Tinto, Areva and Cameco cited as the most likely suitors. Denison recently finalized the acquisition of Fission Energy. The company now has a range of early-stage to later-stage exploration and development projects. The Athabasca region has the highest-grade uranium ores in the world.

Energy Fuels (NASDAQOTH: EFRFF) generated a lot of buzz last week by announcing its intent to acquire Strathmore Minerals. The new and improved Energy Fuels would be the largest uranium company in the U.S. In addition to a combined 127 million lbs of NI 43-101 compliant resources, Energy Fuels owns the White Mesa Mill, the only operating conventional uranium mill in the U.S. White Mesa has permitted annual capacity of 8 million pounds. See these excellent articles on Energy Fuels, [here] and [here].

Uranium Energy (NYSEMKT: UEC) is another highly prospective U.S. uranium company. Uranium Energy is in production and is growing. It utilizes an in-situ approach called solution mining to extract uranium. The company has a cluster of in-situ mining development projects in Texas, in close proximity to the its Hobson Facility. Uranium Energy is looking to make additional tuck-in acquisitions of assets within trucking distance of Hobson.

Conclusion

There have been many recent articles written on investment blogs and by professional newsletter writers about a bull market in uranium stocks. Most articles recommend buying Cameco to ride the upside. Investors watching the spot uranium price may miss a big move in uranium stocks because the long-term contract price is the key variable. Cameco will provide good returns when uranium prices rebound. Substantially higher returns could be possible, albeit with greater risk, by investing in junior miners like Denison Mines, Energy Fuels and Uranium Energy.

[Tommy]

Why a uranium renaissance looks inevitable

http://www.resourceinvestor.com/2013/05/29/why-a-uranium-renaissance-looks-inevitable?eNL=51a634411b4f3af60e00000b&utm_source=DailyENL&utm_medium=eNL&utm_campaign=RI_eNL&_LID=483204

Casey Research's Chief Energy Investment Strategist, Marin Katusa, whose portfolio profited nicely the last time the uranium bull broke loose a decade ago, recently interviewed a group of world-renowned energy experts to discuss the prospects for the sector that some considered doomed by the Fukushima disaster. Anti-nuclear power sentiment has by no means evaporated, but Katusa sees clear signals that the bulls are ready to run, not least of which is the recent attack on the Somair uranium mine in Niger.

Why? First, the 20-year Highly Enriched Uranium (HEU) Program agreement between the U.S. and Russia, aka "Megatons to Megawatts," expires this year.

Second, the end of that program will allow Russia to sell its coveted uranium, which currently powers one of every 10 homes in the U.S., to the highest bidder. With 200 nuclear power plants under construction or on the drawing boards, China is likely to be first in line, with India and even oil-rich Saudi Arabia on its heels.

Third, the increase in nuclear plants being built around the world will stimulate huge demand while supply inevitably dwindles. Because it can take a decade to bring a uranium mine on-line, new mining production can't grow fast enough to meet the demand.

Fourth, like it or not, nuclear energy is clean—while the average coal-fired power plant in the U.S. emits nearly 4 million metric tons of CO2 each year, nuclear power plants emit no carbon dioxide, sulfur dioxide, nitrogen oxides, mercury or other toxic gases.

Finally, last Thursday, an Al-Qaeda splinter group attacked the Somair uranium mine in Niger—owned by French uranium giant Areva. This will further disrupt global uranium supplies and emphasizes what the energy experts have been saying: Uranium is prime for price increases.

Casey Research agreed to share Katusa's segment with Sprott U.S. Holdings Chairman Rick Rule withThe Energy Report readers and invites you to listen to the rest.

Marin Katusa: We first met 10 years ago, when you were begging people to buy uranium companies, and the market boomed. Those of us who followed your advice made a lot of money. Are you expecting a replay in that market?

Rick Rule: I think so. The similarities are interesting. At that time, the price of uranium on the market was less than what it cost to produce it, which meant that one of two things would happen: Either the uranium price would go up, or the lights would go out. Those were the only two choices. We're in a situation now where the uranium price on world markets is lower than what's required to bring online the supplies needed to keep the lights on around the world. So once again, either the uranium price goes up, or the lights go out. I think the price will go up.

MK: What can you tell investors who are nervous about uranium? Nuclear power is unpopular. Why should investors expect its feedstock to have this massive bull market?

RR: You make money in financial markets by buying low and selling high, and you can't buy low when something is universally loved and every investor is competing with you. You have to buy things when they are unloved. In natural resources, you can be a contrarian or a victim. You had the good sense of getting into the market when uranium was cheap, and you also had the good sense to get out when everybody else was flocking in. You did what you were supposed to—buy it when it was out of favor and sell it when it came into favor. It's out of favor again. You will make money buying it now and selling again when it returns to favor, because it will.

[Tommy]

Energy Fuels Acquires Strathmore Minerals for C$29.1 Million

http://www.u3o8.biz/s/MarketCommentary.asp?ReportID=585650&_Type=Market-Commentary&_Title=Energy-Fuels-Acquires-Strathmore-Minerals-for-C29.1-Million

America's leading conventional uranium producer, Energy Fuels (TSX:EFR), is one step closer to becoming the largest uranium company in the United States after signing a letter of intent to acquire Strathmore Minerals (TSX:STM) in an all-share deal worth C$29.1 million. Per the agreement, Strathmore shareholders will receive 1.47 common shares of Energy Fuels for each Strathmore share.

