Tuesday, December 31, 2013

Ur-Energy makes $5.7M Uranium Sale

Published on Tuesday December 31 2013 (AEST)  
New production in-situ wells in progress at Ur-Energy's Lost Creek facility in central Wyoming. Mark Wilcox photo.

Interesting to note that 
 Yellowcake sales sold for $62.92 per pound, far above 
current spot prices
CASPER – The newest producing in-situ uranium mine has completed its first major sale, infusing the market with 90,000 pounds of yellowcake, or U3O8.

The sale produced gross revenues for the company of $5.7 million, putting a dent in the approximately $100 million in capital invested into the Lost Creek facility near Jeffrey City. The yellowcake sold for $62.92 per pound, far above current spot prices, which have hovered in the mid-30s for most of the year.

CEO Wayne Heili told the Business Report recently that the company had negotiated long-term contracts, even after the March 2011 Fukushima disaster that devastated uranium spot prices, to get the most for their product. The pricing is based on multi-year supply agreements between Ur-Energy and the two U.S. based utility companies that purchased the poundage, who Heili said must remain contractually anonymous.

However, he said uranium actually has very few buyers, meaning sales of uranium are few and far between and don't fluctuate as wildly as spot prices suggest. He said the spot prices are set by a third party that basically approaches uranium producers and asks what they'd be willing to sell their product for before approaching buyers to ask what they'd be willing to pay for the product. The spot price, he said, is basically an average of the two answers.

"Recording our first revenue as a company is indeed a milestone event," Heili said in a statement. "Ur-Energy has achieved tremendous growth in the past year."

The company recently acquired two abandoned mines from Pathfinder Mining Corp. – a $6.6 million deal.

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Sunday, December 8, 2013

Rio Tinto Uranium Mine Spills Radioactive Acid in National Park

Published on Sunday December 08 2013 (AEST)  

Rio Tinto Group (RIO)’s Energy Resources Australia (ERA) said a tank at its Rangers uranium mine in Kakadu National Park split, spilling a mixture of acid, ore, mud and water.

The 1,450-cubic-meter leaching tank developed a hole, which caused it to split and release slurry today, the company said in an e-mailed statement. Processing at the facility will be suspended while a clean up takes place, it said.

Operations at the mine must be suspended indefinitely and the company should conduct a full audit of the operations at the plant, the Australian Greens party said in an e-mail that described the spill as radioactive. ERA doesn’t dispute that the slurry is radioactive, company spokesman Dan Hall said by phone today.
“Containment systems stopped the flow, and this has meant there is no impact to the surrounding environment,” Tim Eckersley, general manager of operations at ERA, said in the company statement. “ERA is focusing on clean up and recovery.”

World heritage-listed Kakadu National Park, located in Australia's Northern Territory, is the nation’s largest national park, and more than half of it is Aboriginal land.
The Gundjeihmi Aboriginal Corporation, which represents the traditional owners of the land, called for an independent investigation of the spill.

Justin O’Brien, chief executive officer of GAC, said photographs and descriptions from eye witnesses showed the tank burst with such force that it bent and twisted nearby infrastructure and coated equipment in the slurry. 

“What could be safely described as one of Australia’s biggest nuclear accidents has occurred,” O’Brien said. “No one has demonstrated to us that there hasn’t been contamination.”
Rio Tinto owns 68.4 percent of Energy Resources.

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Monday, December 2, 2013

The Uranium Bull Market Rick Rule's Strategies for Making Money

 Published on Monday December 02 2013 (AEST)


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Sunday, December 1, 2013

Uranium The Investment Opportunity Of A Lifetime

Published on Sunday December 01 2013 (AEST)  

Remember, "bad to less bad" situations are an incredible source of low-risk profits...

"Bad to less bad" is a phrase coined by True Wealth editor Steve Sjuggerud. It involves buying assets that have suffered through horrible times...

In this kind of "bad" condition, you can often buy an asset for well below "normal" levels. If you step in and buy amid the pessimism, you can double your money if a bit of optimism returns to the market.

That's the situation right now in Uranium

Uranium fuels nuclear power stations... And like most commodities, it enjoys huge "boom and bust" cycles.

From 2003 to 2007, uranium saw a huge boom. It ran from $10 per pound to $130 per pound. And the share prices of uranium producers skyrocketed. Canada-based producer Cameco, for example, returned more than 1,200%.

