Thursday, January 28, 2010

Owning Uranium Producers Could Be A Long-Term Energy Strategy

Companies such as Paladin Energy look to be takeover targets as the construction of more nuclear power plants gets the green light.

About 15 per cent of the world's electricity is generated by nuclear power plants.

To produce this electricity, the plants require uranium.

The thesis: Accumulate shares in uranium suppliers.

The rationale: The number of nuclear reactors worldwide is likely to double by 2030. According to World Nuclear Association data, as of Jan. 1, the number of reactors currently under construction or approved totals 295 while the number proposed stands at 327.

Industrialization and population growth in emerging countries are creating huge new demands for energy. China alone has 57 nuclear plants under construction or approved, and another 120 proposed.

Attitudes are also becoming more favourable toward nuclear power. It is a low-cost alternative to coal and natural gas in the generation of electricity, yet emits virtually no greenhouse gases. Moratoriums are consequently being lifted and power plants are going ahead. Of note:

* After ending its moratorium, the U.K. green-lighted 10 new power stations in December. (Source: Nick Hodge, managing editor of Alternative Energy Speculator)
* The U.S. government provided loan guarantees in 2009 to build nuclear reactors, “America's first new nuclear power plants in 30 years.” (Source: Salida Capital report, Uranium Shortages Looming?)
* The 2008 withdrawal of a 34-year ban against exporting uranium to India allows the country to buy uranium and expand its program. (Source: Scotiabank economist Patricia Mohr in the latest Scotiabank Commodity Price Index report).
* About 40 per cent of uranium supply comes out of stockpiles built up from dismantling nuclear weapons and recycling fuel. This finite source means mining companies face additional requirements to increase production.

The time frame: Uranium prices on the spot market slipped to $45 (U.S.) in December, below the year-earlier level of $53 (U.S). Ms. Mohr attributes this weakness, in part, to a U.S. Department of Energy's decision to release a portion of U.S. uranium inventories to pay for a clean-up at a uranium-enrichment plant.

Softness in prices is expected to persist in the near term, especially with utility requirements at a low level of 4.5 million pounds in 2010. However, utility demand should ramp up to 18 million pounds in 2011. With a pickup in strategic buying by China and India, Ms. Mohr expects significant price improvement by late 2010 or early 2011.

Some investment opportunities:
Saskatchewan's Cameco Corp. (CCO-T29.96-0.19-0.63%) is the world's largest producer of uranium. Its extraction costs are among the lowest. Once de-watered, the Cigar Lake deposit will be huge and high grade like Cameco's other main deposits. David Baskin of Baskin Financial Services recently named Cameco a top pick on the Business News Network (BNN).

Junior companies that have found, or are developing, large deposits of uranium are acquisition targets for larger producers or users in countries eager to secure supplies. Canadian miners in this category include Forsys Metals Corp. (FSY-T4.10-0.09-2.15%) .

An exchange-traded fund, the Market Vectors Nuclear Energy Fund (NLR-N21.78-0.15-0.68%) , has significant exposure to uranium producers, claims Don Dion of Don Dion Money Management in Williamstown, Mass. Then there is Uranium Participation Corp. (U-T5.88-0.01-0.17%) , a holding company that invests in physical inventories of uranium.

Spotlight on Paladin Energy: Since May, shares in Australia's Paladin Energy Ltd. (PDN-T3.54-0.06-1.67%) have hovered close to $4 (Canadian) on the Toronto Stock Exchange. During this time, as shows, five investment managers chose the company as a top pick on BNN.

Paladin Energy has good growth prospects at current uranium prices – thanks to low costs and a new mine coming on stream. Indeed, it “has the best growth profile in our coverage universe,” note CIBC World Markets Inc. analysts Ian Parkinson and Matthew Gibson in a recent report. Their 12- to 18-month price target is $6.10.

Company documents state that Paladin raised $374-million (U.S.) in a private placement in September. This injection strengthens its balance sheet and allays concerns regarding the repayment of $250-million in convertible bonds due 2011.