The acquisition of Strathmore will make the combined company the largest pure play uranium company in the US with current production of 1.175 million pounds of uranium for 2013 as well as a robust pipeline of development projects.

"Energy Fuels is very pleased with this transaction, because it just makes sense. Our two companies have key projects located in close proximity to one another. Strathmore's Roca Honda Project is one of the largest and highest-grade uranium projects in the U.S. And, it is within trucking distance of Energy Fuels' White Mesa Mill, providing the opportunity to put this excellent project into production." Curtis Moore, spokesperson for Energy Fuels told Uranium Investing News.

In addition, Energy Fuels' Sheep Mountain project --- the largest conventional uranium project currently in development in the US--- is not far from Strathmore's Gas Hills project in Wyoming. With the proximity of Gas Hills, Energy Fuels benefits from "excellent opportunities for synergies and cost savings." Moore said.

"Most importantly," Moore concluded, "the transaction enhances our relationship with KEPCO, our largest shareholder and customer, and South Korea's largest utility. KEPCO is currently developing Gas Hills in a joint venture with Strathmore. In addition, Strathmore is developing the Roca Honda Project in a joint venture with Sumitomo Corporation. Energy Fuels looks forward to moving these projects forward and further cultivating these important relationships."

Energy Fuels is one of a handful of publicly traded, uranium producers in the world. "This transaction will make Energy Fuels "one of the top two or three holders of uranium resources in the U.S." Moore said.

The acquisition is an important step for the company in it's plan to consolidate conventional uranium production in the United States. Recent acquisitions for the company include Denison Mines' (TSX:DML) U.S. assets and Titan Uranium.

Following the announcement, Energy Fuels is trading at 17 cents, a 12.9 percent climb in its share price.

[JohnCM]

Right along with solar?

[Pro-Life]

Finally, a sustained uptrend...

[Tommy]

Uranium Equities: Time To Stock Up

http://uraniuminvestingnews.com/14318/uranium-equities-time-to-stock-up.html?utm_source=Resource+Investing+News&utm_campaign=a217fa1a18-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_f83d87db0f-a217fa1a18-248737485

Even though uranium prices haven’t been experiencing the turnaround that analysts and market watchers have hoped for so far in 2013, the market is not lacking opportunity. With compelling long-term fundamentals, now is the time that investors should look to snatch up some cheap stocks, while waiting for the tides to turn.

Despite having reported a cut in its short term price forecast for uranium, in a recent revision of uranium supply demand fundamentals, Raymond James analyst David Sadowski writes that “we retain conviction of a global shortfall situation commencing in 2014, which should result in sustained, higher uranium prices.”

With prices trailing below $50/lb so far this year, Raymond James has reduced its 2013 uranium price forecast to US$45 per pound from $58/lb. However, despite lowering its estimates, the firm feels that uranium has the potential to move towards the $50/lb range by year-end. For 2014, Raymond James sees uranium at $45/lb, and remains bullish on uranium’s long term fundamentals, maintaining its original outlook of $70/lb.

Raymond James recommends investors look at “quality uranium equities with compelling near-term catalysts,” that can weather current lows and benefit from the inevitable rising price. Among Raymond James’ top picks sit Cameco (TSX:CCO), Denison Mines (TSX:DML) and Kivalliq (TSXV:KIV).

Top 3 picks

Cameco is Sadowski’s top pick for uranium producer, calling it the “go-to” blue-chip name in the uranium space. The company is a low-cost producer with a low risk profile. Cameco is one of the largest uranium producers with the two top high-grade uranium mines, McArthur River and Cigar Lake, located in Saskatchewan’s Athabasca Basin.

Investors should be on the lookout for the start-up of Cigar Lake, slated for mid-year with first production delivered in Q4.

As far as development projects go, Denison is Sadowski’s top pick. The company is working on developing its Wheeler River Phoenix deposit located between the McArthur River and McClean Lake mill. Phoenix has roughly 60 million pounds of uranium, at 16.5 percent grading, making it the third highest grade uranium deposit in the world, after Cameco’s McArthur River and Cigar Lake deposits. With the finalized acquisition of Fission Energy’s assets, Denison is poised to be a premier uranium miner.

Denison has several upcoming catalysts that investors might want to note. The company is working on resuming operations at the McClean Lake mill, as well as starting a summer drill program at Wheeler River.

Raymond James continues to believe that Denison Mines could be a potential takeover target for either Rio Tinto (NYSE:RIO), Cameco or Asian nuclear utilities.

Kivalliq Energy is Raymond James’ top exploration company pick. With its projects located outside the Athabasca Basin, the firm views this junior as “one of the most exciting uranium explorecos operating today.”

So far, Kivalliq is off to a strong 2013, kicked off by a 60-percent increase in its previous resource estimate for the Lac 50 Trend in January, and new discoveries at the Angilak property in April. For the remainder of the year, Kivalliq has a number of upcoming catalysts that include preliminary results from its 3,000- to 4,000-meter phase 1 drill program at the Angilak deposit, which are expected over the next several weeks, as well as assay results, further drilling during the summer months, followed up by a potential resource update in the new year. The company expects a maiden preliminary economic assessment in early 2014.

