Ur-Energy Inc T.URE

Pescod Newsletter

[tony0911]

 

David Talbot of Dundee Securities is probably the dean of the uranium analysts these days and is hopeful in the coming months that uranium will finally gain some favor in the mar- kets.

For followers of uranium it will be interesting to see if the election in Japan on December 16th might be a turning point as once a new Premier is elected, we might see some of their many idle nukes turn back on...or not.

For some Japanese citizens and industry are now having to pay big for having to import liquefied natural gas at inflated prices compared to the nukes that provide an energy rela- tively cheap. And hey, they are already paid for!

One of Talbot’s favorite stories he tells us is UR-Energy which should be up and producing uranium after so many years work, sometime this summer. And it should hopefully create a little joy in the markets.

But Talbot notes a wee problem. He writes, “UR-Energy is one of our preferred recommendations with a BUY and $2.30 share price target. Ur-Energy has become aware of a petition review filed in U.S. District Court against the US Bureau of Land Management (BLM) over its Record of Decision for the permit it provided to Ur Energy's Lost Creek project. The peti- tion was filed Friday (this is from Talbot’s notes of several weeks ago?) by the Biodiversity Conservation Alliance, a Laramie-based wildlife protection group. While unlike the BLM, Ur Energy was not named in the petition, the focus is obviously centered on BLM approval of its Lost Creek. The details within the filing are thin but they claim that the BLM did not follow the Natural Environmental Policy Act. The group claims that the BLM failed to abide by both a Wyoming executive order and the agency’s own sage grouse policy in approving plans for the site. This kind of stalling tactic almost seems to be normal course of business to hold up US ura- nium projects.”

He continues, “Construction activities are currently unaf- fected and continue as planned. We don't expect the petition to affect the company or its development timeline as we be- lieve the BLM completed exhaustive studies covering the sage grouse and other relevant environmental factors.”

Ah yes, the sage grouse (prairie chicken). In case you are curious, the sage grouse is one of the biggest grouse out there, but a tad unique in that it has to stay close to an envi- ronment that has sage brush as its main source of food. 

 

Can’t seem to eat seeds like its relatives. (Well actually the sage grouse chicks eat bugs but the adults prefer fresh buds and leaves from the sage brush. Tastes like sage which saves the hunters money on seasoning!)

It used to number in the millions and now is in the hundreds of thousands, but no where near extinct and not rare at all. Take a look at research on Google and you’ll note it is kind of cute, rather big, a target for hunters, but still has problems with the usual varmints that raid its nest.

Oh yes, its mating habits might make Hugh Hefner blush. The big concern of course is the action of Biodiversity Conser- vational Alliance opposing the project, although they are not going after UR-Energy, but the Bureau of Land Management.

Excuse our bias, but years spent as a boy scout in northern Ontario swimming with water snakes and learning about ani- mals of nature from a very special scout leader gives you a love for nature and its animals. Look at what’s going on in the U.S. where environmental movements are now big business com- plete with big, ridiculous salaries, outrageous egos and no sense of reality and you get the sense that the environmental business, while important, is becoming simply the worst of big business.

It does make you worry that when a turn comes and journal- ists start asking hard questions and momentum might shift...too much. But enough of our rant. 

Biodiversity isn’t one of big, bad boys (yet) as they are a very small group, but for all we know they might want to be. It’s the USA after all, way too many lawyers and folks suing everyone. Do you think there’s a reason some businesses are leaving the USA?

Wayne Heili, President of UR-Energy is excited to have finally started construction of the Lost Creek project two months ago and he tells us he believes he has a team that should be able to deliver on their planned production start around June to July of 2013 with July 1st being his target.

If they can produce one to two million pounds a year of $50 product, that will create interest. In examining the environ- mental problem, Wayne tells us about the years of work spent in discussion with state, federal and BLM officials to make sure everyone might be as happy as possible and as little of the prairie would be disturbed.

Wayne noted that they had made the decision to go the EIA route. To those new to the massive research required by construction and mining projects these days, an Environmental Assessment report is relatively short and compact com- pared to the Environmental Impact statement report that can take years and takes a look at just about anything that a small plant might affect. Economically, environmentally, you-name-it.

They took that route he suggests to make sure that all bases were covered and all things would be learned (yes there are always surprises).

July 1st is the date Wayne has as his target after so many years of hard work and it will be intriguing to see what sur- prises the next few months might hold.

As far as predicting uranium prices, Wayne suggests he would wager that the bottom we saw a few weeks ago of $40.00 was a “hard bottom” and expects things to drift upward from here.

When we ask him to make a stock pick for us that might a few bucks for some good folks in the market, he suggests that if he did, that might alienate some friends in the mining sector...but we persist. He picks UEX Corp. as his stock pick for the coming year.

We buy some of both and hope uranium makes a renaissance.