As Andrew Willis recently reported in the Globe and Mail, several analysts consider Paladin Energy to be an attractive takeover target for Cameco (which has $2-billion of cash in its coffers after selling its stake in Centerra Gold Inc.). Other suitors may appear too.

The risks: Although many reactors are under construction, new designs and technologies are likely to reduce the amount of uranium needed to operate each one. Moreover, new mining technologies and processes could lower the cost of extracting uranium.

There are long lags in the construction of nuclear plants. And it will take many years before stockpiles of uranium are depleted. Uranium could be more of a long-term story stretching over the next decade or two, with ups and downs along the way.

Although safety measures have improved, there could be a reassessment of nuclear power if serious accidents were to occur, such as the one that happened at the Three-Mile Island plant in the 1970s – or in the disposal of radioactive waste. Another trigger could be signs that the proliferation of nuclear weapons was getting out of hand.


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Monday, January 25, 2010

Rising US$ Supports Australian & Canadian Uranium Sectors

$Canadian - $Australian - $U.S.

7 Day Chart January 24th - January 30th - 2010


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Monday, January 18, 2010

White Canyon Uranium Signs Toll Milling Agreement With Denison Mines Corp.

US-focussed Uranium producer White Canyon Uranium (ASX: WCU) has executed a toll milling agreement with Denison Mines Corp. (TSX:DML, NYSE AMEX:DNN).

Denison will process all material produced from White Canyon’s owned and operated Daneros uranium mine in Utah.

White Canyon has confirmed that based on the conditions in the toll milling agreement the Daneros mine is viable even at current spot prices.

The agreement has a three year term with an optional two year extension and commences in January 2010.

The earlier than expected execution of the Toll Treating Agreement concludes the Company’s participation in the Ore Purchase Programme with only the first ore lot sold to Denison.

Denison used samples from the first ore lot to conduct amenability tests and derive the processing variables necessary for the completion of a Toll Milling Agreement.

Under the terms of the agreement, White Canyon will transport material produced to Denison’s White Mesa Mill for processing of up to 55,000 tons per annum.

The Company will pay to Denison the costs to mill its ore, a capital charge plus a toll milling fee per ton of ore, which will be partly linked to the long-term uranium price.

Processing will be scheduled by Denison and first processing of Daneros ore is expected in H1 2011 allowing White Canyon to meet expected delivery dates in H2 2011.

Initial production is expected to be sourced from the Daneros mine, which is located approximately 100kms from the White Mesa complex and has been the source of material provided to date for analysis to derive critical processing parameters in determining this toll milling agreement.

Additional production is expected to be sourced from the Company’s Lark Royal, Geitus, Blue Jay, Marcy Look and Yellow Cat projects, which are also in close proximity to the White Mesa Mill.

The total tonnage will be negotiated at the completion of each 12 month production period for the subsequent full production year dependent on mill availability.


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Wednesday, January 6, 2010

Maurice Strong, & Al Gore Exposed

Creators Of Carbon Credit Scheme Cashing In On It

There's an elephant in Global Warming's living room that few in the mainstream media want to talk about: the creators of the carbon credit scheme are the ones cashing in on it.

The two cherub like choirboys singing loudest in the Holier Than Thou Global Warming Cathedral are Maurice Strong and Al Gore.

Maurie Strong and Al Gore Partners in Global Warming Scam

This duo has done more than anyone else to advance the alarmism of man-made global warming.

With little media monitoring, both Strong and Gore are cashing in on the lucrative cottage industry known as man-made global warming. is on the board of directors of the Chicago Climate Exchange, Wikipedia-described as "the world's first and North America's only legally binding greenhouse gas emission registry reduction system for emission sources and offset projects in North America and Brazil."

Gore buys his carbon off-sets from himself--the Generation Investment Management LLP, "an independent, private, owner-managed partnership established in 2004 with offices in London and Washington, D.C." of which he is both chairman and founding partner.

To hear the saving-the-earth singsong of this dynamic duo, even the feather light petals of cherry blossoms in Washington leave a bigger carbon footprint.

It's a strange global warming partnership that Strong and Gore have, but it's one that's working.