Other considerations

Raymond James also had a look at several other uranium companies that could be valuable assets for an investor. The firm looked at Paladin (TSX:PDN), highlighting its improving operations and looming asset sale, which should significantly reduce debt.

UEX Corp. (TSX:UEX) owns 49 percent of Shea Creek, which is noted as one of the largest undeveloped resources in the Athabasca Basin. Raymond James believes the project has “superb exploration upside.” Ur-Energy (TSX:URE) is working towards production on Lost Creek in Wyoming; investors should look out for that in late 2013.

[JohnCM]

[Tommy]

Uranium Spot Price Slides on Supply
Publisher: U3O8.biz
Author: Melissa Pistilli

http://www.u3o8.biz/s/MarketCommentary.asp?ReportID=581559&_Type=Market-Commentary&_Title=Uranium-Spot-Price-Slides-on-Supply

The uranium spot price plunged $1.35 this past week, to $40.90 per pound U3O8, as new supply entered the market, according to TradeTech. "The lack of market activity and reports of new problems with import licenses at the Chinese border prompted some sellers to lower offer prices," reported the industry consultancy firm. "However, the drop in the spot price has yet to attract extensive buying interest and only two transactions are reported for the week."

Estimated 2013 uranium production from the world's leading uranium producer, Kazakhstan, is pegged at 22,821 tons U3O8. The Central Asian nation plans to "annually boost" its uranium production in order to keep its top-dog status, according to Tengri News. A look at Kazakhstan's nuclear power agency's 2012 to 2016 strategic plan shows yearly production targets of: 24,019 tons U3O8 in 2014; 24,754 tons U3O8 in 2015; and 25,602 tons U3O8 in 2016.

Last week, the Canadian Nuclear Safety Commission and India's Department of Atomic Energy finalized arrangements for Canadian companies to export nuclear products and fuels to India. "The agreement ensures Canadian exports only go to facilities in India under International Atomic Energy Agency safeguards," reported the National Post. India plans to construct 12 new nuclear reactors by 2021, and its annual uranium purchases are expected to triple to about $650 million.

The United Arab Emirates expects to have a nuclear power capacity of 5,600 megawatts by 2020, reported Bloomberg Businessweek. In 2015, AREVA (EPA:AREVA) will be supplying nuclear fuel for the Jordan Research and Training Reactor (JRTR), currently under construction in the Kingdom of Jordan, reported The Wall Street Journal. "Construction of the JRTR research reactor by the KAERI/DAEWOO consortium is an essential step for Jordan in acquiring the capabilities required for nuclear R&D and producing nuclear power," states the report.

Company news

Energy Resources of Australia (ASX:ERA) has set its sights on building a new mine in the Northern Territory, reported The Australian, in an effort to "extend the life of its declining and unprofitable open-cut Ranger mine in Kakadu National Park." The company is planning to start underground exploration drilling of the Ranger 3 Deeps exploration decline in the second quarter of this year.

Junior company news

The Patterson Lake area in Saskatchewan's prolific Athabasca Basin is once again taking center stage in this week's mining headlines, with more positive exploration results out of the Patterson Lake South (PLS) property and further land acquisitions in the area.

Monday, Alpha Minerals (TSXV:AMW) and its joint venture partner, Fission Energy (TSXV:FIS), reported radioactivity results from the final 10 drill targets of their winter 2013 exploration program at the PLS property. Further drilling at the R00E zone has extended the strike length of high-grade mineralization to more than 120 meters, with widths of up to 50 meters. Highlights include hole PLS13-059, which intersected 26.5 meters of mineralization (55 to 86 meters), with a total of 9.9 meters of off-scale (>9999 cps) radioactivity, including a 6.5-meter section of continuous off-scale radioactivity.

Skyharbour Resources (TSXV:SYH) completed its acquisition of a 100-percent interest in 285,000 acres in the Patterson Lake region, which is strategically located near the PLS uranium discovery. In total, the company has acquired six properties, totaling 388,000 acres, in the region.

Aldrin Resource (TSXV:ALN) entered into an option agreement to acquire a 70-percent interest in the Triple M uranium property, which is located in the Patterson Lake region. The 12,001-hectare property borders the PLS property 9 kilometers south to 11 kilometers west of the recent discovery. The press release notes that the property contains: a segment of the Patterson Lake fault along strike from the discovery at Patterson Lake; a segment of a southwest-trending fault zone parallel to and south of the one at Patterson Lake; and a segment of a southwest-trending fault zone parallel to and northwest of the one at Patterson Lake. The company stated that it has commenced a technical report describing the Triple M uranium property.

TAD Mineral Exploration (TSXV:TJ) acquired about 4,000 hectares of prospective land through staking in the vicinity of the PLS prospect. The company plans to put boots on the ground shortly.

Zadar Ventures (TSXV:ZAD) entered into a purchase agreement to acquire a 100-percent interest in the BullRun uranium project in the Southwestern Athabasca Basin. The BullRun project is comprised of three claim groups totaling 9,185 hectares. Block A is located 30 kilometers north of the PLS property and 40 kilometers south of the Shea Creek uranium deposit. Block B is located 50 kilometers east of PLS and 50 kilometers west of the Centennial uranium deposit. Block C is located 12 kilometers west of the Centennial uranium deposit.