But in March 2011, the disaster at Japan's Fukushima power plant helped turn the boom to bust. Japan was one of the world's biggest consumers of nuclear power, and it shut down more than half of its reactors. Several other countries also scaled back their nuclear programs.

While global sentiment has since improved, the damage was done. Uranium prices now sit at about $36 per pound... their lowest levels in more than seven years.

Right now, uranium producers need to sell their product for about $75 a pound to break even... That's more than twice the spot-market price. In other words, most producers are losing money on every pound of uranium they sell. Eventually, some of them will be forced to shut down.

In short, it's "bad" for uranium right now. Take it from Rick Rule...

Rick is the founder of Sprott Global Companies and chairman of Sprott U.S. Holdings. He has spent decades in the resource markets, making himself and his clients many millions of dollars in the process. He has also financed several of the most important resource companies in the world.

He's a brilliant trader, a genius investor, and a walking encyclopedia of business knowledge.

Here's what Rick told our colleague Frank Curzio in a recent episode of Frank's excellent S&A Investor Radio podcast:

The industry is in fact in liquidation. It sounds like it couldn't possibly get any worse, so sentiment with regards to uranium is really, really bad.

It might be hard to stomach the thought of buying uranium here. But as we've noted in these pages before, when things can't get any worse, they can only get better.

And Rick believes a double in uranium prices is a "near certainty."

Uranium Participation Corp. tracks the spot price of uranium (like GLD does for gold). In the chart below, you can see the big 2011-2012 bust. But you can also see that it has "ground out" a bottom at around C$4.80. Over the last year, it has refused to fall below that level.

You can also see that in the last three weeks, it has gained 12%. On Friday, it hit a new four-month high.

There's no guarantee this is the start of uranium's recovery. But the upside potential is enormous. And it's inevitable. It might take a year... or two... or three to play out. But uranium prices will head higher.

Keep in mind, it doesn't take great news to double the price of a cheap, hated asset... things just need to go from "bad to less bad." And it looks like that's starting to happen in uranium.


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Saturday, November 16, 2013

Nymex U3O8 Spot Futures Jump To $36.25 p/lb

Building on previous week rises, again overnight we saw the Nymex November futures move to $36.25P/Lb, building further upward momentum onto last weeks Uranium Spot of $35.35

The early Green shoots do seem to be evolving.

*** Note this recent move is the highest since July 2013 ***


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Tuesday, November 12, 2013

Black Range Minerals Acquires Shootaring Uranium Mill From UraniumOne

Published on Tuesday November 12 2013 (AEST)  

Black Range Minerals has agreed to buy the mothballed Shootaring Canyon uranium mill in Utah from Uranium One for $10 million.

The acquisition includes surface stockpiles of uranium ore, with a historic mineral resource estimate of some 250,000 pounds U3O8 (97 tU) at a grade of 0.13% U3O8. Black Range has also agreed to acquire Uranium One's other "conventional mining assets" within the USA, the most advanced being the previously mined Velvet-Wood deposit in Utah with remaining NI43-101 estimated resources of 5.3 million pounds of U3O8 (2039 tU).


Black Range already owns the Hansen/Taylor Ranch uranium project in Colorado. The company says that the cost of acquiring, refurbishing and restarting the Shootaring Canyon mill is expected to be "significantly less" than building a new processing facility at Hansen, and should enable it to fast-track the development of its Colorado project while avoiding costs from toll-milling at a third-party mill.

The company is expected to customise the mill so it can preferentially receive high-grade concentrates from multiple projects across the USA.

The purchase was described by Black Range as being "transformational," noting that "ownership of the Shootaring Mill, one of only three licenced mills in the USA, assures control of production all the way from mining to finished yellowcake."

The Shootaring Canyon mill, located approximately 77 kilometers south of Hanksville, Utah, is permitted to process up to 750 tonnes of ore per day, but has a capacity to process 1000 tonnes per day. The mill - the last conventional uranium mill to be built in the USA - was commissioned and operated for just four months in 1982, before being mothballed due to declining uranium prices. Black Range estimates it would take about 18 months to acquire the necessary permits to bring the mill back into action.

Uranium One acquired the Shootaring Canyon mill from US Energy Corp in April 2007.


