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Uranium, a Raging Bull

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I personally can't see how there could be any conclusive positive news from Cigar Lake in a couple of weeks.
They are currently drilling holes to an access tunnell and plan to fill it with concrete to try and plug the flow downstream. Up to Christmas the had only completed one hole with another 17 planned although they are working 27/7.
"Drilling through the Athabasca sandstone has been more challenging than anticipated," said Terry Rogers, Cameco's chief operating officer. "However, the experience we gain in the first few holes is expected to accelerate progress in the future."
This will be only phase 1 (expected to be finished in Jan???) of repairs and with all plans subject to Government regulations for safety reasons . . it could be a slow process.

So what can we expect from them in a couple of weeks? They will have a cost estimate for repairs but as for a timeframe, I`m not sure they will know that until they can safely go down and have a look. A year at best . . it`s been 4 months already :2twocents

For those interested in Cigar Lake, I`ve attached a .pdf on their plans to extract the uranium. It`s quite long and detailed but worth a look.
 

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From HC, Fox Sky News had a report on uranium. The following companies are on the analyst's recommendation list:

PEN, CMR (twice), ARU, AGS, MTN

I guess the program was pre-recorded before GGY sold the Oasis asset to MGA.TO because EDGAR recommended GGY because the Oasis uranium assets. Stupid GGY makes EDGAR looks stupid.

I have not watched this program, can anyone verify this? Thanks.
 
DAVID SPEERS: The spot price for uranium has doubled over the past year, sending the share prices of the 50-plus Australian uranium explorers soaring along with it.

But for those of us that haven't bought into the sector, is there still value or have we missed the boat?

Richard Goncalves spoke with the experts, and discovered some prospective buys in this special Sky News Sunday Business report.

RICHARD GONCALVES, SKY REPORTER: It's a sector that may provide some exciting prospects - for investors - and the nation.

MICHAEL ANGWIN, AUSTRALIAN URANIUM ASSOCIATION EXECUTIVE DIRECTOR: "We're on the verge of a major economic opportunity."

GONCALVES: Already, 16 per cent of the world's electricity is generated from nuclear power and that's expected to grow dramatically.

ANGWIN: "In the next 25 years, demand for electricity consumption around the world, for power generally and for uranium will increase by 50 per cent."

GONCALVES: Australia is in prime position to take advantage of the world's insatiable appetite, with 85 known deposits and almost half of the world's known uranium reserves.

ANGWIN: "We currently export around 12 500 tonnes of uranium a year, and the prospect is of doubling that in the next 7 to 8 years."

GONCALVES: That's still below the 80 000 tonnes of uranium in demand per year globally and is expected to grow by 120 000 tonnes per year by 2020.

But despite the demand there are some stumbling blocks.

Government legislation restricts new mines from extracting uranium apart from the three existing players: BHP Billiton's Olympic Dam, potentially the largest uranium producer in the world; Rio Tinto's ERA Ranger Mine in the Northern Territory; and General Atomics' Beverly mine in South Australia. Uranium One's Honeymoon project is set to come on stream. It was awarded a license by the South Australian government's environmental agency to commercially mine the deposit.

Despite the ongoing debate on uranium enrichment, its cost effectiveness, cleanliness and waste storage, the federal government's Nuclear Taskforce Review found no sound reasons to prevent uranium mining in Australia.

In fact, Prime Minister John Howard has gone as far as to call the labor state governments, namely Queensland and Western Australia, to end bans on uranium mining as a result.

PETER RUDD, CARROLL PIKE PIERCY ANALYST: "And while that's in place, anybody that does find something won't be able to bring it into production and hence won't be able to make money from it."

GONCALVES: The ALP will review their policy - in a conference in April.

In the meantime, the uranium spot price continues to soar - doubling from $US36 a year ago and is expected to stay on its upward trajectory.

HENRY EDGAR, WILSON HTM ANALYST: "We view this as a re-emerging industry, and not a bubble that's waiting to pop."

PETER ARDEN, INTERSUISSE ANALYST: "We had low interest rates worldwide, we had uranium spot price bottoming out and starting to rise for the first time in 7 years, so that was important, and then the realisation that uranium offered a solution for global warming, it's only really just started to lift."

GONCALVES: Analysts' estimates range from a 10 per cent, to 100 per cent lift in spot prices this year.

EDGAR: "We do not think the market will peak until 2010. At that point we would expect some of the production that we've seen talked about by the current day explorers to come online and start to satisfy. But that doesn't take into account some of the extra demand that will come into the market from the forecast amount of reactors that will pop up all around the world."

GONCALVES: Some explorers have already caught the uranium wave, with Paladin and Summit Resources two of the market winners last year.

Shares in Summit climbed 436 per cent, while Paladin catapulted by 351.

But analysts say, there's still some value out there.