Kivalliq Energy (TSXV:KIV) discovered "radioactive mineralization associated with a geophysical conductor located between, and along strike from, the Eastern Extension and J4/Ray Zones" at the 340,268-acre Angilak property in Nunavut, Canada. Phase 1 of the 2013 exploration program will continue through June and will include approximately "3000 metres of NQ core, with one diamond drill rig, on advanced targets within the Lac 50 Trend and new targets such as Dipole and VGR located on the western side of the Angilak Property," according to the company's press release.

Paladin Energy (TSX:PDN,ASX:PDN) released its Quarterly Activities Report for the first quarter of 2013. Highlights include strong sales revenue of US$106 million for the quarter and sales of 1.92 million pounds U3O8 at an average price of $55.22 per pound. Langer Heinrich production totaled 1.23 million pounds U3O8 while production at Kayelekera totaled 761,992 pounds U3O8. Production guidance for 2013 (8 to 8.5 million pounds U3O8) remains well on target.

Energy Fuels (TSX:EFR) is looking to restore the Sheep Mountain uranium mine, a past-producing open-pit and underground mine in Wyoming. Construction of an on-site processing facility is planned for spring 2014 and mine construction could start in late 2015, despite the fact that the company is awaiting federal and state regulatory clearance and needs about $60 million in start-up costs, the Casper Star-Tribune reported. Sheep Mountain has a projected mine life of 15 years and is expected to produce 1.5 million pounds of uranium annually. Once operational, the project will be Energy Fuels' second production facility, behind the White Mesa Mill in Utah.

[Tommy]

Uranium Spot Price Stability Sign of a Turnaround?

http://www.u3o8.biz/s/MarketCommentary.asp?ReportID=579621&_Type=Market-Commentary&_Title=Uranium-Spot-Price-Stability-Sign-of-a-Turnaround

The uranium spot price remains stable, trading at $42.25 per pound U3O8 for the third consecutive week, according to industry consulting firm TradeTech. "Current demand is highly discretionary with several buyers watching activity closely and evaluating possible entry into the market," reported the firm. "Although buying interest has been light, sellers are not aggressively pursuing sales and have shown little willingness to drop prices in order to attract buyers."

Ux Consulting, which has kept its weekly spot price at $42.25 per pound U3O8 for five consecutive weeks, noted that this is "the longest time period that the weekly indicator has been unchanged since the summer of 2008," reported Platts. Ux analysts believe the "stabilized price level" may lure utilities back into the market this month despite the fact that April is seasonally slow.

Toro Energy's (ASX:TOE) US$281-million Wiluna uranium project has received approval from Australia's environment minister, Tony Burke, reported AFP. The first uranium mine in Western Australia, the project is comprised of two open pits and a processing plant. Wiluna has an expected mine life of 14 years with an anticipated annual production of about 780 metric tons (MT) U3O8. Toro's goal is to put the mine into production by 2015, but the company is looking for a joint venture partner, according to International Business Times.

In Canada, Quebec's government has temporarily halted uranium development in the province and plans to hold a public hearing on the uranium sector, CBC News reported. The move puts the brakes on Strateco Resources' (TSX:RSC) Matoush uranium project, the most advanced in the province, and the company's stock price has taken a huge hit following news of the moratorium, down more than 70 percent.

The news came the same week as Brad Wall, premier of Saskatchewan, called for the federal government to rethink limits on foreign ownership for uranium companies. "Let's open it up for other companies around the world that want to expand here and create jobs," Wall told Bloomberg. However, he stressed that foreign ownership rules should still rely on the "net benefit test," which he employed in 2010 to block BHP Billiton's (ASX:BHP,NYSE:BHP,LSE:BLT) $40-billion takeover bid for Potash Corporation of Saskatchewan (TSX:POT,NYSE:POT). Wall also stated that he "would like to see" Areva's (EPA:AREVA) uranium holdings exempted from foreign ownership limits.

Japan's Ministry of Economy, Trade and Industry estimates that nuclear power plant shutdowns are costing utilities 1.2 trillion yen (US$13 million) annually. Japan Atomic Power has suffered the most due to the shutdowns and recently secured 100 billion yen in loans from Japanese financial institutions, including the Development Bank of Japan and Mizuho Corporate Bank, according to a Power Engineering report. The company is expected to require additional financial support given that the timing of nuclear restarts is still uncertain.

The island nation's Nuclear Regulation Authority is set to unveil new standards in July and later in the fall anticipates restarting reactors that pass safety inspections. "Securing economical and stable energy is a necessary condition for promoting the nation's industrial competitiveness and stimulating economic recovery," said Prime Minister Shinzo Abe at a Council on Economic and Fiscal Policy meeting last week. Attendees at the Industrial Competitiveness Council's meeting, also last week, showed concern about stable energy supply, a shortage of which could "severely damage companies' competitiveness," reported the Washington Post News Service.

The news agency said sources close to the prime minister have intimated that as many as 30 of the 48 idled nuclear reactors could be reactivated in the future if the federal government can win local public support. The issue could become a key campaign plank for the upcoming House of Councillors election this summer.