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Sunday, November 10, 2013

Uranium Is Heating Up

Published on Saturday November 09 2013 (AEST)

Jeb Handwerger, publisher of Gold Stock Trades newsletter, discusses his outlook on uranium. Jeb points to toxic air pollution in China and the country's need for more power as the reason why China is leading the world in the construction of new nuclear power plants. 

India and Russia are building nuclear power plants. Even oil rich countries like United Arab Emirates and Saudi Arabia are investing in nuclear to reduce their dependence on fossil fuels. 

Australia and Greenland have recently lifted bans on uranium mining. Volumes moving into uranium stocks are rising and last week, Cameco shocked markets by posting a profit, even with uranium at 8 year lows. M&A in the uranium sector has been exceptional over the past year, particularly in the Athabasca Basin.

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Monday, October 7, 2013

Areva Advises to Buy Uranium as Nuclear Glut Ends Price Decline

Published on Monday October 07 2013 (AEST)  

Nuclear power plant operators benefited from a slump in uranium prices following the reactor meltdown in Japan’s Fukushima facility. Areva SA (AREVA), the second-biggest producer of the metal, says that’s about to end.

Power utilities need to boost orders of uranium by 2015 or face potentially soaring prices as new atomic plants come on line in addition to reactivated reactors in Japan, Olivier Wantz, who heads Areva’s mining division, said in an interview.

“It would be wise for buyers to make decisions in 2015 at the latest,” he said at the company’s headquarters near Paris.

Uranium prices in August plunged to the lowest level in more than seven years, still suffering from a drop in demand following the March 2011 meltdown of the Fukushima Dai-Ichi plant that was caused by an earthquake and a tsunami. Even with some western nations such as Germany shutting nuclear plants, new reactors in emerging markets such as China and India are now reversing that trend, Areva said.

“All new nuclear plants will significantly boost demand in coming years, even taking into account the phasing out of German plants” by 2022 and other possible closures,Wantz said. “We see first a stabilisation of prices, with the start of a pick-up as soon as 2014.”

Global uranium demand will probably rise by 48 percent by 2023, according to the World Nuclear Association. Sixty-eight reactors are under construction, including 28 in China, 10 in Russia, 7 in India and 5 in South Korea, according to the WNA. About 435 reactors around the world with combined capacity of more than 370 gigawatts already consume about 78,000 tons of uranium concentrate annually, the association said.

Nuclear Disaster

In the wake of the nuclear disaster, Japan idled its 50 remaining reactors and Germany immediately shut some of its 17 plants.

The spot price of uranium, which climbed as high as $138 per pound in June 2007, dropped as low as $34.5 two months ago and recently held at $35.75, according to the Metal Bulletin.

“That doesn’t seem to reflect a lasting market trend as prices for long-term contracts are higher,” at about $54, Wantz said. Prices will also get a boost as uranium supplied from reprocessed nuclear weapons under a U.S.-Russian agreement will no longer be available.

Highly-enriched uranium from weapons stockpiles supplied about 9,720 tons of U3O8, its tradable form, each year, representing about 13 percent of global reactor requirement, according to the WNA.

Weapons Stockpiles

Areva shares dropped 61 percent since the Fukushima disaster, valuing the company at 5.4 billion euros. Canadian rival Cameco Corp. (CCO), the world’s third-largest uranium producer, declined 48 percent. Kazakhstan’s state-owned Kazatomprom is the world’s largest producer.

To reflect falling uranium prices and delayed production, Areva wrote down the value of its mines by a total of 1.62 billion euros in the 2011 to 2012 period, following the $2.5 billion acquisition of Toronto-listed UraMin in 2007. Areva, which also faced construction delays at a nuclear plant in Finland, sold 1.2 billion euros of assets last year and plans to cut costs by 1 billion euros between 2012 and 2015.

“We’re certainly not considering new asset writedowns” in mines, Wantz said. The company also has “no reason to consider selling a stake” in the mining division, as the turnaround plan is “well underway” and demand is rising, he said.

Long Game

In the first half, earnings before interest, taxes, depreciation, amortization and divestments climbed 41 percent to 315 million euros at Areva’s mining unit, representing 39 percent of the division’s revenue, and 66 percent of the group’s total profit.

Areva benefited from increasing prices and the end of some “less favorable contracts,” Wantz said. “It will be slightly less favorable in the second half, without being problematic. We’re among producers that are least exposed to spot prices, we’re rather strongly exposed to long-term prices.”

