RE: Uranium in 2008 -Good article on Us2008: A Year for Investing in Uranium Equities
Thursday, January 3, 2008
Uranium equities have stabilized in recent days with the uranium average bouncing back to the
mid-180 level and only recently crossing back over the 190+ level . Investors have begun to test the
waters and wade back into some of these issues rather than jump in blindly. It appears that we may
have experienced the worst of the tax selling in both Canada and the United States, so the table seems
set for 2008.
With drill results rolling in for the industry in the next few months we will have a news flow to trade
on, and a few companies will be reporting NI 43-101 compliant resources. Not sure at all how any of
these results will come in, however we will be investing our money in companies which have proven that
they either have something solid in the ground, or are very close to something substantial based on their
current results.
We cannot help but notice these days some of the full page advertisements endorsing nuclear
power plants which keep popping up in some of our favorite financial publications (i.e. Barron's and The
Wall Street Journal). It seems that Corporate America has fully embraced what is 'The Nuclear
Renaissance' and have begun to put their money behind it. The utilities are behind these ads and are
painting the picture that nuclear power is green power, and rightfully so. If you were to measure the
electrical output of say coal (a truly dirty source of power at all stages of its cycle- from mining to the
power plant) versus that of uranium there would be no other conclusion to draw from the facts. Truth be
told, one kg of coal contains only three times more electrical output than fire wood and produces less
than 1/16,600 of that of uranium. One question I would love to have answered is if you measured the
coal ash which goes into the atmosphere, as a result of coal being burnt at a coal fired plant, and
condensed it to the volume of its energy equivalent in uranium terms...how lethal and deadly would that
substance be? Sad thing is this is all dumped into the atmosphere and greens seem to prefer that over
storing the waste on the surface. In the future nuclear power may find more support as people become
aware of the hazards of the chemicals dumped into the atmosphere and want to account for this. As
laughable as this may sound, even today oil companies are looking at the fact of pumping CO2s into the
ground in order to pump oil out and in the process keep greenhouse gasses out of the atmosphere. It is
also being said that this process could help with meeting CO2 emission quotas under Kyoto.
Unfortunately there are those out there who lack knowledge on the matter and through their
ignorance on the subject suggest that nuclear power is much more dangerous than any other power
source we have due to the plants and spent fuel. There has not been an accident in nearly 30 years
and today many of the plants basically run themselves. There is always the possibility of accidents,
however France has converted to 80% nuclear and they do not have any problems (engineering or
management) plaguing their plants.
The country will learn more about nuclear power and uranium mining as 2008 moves on. More
applications will be submitted to the DOE for permits to build nuclear power plants, and quite honestly
the Southern US is very pro-nuclear. The guaranteed subsidies will encourage this, plus USEC Inc.
issued a press release stating that these subsidies will also benefit the uranium refiners. There is $2
billion available to the front-end of the fuel cycle and $18.5 billion for the plants themselves.
We still do believe that the established miners and near production explorers will be the issues to
lead us out of the darkness, ...
...
There are still many reasons to invest in uranium, and at these prices we are among the buyers.
Many of the same reasons we began investing in uranium equities still exist, and chief among them are
the supply demand ratio and build-out of nuclear plants. So long as a marketplace exists where supply
is half of demand and demand is increasing for many years out, a favorable investing opportunity will be
present.