Strong is the silent partner, a man whose name often draws a blank in the Washington cocktail circuit. Even though a former Secretary General of the 1992 United Nations Conference on Environment and Development (the much hyped Rio Earth Summit) and Under-Secretary General of the United Nations in the days of a beleaguered Kofi Annan, the Canadian born Strong is little known in the Unites States. That's because he spends most of his time in China where he works to make the communist country the world's next superpower. The nondescript Strong, nonetheless is big cheese in the world of climate change, and is one of the main architects of the coming-your-way-soon Kyoto Protocol.

Gore is the glitzy, media approved front man in the partnership, the flashing neon lights on the global stage warning the masses of the end of Earth, as we know it, and Hollywood's poster boy for greening the silver screen.

The skeptics of man-made global warming believe that Gore and Strong have made climate change "the new religion". Climate change is not the first religion both parties have tried to make stick. Along with former Soviet Union leader Mikhail Gorbachev, Strong, currently president of the Earth Council, has been boasting of replacing the Ten Commandments with the Earth Charter, a golden rule guide for how the masses should treat the environment.

Gore, who has given sermons at the United Nations sponsored Cathedral of St. John the Divine Church in New York City, is a promoter of the religion known as Gaia.

The two environmental gurus also share a belief in radical Malthusian population reduction. According to them, too many people, particularly in the U.S. are polluting the planet, emitting excessive Freon through their refrigerators and jacking up the air conditioning.

But the conduct of Al Gore and Maurice Strong in the capitalist world is one for the books. It's a side of them that may have remained unknown had it not been for the investigative talent of the Executive Intelligence Review (EIR).

The tawdry tale of the top two global warming gurus in the business world goes all the way back to Earth Day, April 17, 1995 when the future author of An Inconvenient Truth traveled to Fall River, Massachusetts, to deliver a green sermon at the headquarters of Molten Metal Technology Inc. (MMTI). MMTI was a firm that proclaimed to have invented a process for recycling metals from waste.Gore praised the Molten Metal firm as a pioneer in the kind of innovative technology that can save the environment, and make money for investors at the same time.

"Gore left a few facts out of his speech that day. First, the firm was run by Strong and a group of Gore intimates, including Peter Knight, the firm's registered lobbyist, and Gore's former top Senate aide," wrote EIR.

"Second, the company had received more than $25 million in U.S. Department of energy (DOE) research and development grants, but had failed to prove that the technology worked on a commercial scale. The company would go on to receive another $8 million in federal taxpayers' cash, at that point, its only source of revenue.

"With Al Gore's Earth Day as a Wall Street calling card, Molten Metal's stock value soared to $35 a share, a range it maintained through October 1996. But along the way, DOE scientists had balked at further funding. When, in March 1996, corporate officers concluded that the federal cash cow was about to run dry, they took action: Between that date and October 1996, seven corporate officers--including Maurice Strong--sold off $15.3 million in personal shares in the company, at top market value. On Oct. 20, 1996--a Sunday--the company issued a press release, announcing for the first time, that DOE funding would be vastly scaled back, and reported the bad news on a conference call with stockbrokers.

"On Monday, the stock plunged by 49%, soon landing at $5 a share.By early 1997, furious stockholders had filed a class action suit against the company and its directors. Ironically, one of the class action lawyers had tangled with Maurice Strong in another insider trading case, involving a Swiss company called AZL Resources, chaired by Strong, who was also a lead shareholder. The AZL case closely mirrored Molten Metal, and in the end, Strong and the other AZL partners agreed to pay $5 million to dodge a jury verdict, when eyewitness evidence surfaced of Strong's role in scamming the value of the company stock up into the stratosphere, before selling it off.

In 1997, Strong went on to accept from Tongsun Park, the Korean man found guilty of illegally acting as an Iraqi agent, $1 million from Saddam Hussein, which was invested in Cordex Petroleum Inc., a company he owned with his son, Fred.

In that year, Gore, still U.S. vice president, was making news for "taking the initiative in creating the Internet."

The leaders of the man-made global warming movement, you might say, get around.