Japan's crippled nuclear power industry is also having a negative impact on the uranium enrichment industry. Urenco, the world's second-largest nuclear fuel supplier, has said it anticipates "reduce[d] demand for [its] services" even once operations restart in Japan, according the The Times. However, the company sees market growth for enriched uranium coming from India, China, Vietnam and Indonesia and still plans to almost double its production capacity over the next two years.

Urenco is owned jointly by the UK and Dutch governments as well as two leading German utilities, RWE (ETR:RWE) and E.ON (ETR:EOAN). All four parties are now looking to sell the $15-billion company. A sale could be finalized as early as this year, sources told The Wall Street Journal. France's Areva and Canadian miner Cameco (TSX:CCO,NYSE:CCJ) are said to be potential suitors; both companies have hired investment banks to advise on a possible transaction. Canada Pension Plan and several private-equity firms may also be considering a potential bid.

Company news

Monday, Alpha Minerals (TSXV:AMW) reporteda> additional drill results from its delineation drill campaign at the recently discovered R780E zone on its Patterson Lake South property in the Athabasca Basin, Saskatchewan. Highlights include drill hole PLS13-060, which intersected eight radioactive intervals ranging in strength from moderate to strongly radioactive and in width from 0.5 to 41.5 meters. Four of the mineralized zones include discrete narrow intervals of off-scale (>9999 cps) radioactivity, and mineralization occurs down to 258.5 meters, the deepest mineralization encountered to date on the Patterson Lake South property. An ongoing field program including 9,000 to 10,000 meters of drilling is in progress and is expected to continue into early April.

On Wednesday, Alpha Minerals announced that it has doubled the strike length of the high-grade R390E zone at Patterson Lake South to 60 meters. The news release reports the results from four additional step-out drill targets on the R390E zone. Highlights include drill hole PLS13-066 (L420E), which intersected 64 meters of moderate to strong radioactivity (81.5 to 145.5 meters) with a total of 5.57 meters of off-scale (>9999 cps) radioactivity. The current winter drill program planned is nearly complete. An extensive follow-up drilling program for this zone is planned for summer 2013.

Tuesday, Canadian International Minerals (TSXV:CIN) acquired a 50-percent interest in eight claims totaling 34,762.177 hectares in the Patterson Lake South uranium district. The other 50 percent of the newly acquired claims are owned by Tyko Resources. This latest acquisition brings the company's total land holdings in the Patterson Lake South region to 59,987.177 hectares of mining claims.

Also on Tuesday, European Uranium Resources (TSXV:EUU,OTCQX:EUUNF) provided progress updates on its wholly owned Kuriskova uranium deposit in Slovakia and its wholly owned Asento exploration project in Finland. In March, European Uranium was awarded a three-year exploration license for the Asento project, which covers 3,556.6 hectares. The company is planning a summer exploration program.

By the end of 2014 or the first quarter 2015, the company expects to have completed a feasibility study on the Kuriskova project. Working toward this goal, in 2012 European Uranium completed a drill program for obtaining samples for metallurgical test work. Those samples have been shipped to Areva's laboratory facility in Bessines, France. In the first half of this year, the company has focused on metallurgical test work and environmental programs, including baseline data collection and stakeholder engagement, in order to better facilitate the permitting process.

Lakeland Resources (TSXV:LK) added to its uranium exploration portfolio in the Athabasca Basin by acquiring two uranium projects by staking in the northern region. The two projects, the Otherside property and the Riou Lake property, are comprised of 10 mineral claims totaling 45,103 hectares along the south shore of the Fond du Lac River. Lakeland will examine and compile all available historic and related mineral exploration data associated with the acquired projects in anticipation of an exploration work program.

[Pro-Life]

INFOGRAPHIC: Uranium supply and uranium demand
Michael Allan McCrae | April 1, 2013

Visual.ly published this sharp looking uranium map showing output by country and how much each country is consuming.

Data is derived from World Nuclear Association and the Nuclear Regulatory Commission.

[Tommy]

Uranium Mining Overview

http://www.world-nuclear.org/info/Nuclear-Fuel-Cycle/Mining-of-Uranium/Uranium-Mining-Overview/#.UV2bysrX-9u

[Tommy]

Emerging Uranium District in Saskatchewan's Patterson Lake Region

http://www.u3o8.biz/s/MarketCommentary.asp?ReportID=578367&_Type=Market-Commentary&_Title=Emerging-Uranium-District-in-Saskatchewans-Patterson-Lake-Region

[Tommy]

Japan's Nuclear Woes Still a Key Factor in Uranium Market

http://www.u3o8.biz/s/MarketCommentary.asp?ReportID=577476&_Type=Market-Commentary&_Title=Japans-Nuclear-Woes-Still-a-Key-Factor-in-Uranium-Market

The uranium sport price remains unchanged from last week's indicator of $42.25 per pound U3O8, according to TradeTech. "Currently, spot uranium supply and demand are relatively in balance, with neither buyers nor sellers highly motivated to conclude transactions," the industry consulting firm reported.

Nuclear parts supplier Japan Steel Works (TSE:5631) is considering partnerships in Southeast Asia and India in order to gain access to export markets for strategic products related to nuclear reactor construction, reported Bloomberg Businessweek. Such partnerships are important to the future success of the company given the demand outlook in Japan following the Fukushima disaster.