RUDD: "A number of those have run, so we need to look at the ones that haven't, one of those is Peninsula Minerals. It has leases for uranium and molybdenum, in South Africa of all places, and I think that is closer to home here, is Compass Resources which has its Mount Fitch deposit in the northern part of the Northern Territory."

ARDEN: "Our three favorites are Arafura Resources in the Northern Territory, with its Nolans Bore project particularly and the spin out of new power. We like Alliance Resources, it's in the Arkaroola project in South Australia right next to Beverly, and we also like Compass Resources, they hold a substantial position in the Northern Territory. The Mount Fitch deposit is coming up very well and they've got the old Run Jungle Mine."

EDGAR: "So some of the companies we've been looking at is Glengarry Resources in Queensland. They obviously have to overcome a political hurdle, but they have the characteristics of open cut mining and easy extraction. Another player to look at would be Marathon Resources. They're in South Australia. They are of course used to having operating mines in that state, they have a resource that is very similar in nature to Olympic Dam, so easy bulk mining techniques and in a state that's acceptable of mining."

GONCALVES: And if none of those take your fancy, then what about one of 5 that are expected to list on the stock exchange sometime early this year: Bowen Energy; Empire Resources; NuPower Resources; Warwick Resources; and Yellow Rock Resources.

There's no stopping these explorers from extending their arm to the market, in search of funds for their projects.

But, as with any investment, there are risks.

ANGWIN: "Among the issues are skills shortages, transport issues, regulatory issues and access to shipping and that's certainly the kind of agenda that many industries have had to deal with to become efficient and profitable industries."

GONCALVES: The biggest issue is access to land, with restrictions placed because of native title and government policies.

ANGWIN: "I'm sure the government has this well in hand, but what we'd like to see is the consolidation of all the findings of all the reports before it into a single framework for the development of the uranium industry on a sustainable basis."

Richard Goncalves, Sky News Sunday Business, Melbourne
 
Hi Lancer,

Yeah might have jumped the gun a bit, the link is from a Canadian newspaper . . UxC still showing $72 ???? :confused:
 
I was hoping they slipped up, usually it is released at the end of the week. I have heard $75 from a couple sources but I dont think that is official...
 
Having seen the river of red after the qtr ann. from AGS, ACB, BMN, PNN, URA, BKY, EME, SMM.....

Not a good sign in short term for uranium stocks unless some dramatic and powerful news coming out....
 
spooly74 said:
Uranium up $3 to $75

http://www.uxc.com/review/uxc_Prices.aspx
Click to expand...

interesting that in ABNs recent research on PDN they have used US$95/lb... now if thats the conservative view of a broker....!!!

ABN Amro rates the stock as Hold - As expected, Langer Heinrich has experienced the odd teething problem, but this has not deterred either PDN or the broker. Production will be slightly less, but in the meantime the broker has increased the target from $6.47 to $8.60 on a US$95/lb uranium forecast.
Click to expand...
 
What are the pros and cons of the cigar lake update which is due next week? Most are anticipating at least another years delay. What is the prognosis on a positive update versus negative update?

Just trying to get a feel for what impact the announcement will have on our local stocks.
 
Very interesting today. Almost all uranium stocks have got a big hit except PDN and SMM (have Northern America exposure).

It seems that the long waited uranium pull back is well on the way. It is official started right after the qtr reporting season. The million dollar question is for how long? I hope this one is a short one, but short one always be a sharp one. So be prepared..
 
Hello ASF community,

As a cherry-busting exercise, I thought it may be somewhat instructive to re-visit an article from the Australian newspaper, dated 27/10/06 and headed 'Uranium's glow waning, investors warned'.

In the article, (sorry, no link, only have hardcopy) Robin Brumby sought out the wisdom of Warwick Grigor of Far East Capital fame, who cast his eye over ASX-listed U stocks (as is his want), their prices as at 24/10/06 and his rating of them as a buy.

In coming to his conclusions, Grigor looked at:

"the size of the known resource, the market capitalisation per pound of uranium in the ground and exploration results."

He states that:

"investors should pick out the companies with sizeable deposits with the potential for between 25,000 and 50,000 tonnes of uranium."

Further, he warns that some of the

"beat-ups designed to drive the share price",

include

"drilling right beside an old hole that had good grades ... and reassaying previous drilling."

In looking back at his article, it is important to recognise at least 3 things:

1. 3 months in the markets is arguably at least as long as a week in politics;

2. not all currently ASX-listed U stocks were listed as at 24/10/06; and

3. the spot price for uranium has, in the time since this article breathed life, risen from US$56 to US$75 per lb.