"Given that it will be difficult for the company to expect demand in Japan, the key is to what extent they will be able to secure overseas projects, especially in China," Ryo Tazaki, an analyst at Nomura Securities in Tokyo, told reporters.

Ongoing problems at the disaster-stricken Fukushima Daiichi nuclear power plant aren't helping Japanese citizens' perception of the safety of nuclear power. A recent power outage Monday left four fuel storage pools without fresh cooling water; however, power was restored about 24 hours later, reported The New York Times. Tokyo Electric Power (TSE:9501), the plant operator, blamed the issue on a faulty switchboard --- Wednesday, a spokesman said a rat may have been to blame --- and assuaged fears of catastrophe by explaining that the temperatures in the fuel pools can remain at safe levels for at least four days.

Transatomic Power may have an answer to the problems inherent at Fukushima Daiichi. Engineers at the MIT-associated firm are developing molten-salt nuclear reactor technology that could dramatically cut costs while mitigating the risks associated with nuclear power, reported MIT Technology Review. "A conventional nuclear power plant is cooled by water, which boils at a temperature far below the 2,000 °C at the core of a fuel pellet," explains writer Kevin Bullis in a recent article. "Even after the reactor is shut down, it must be continuously cooled by pumping in water. The inability to do that is what caused the problems at Fukushima: hydrogen explosions, releases of radiation, and finally meltdown. Using molten salt as the coolant solves some of these problems ... In the event of a power outage, a stopper at the bottom of the reactor melts and the fuel and salt flow into a holding tank, where the fuel spreads out enough for the reactions to stop. The salt then cools and solidifies, encapsulating the radioactive materials."

The new reactor design is "highly resistant to meltdowns" and "relatively small, yet powerful." It could be built in factories rather than onsite and is can reappropriate nuclear waste as fuel. Transatomic Power estimates a plant can be built for $1.7 billion --- about half the cost per megawatt of traditional plants. The design only exists on paper for now as the company estimates that it would take at least eight years to build a prototype. MIT Technology Review also reported that China is planning to construct a 2-megawatt molten-salt test reactor by 2020.

Research report projects increase in nuclear demand

GlobalData has issued a new report forecasting a 30-percent rise in global nuclear energy generation --- "from 2,386,449 GWh in 2012 to 3,078,130 GWh in 2020." The research and consulting firm credits the increase to the commissioning of an estimated 198 nuclear reactors over the next decade. "The escalating need for power, combined with soaring fossil fuel prices, is driving the demand for nuclear energy around the world --- especially amongst rapidly developing countries where large scale alternative energy generation is impractical," states the press release.

Uranium sector heavies push Canada to change foreign ownership policy

Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO), Areva (EPA:AREVA) and Paladin Energy (ASX:PDN,TSX:PDN) are lobbying the Canadian government to relinquish foreign ownership restrictions on uranium mines, reported The Sydney Morning Herald. The push for policy change has the backing of the Australian government as well as the Canadian provinces of Saskatchewan and Newfoundland and Labrador. While there are no restrictions on foreign participation in exploration, Cold War-era legislation limits foreign companies to no more than 49 percent of ownership in Canada's uranium mines.

Canadian Natural Resources Minister Joe Oliver said the government isn't planning on changing the "longstanding policy," reported Reuters.

Company news

Monday, Alpha Minerals (TSXV:AMW) and its joint venture partner, Fission Energy (TSXV:FIS), announced the discovery of a third zone of uranium mineralization and off-scale radioactivity at the Patterson Lake South property in the Athabasca Basin, Saskatchewan."Results at the R780E Zone expand significantly strike extent of uranium mineralization at Patterson Lake along the main target corridor of conductors associated with a resistivity low anomaly," states the news release.

Tuesday, Alpha Minerals announced highlights from 10 additional step-out drill targets in the R00E zone at the Patterson Lake South property. "All 10 holes intersected anomalous radioactivity, with 8 holes intersecting significant mineralization, including 6 holes intersecting variable amounts of off-scale radioactivity," notes the press release. To further explore and evaluate this new discovery, the company has planned for additional drilling to take place prior to the completion of the current winter program.

Yellowjacket Resources (TSXV:YJK) inked a deal to acquire eight additional mineral claims, collectively known as the Orr Peninsula uranium property, totaling 61,452 acres. The company is the largest mineral claim holder in the Patterson Lake area, with approximately 95 percent of its 391,142 acres of Athabasca Basin uranium exploration claims in the Patterson Lake region. The new claims are contiguous with the company's Patterson Lake South claim group in the Athabasca Basin area of Saskatchewan.

Canadian International Minerals (TSXV:CIN) acquired a 100-percent interest in 20 claims totaling 25,225 hectares of land in the Patterson Lake South uranium district. "The claims were staked for their proximity to the [Patterson Lake South project under exploration by Alpha Minerals and Fission Energy] and interpreted favourable geology for the occurrence of PLS style uranium mineralization," states the news release. The company is acquiring further claims in the area as well.

Strathmore Minerals (TSX:STM,OTCQX:STHJF) announced that the US Forest Service has published the Draft Environmental Impact Statement (DEIS) for the company's Roca Honda uranium project in New Mexico. The Roca Honda project is a joint venture between Strathmore (60 percent) and Sumitomo (TSE:8053) (40 percent). Completion of the Final Environmental Impact Statement and the Roca Honda mine permit Record of Decision are expected later this year.

Forsys Metals (TSX:FSY) announced the results of percussion drilling and metallurgical testing at its Norasa uranium project in Namibia, Africa. The results indicate that Forsys will be able to achieve an overall plant recovery exceeding 88 percent, an improvement over the previous technical report released in January 2010.

[Tommy]

INN VIDEO: Jeb Handwerger on the Potential for More US Uranium Mines

http://uraniuminvestingnews.com/13910/inn-video-jeb-handwerger-united-states-uranium-mines-pdac-2013.html?utm_source=Resource+Investing+News&utm_campaign=4223a3565e-RSS_EMAIL_CAMPAIGN&utm_medium=email

[Tommy]

Nuclear Power Capacity Shows Signs of Growth Two Years Post-Fukushima

http://www.u3o8.biz/s/MarketCommentary.asp?ReportID=575580&_Type=Market-Commentary&_Title=Nuclear-Power-Capacity-Shows-Signs-of-Growth-Two-Years-Post-Fukushima

The uranium spot price is unchanged from last week, trading at $42 per pound U3O8, according to TradeTech. The industry consultant also reported that "most buying interest remains discretionary in nature and spot supply is sufficient to meet existing demand." The slow start to restarts in Japan's nuclear power program may further dampen spot prices.

The two-year anniversary of the Fukushima nuclear disaster is approaching, and Japan's idled nuclear power plants aren't expected to come back online in 2013. That's because "broader safety measures under the new standards are expected to make it difficult for inspections to be completed by the end of the year," MarketWatch reported.

Backing that statement up, Japan's prime minister, Shinzo Abe, told parliament on Tuesday, "[t]here won't be any resumption of nuclear power plants without safety approval."

Uranium spot prices may be stuck in a slump post-Fukushima, but the nuclear power industry is showing signs of recovery. The International Atomic Energy Agency (IAEA) has issued a report that marks 2012 as a year of renewed growth in global nuclear power generation capacity. The IAEA notes in the report that it did expect growth to slow following the disaster, but not to "reverse" direction. The agency's report shows that this prediction turned out to be apt: total nuclear power electricity generation for 2012 was 372.5 gigawatts, up 3.7 gigawatts from 2011. A total of seven new reactors are presently under construction in China, South Korea, Russia and the United Arab Emirates. The IAEA forecasts that by 2030, nuclear power capacity will grow by between 23 and 100 percent.

Westinghouse, which is owned by Toshiba (TSE:6502), and Russia's Rosatom are competing for a contract to build two new reactors at the Temelin plant in the Czech Republic. Projected to cost at least $10 billion, the project is considered "the most lucrative [nuclear] contract on offer anywhere in the world," reported Alaska Dispatch.

Vietnam's Song Da, which is overseeing the construction of the nation's first nuclear power project, announced that it will soon send 2,000 employees, including engineers, to Japan and Russia for training. Vietnam plans to build 13 nuclear power reactors by 2030, according to Energy Business Review, with an anticipated capacity of 15,000 megawatts. The first two plants, Ninh Thuan 1 and Ninh Thuan 2, are slated for operation by 2021.

France's GDF Suez (EPA:GSZ) and Japan's Itochu (TSE:8001) and Mitsubishi (TSE:8058) have placed a joint bid to construct Turkey's second nuclear power plant, and may bid on the third plant as well, reported the Hurriyet Daily News. Companies from South Korea, China and Canada are also in the running for the $25-billion contract, with China and the French-Japanese group being the "front-runners." The 5,000-megawatt power plant will be built in the Black Sea province of Sinop.

Jordan is set to award a nuclear reactor construction contract next month to either Rosatom or a another French-Japanese consortium led by AREVA (EPA:AREVA) and Mitsubishi, reported the Financial Times on Wednesday. The contract involves building two 1-gigawatt nuclear reactors near Jordan's capital city.

Canada and India are soon expected to sign a nuclear cooperation agreement that will include the sale of high-quality Canadian uranium, reported The Times of India. The two countries entered into a Nuclear Cooperation Agreement in 2010, and in November 2012, prime ministers Stephen Harper and Manmohan Singh decided to start implementing the agreement. The uranium sales arrangement is awaiting India's approval, but Canadian officials are confident that will come through in the near future. India also reached a similar agreement with Kazakhstan this week; it allows for sales through 2014.

The long-awaited opening of Cameco's (TSX:CCO,NYSE:CCJ) Cigar Lake uranium project is finally on the horizon, reported The Globe and Mail on Tuesday. Mining is slated to commence in mid-2013 and will be followed by first production from the mill, according to Cameco's CEO, Tim Gitzel. Cigar Lake has an expected mine life of 20 to 30 years, with grades upwards of 100 times the world average.

Company news

Last week, a US district court denied a conservation group's request to halt construction at Ur-Energy's (TSX:URE,AMEX:URG) Lost Creek uranium project in Wyoming. The company plans to begin production this year. The case was brought by the Biodiversity Conservation Alliance, which has also filed a suit against the Bureau of Land Management High Desert District. Ur-Energy announced on Tuesday that construction plans remain on schedule.