On to his 3-month plus 'old' conclusions:


SP (as at 24/10/06) Rating as a buy

Producers

ERA $15.51 reasonable
PDN $5.48 fair

Potential producers

AEX $.39 good
ARU $.37 fair
BKY $.73 fair
CMR $4.47 very expensive
DYL $.18 very expensive
EME $2.00 fully priced
MEE $.061 excellent
MRO $1.42 good
NEL $1.70 sound
OMC $.66 fully priced
PNN $.68 fully priced
SCX $.05 fair
SMM $2.04 good
UNX $.62 reasonable

Advanced explorers

ACB $.58 reasonable
ALB $1.39 fair
AGS $.93 fully priced
BMN $1.15 expensive
EVE $.098 good
GGY $.047 good
MTN $.84 inexpensive
SRZ $.29 good
TOE $.74 overpriced
UEQ $.45 reasonable
UKL $.38 fair
WME $.14 fully priced

Grassroots explorers

ARM $.235 fair
BLR $.06 fully priced
CTS $.41 expensive
CUY $.58 reasonable
ENE $.47 upper end of value
EXT $.067 expensive
GIR $.34 fully priced
GBE $.47 fair
IVK $2.95 fully priced
KOR $.23 fair
MRU $.30 fair
MDX $.15 inexpensive
MUR $.055 fair
NRU $.315 fair
NTU $.20 good
PEN $.027 good
RTM $.022 fair
SIM $.495 good
SAU $.28 fair
SRK $1.78 expensive
TAS $.145 fair
THX $.46 fully priced
UTO $.545 fully priced
URA $.35 geo-political risk
UXA $.395 expensive
UOG $.135 fair
USA $.255 fair
WMT $.02 good


Note: At the time of the article, Grigor was chairman of MRO, a director of PEN and a shareholder in WMT.

Note further: I am neither a chairman, director nor shareholder, sadly, in any of the above stocks at the time of this posting.

cheers :)
 
happytown - great cherry busting exercise! I think Grigor revised this report in December too

I have added to your work below, calculating the % change from Oct06 prices (as of 30mins ago) - 1st column of percentages, and % off 52 week high (2nd column of percentages) and listed the stocks according to Grigors ratings from cheap to very expensive...

So MTN was rated cheap but has since jumped 290% and at all-time highs.
DYL rated v.expensive, still jumped 136% but is now 30% of all-time highs

How to find value / opportunities in this table assuming Grigor got it right? Not sure but maybe one way is.....

Stay away from expensive stocks - particularly those that have had large increases DYL, BLR (although there may have been announcements that have changed their situation? BMN?). Also THX, UXA may have come off enough to justify a look?

In the value stocks (good / fair) look for those that haven't run much or have come off quite a lot from their highs - this would lead you to MDX, SRZ, CUY, NRU but then you would need to check to see if developments in last 4 months justify their relatively poorer performance.

have fun!!


Symbol // % frm Oct06 // % off 52-wk high // Grigor Rating

MTN.AX 290% 0% inexpensive
MDX.AX 20% 25% inexpensive
MEE.AX 138% 24% excellent
WMT.AX 475% 0% good
NTU.AX 215% 32% good
PEN.AX 211% 13% good
EVE.AX 186% 7% good
SMM.AX 76% 2% good
MRO.AX 42% 10% good
SIM.AX 31% 11% good
GGY.AX 21% 39% good
AEX.AX 21% 30% good
SRZ.AX 2% 58% good
NEL.AX 90% 15% sound
UNX.AX 197% 21% reasonable
ACB.AX 67% 12% reasonable
ERA.AX 39% 1% reasonable
UEQ.AX 27% 15% reasonable
CUY.AX 3% 25% reasonable
KOR.AX 265% 11% fair
MRU.AX 227% 0% fair
SAU.AX 139% 3% fair
ARU.AX 131% 14% fair
BKY.AX 105% 11% fair
ARM.AX 102% 0% fair
SCX.AX 70% 29% fair
UKL.AX 66% 19% fair
PDN.AX 64% 2% fair
GBE.AX 62% 24% fair
MUR.AX 56% 39% fair
TAS.AX 41% 16% fair
USA.AX 37% 41% fair
RTM.AX 36% 42% fair
ALB.AX 33% 8% fair
UOG.AX 30% 19% fair
NRU.AX -13% 42% fair
TOE.AX 2% 53% overpriced
URA.AX 209% 36% geo-political risk
BLR.AX 225% 0% fully priced
GIR.AX 126% 27% fully priced
PNN.AX 126% 30% fully priced
EME.AX 91% 19% fully priced
AGS.AX 81% 28% fully priced
OMC.AX 69% 5% fully priced
IVK.AX 32% 7% fully priced
WME.AX 11% 38% fully priced
UTO.AX 10% 31% fully priced
THX.AX -4% 15% fully priced
BMN.AX 120% 17% expensive
CTS.AX 49% 13% expensive
SRK.AX 44% 0% expensive
EXT.AX 39% 40% expensive
UXA.AX -9% 38% expensive
DYL.AX 136% 30% very expensive
CMR.AX 12% 14% very expensive
ENE.AX 4% 10% upper end of value
 

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