Uranium Energy (AMEX:UEC) announced an inferred resource estimate for its Burke Hollow ISR project in Texas. Drill results show an inferred resource of 3.03 million tons grading 0.047-percent U3O8 and containing an estimated 2.9 million pounds of U3O8 at a U3O8 cut off of 0.02 percent.

Forum Uranium (TSXV:FDC) commenced a 3,000-meter drill program at its NW Athabasca joint venture project located in Saskatchewan's Athabasca Basin. "To date, uranium mineralization has been intersected at the historical Zone 2A (2.48% U3O8 over 1.5 metres) and on two gravity targets (Opie and Barney) out of five targets investigated by two drill campaigns in 2012. There still remain 12 untested targets on the property," states the news release.

Kivalliq Energy (TSXV:KIV) filed a revised NI 43-101 independent technical report updating the resource on its Lac 50 Trend project in Nunavut, Canada.

Kivalliq also announced preliminary metallurgical test results for the Lac 50 Trend uranium deposits. "Optimized results from alkaline leaching indicate that 94.1% of uranium can be extracted in 48 hours and 95.9% of uranium extracted in 72 hours," states the press release.

Energy Fuels (TSX:EFR) reported that the Colorado Department of Public Health and Environment (CDPHE) "affirmed the decision of an appointed hearing officer in an administrative process required for the reissuance of the radioactive materials license for the Company's Piñon Ridge Mill." The company expects the CDPHE to issue a new license decision on the Piñon Ridge mill by the end of April 2013.

U3O8 (TSX:UWE,OTCQX:UWEFF) signed a joint venture agreement with Avocet Resources (ASX:AYE) to explore U3O8's wholly owned Sierra Cuadrada project, which is located in Argentina. Avocet, which will manage the project, may earn a 51-percent interest by contributing $1 million in exploration expenditures over a maximum four years.

[Tommy]

No More Nukes? Don’t Bet on It

http://emerginggrowth.com/featured_stories/no-more-nukes-dont-bet-on-it/02/21/2013

The Fukushima disaster in March 2011 was a watershed in nuclear power generation. When the tsunami badly damaged the Fukushima reactor and resulted in radiation release, the Japanese government shut down its nuclear reactors. Even more significant, Europe also reacted strongly to the accident, with Germany announcing plans to end all nuclear power generation within a decade and other nations halting consideration of new facilities. As late as September 2012, Japan announced that it would end all nuclear power generation within 30 years. This was a complete reversal of course for a resource-poor nation that had planned to increase its nuclear capacity to half of its electricity requirements by 2030. Yet, with a new government now in power after mid-December elections, it appears Japan will return to nuclear power. The Minister of Economy, Trade, and Industry announced in early January that the government favors restarting reactors assuming that they are inspected and blessed by the newly-created Nuclear Regulation Authority

So what does that mean from an investing standpoint? Japan has been one of the largest markets for uranium thanks to its extensive investment in nuclear power. Should its reactor fleet begin restarting, that will be enough to drive the spot price of uranium higher. That will be good news for uranium producers. All of these companies are a bit beaten down right now thanks to the condition of the global uranium market over the past couple of years, but brighter prospects should be ahead. All of these companies operate in the U.S., so they are not subject to the geopolitical risks that affect production in many parts of the world.

Uranium Resources, Inc. (NASDAQ: URRE) is the first small-cap uranium company we’ll consider. It has about 183,000 acres containing an estimated 101.4 million pounds of mineralized uranium in place in Texas and New Mexico, plus two processing facilities in Texas. With a last close at $3.11, it is currently 74.30 percent off its 52-week high but 21.96 percent off its 52-week low. The company has had troubled earnings results for the past few years, but it has steadily cut costs and should be on track to benefit from rising uranium demand. It also completed the acquisition of Neutron Energy, Inc. on August. 31, 2012.

USEC, Inc. (NYSE: USU) is another producer of low-enriched uranium for use in commercial power reactors. It currently services about 150 plants worldwide. It last closed at $0.55, 17.02 percent off its 52-week low and 65.41 percent off its 52-week high. Its EPS performance was positive until 2011, when it was punished by events in Japan. However, in Q3 2012 it brought earnings for the quarter positive again. Although it anticipates a loss for 2012, much of that loss will be special charges. USEC recently raised its projected cash flow from operations from $30 million to $60 million. It also announced on February 11 that it will be selling one of its subsidiaries, NAC International, Inc., for $45 million.

Uranerz Energy Corp. (NYSE: URZ) controls 87,414 acres and holds an 81 percent interest in 62,152 acres owned by Arkose Mining Venture, all in the U.S. (Its owned property is in Wyoming.) It is primarily a mining operation. The last close was $1.40, 29.63 percent off its 52-week low and 51.05 percent off its 52-week high. Of the three options discussed here, Uranerz is most favored by analysts. Thomson Reuters rates it neutral and Second Opinion recently upgraded its long recommendation on January 22. The company will take a hit from changing its accounting treatment of some construction at its Wyoming site which was improperly capitalized and that may provide an even better buy opportunity if its share price dips as a result.

None of these companies is particularly pretty at the moment. However, the change of attitude toward nuclear power in Japan is sudden and recent, so the potential benefits for uranium producers should still be under the radar at the moment. This is a good opportunity to pick up one or more of them cheaply.