Last year, the company’s output of uranium concentrate known as yellowcake, which is later converted, enriched and fabricated into fuel rods, reached a record 9,760 tons, including 3,661 tons at a joint-venture in Kazakhstan, and 3,065 tons at Areva’s Somair mine in Niger.

Wantz predicts Areva will produce a similar amount of uranium concentrate this year as in 2012, as increased production in Kazakhstan will make up for a shortfall at the Somair mine in Niger where processing was temporarily curbed after a terrorist attack in May.

Niger Mine

Canada’s Cigar Lake mine, in which Cameco owns 50 percent and Areva 37 percent, is due to open next year.

“Cigar Lake will operate for at least 15 years, and maybe longer because we’ll probably find additional resources,” Wantz said. “It will be an extremely profitable mine. The output will be 6,900 tons per year when the ramp-up is completed in several years.”

Areva is also considering creating a venture with Japan’s Mitsubishi Corp. (8058) and the government of Mongolia this year to operate mines in the region, following investments of about $120 million in exploration works over the past 15 years. 

The new mines will allow the company to meet rising demand, the executive said.
“We’ll be totally in line with the demand curve of the market,” he said.

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Wednesday, October 2, 2013

Uranium Miner Paladin Energy To Make Further Cuts

Published on Wednesday October 02 2013 (AEST)  
Paladin Energy will cut more jobs and implement further pay cuts as the price of uranium continues to fall. 

Uranium miner Paladin Energy is cutting more jobs and reducing executive pay and other spending in response to continued falls in the price of the nuclear energy source.

The Perth-based company, which operates two uranium mines in Africa, says it will reduce the number of head office staff in the current financial year, and cut the base salaries of managers by 10 per cent.
Paladin already had made 14 head office staff redundant, in 2012/13, leaving 45 in administration roles.
No number has been given for the latest round of job cuts.

Executive pay was also reduced in 2012/13, with managing Director John Borshoff's remuneration of $2.5 million less than half the amount he received in the previous year.

Paladin made a loss of $US420.9 million in 2012/13, due to massive writedowns on the value of its assets caused by the weak uranium price.

Its corporate and exploration costs are to be reduced by 24 per cent in 2013/14, or $US10.8 million ($A11.53 million).

Discretionary capital expenditure will be cut by $US12.4 million ($A13.23 million) in the next two financial years.

Costs at the Kayelekera mine will be slashed by 22 per cent over the next two financial years, while costs at Langer Heinrich will be reduced by 15 per cent, Paladin said.

The new cost reductions "have now become even more pertinent" the company said on Wednesday, due to "further incremental weakening of the uranium spot price".

But the price falls do not detract from the very strong fundamentals of uranium in the medium and long term, it said.

Paladin is also negotiating the sale of a minority stake in the Langer Heinrich mine.

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Thursday, September 26, 2013

Fukushima Radiation Leak Is Equal To 76 Million Bananas

Published on Thursday Sept 26 2013 (AEST)  

There’s much screaming and shouting from the usual suspects about the new radiation leak discovered at Fukushima, the stricken nuclear power plants in Japan. What they’re not telling you is that the radiation leakage is around the same as 76 million bananas. 

A fact which should help to put it all into some perspective.

 Most of us haven’t a clue what that means of course. We don’t instinctively understand what a becquerel is in the same way that we do pound, pint or gallons, and certainly trillions of anything sounds hideous. But don’t forget that trillions of picogrammes of dihydrogen monoxide is also the major ingredient in a glass of beer. So what we really want to know is whether 20 trillion becquerels of radiation is actually an important number. 

To which the answer is no, it isn’t. 

This is actually around and about (perhaps a little over) the amount of radiation the plant was allowed to dump into the environment before the disaster. Now there are indeed those who insist that any amount of radiation kills us all stone dead while we sleep in our beds but I’m afraid that this is incorrect. We’re all exposed to radiation all the time and we all seem to survive long enough to be killed by something else so radiation isn’t as dangerous as all that.

At which point we can offer a comparison. Something to try and give us a sense of perspective about whether 20 trillion nasties of radiation is something to get all concerned about or not. That comparison being that the radiation leakage from Fukushima appears to be about the same as that from 76 million bananas. Which is a lot of bananas I agree, but again we can put that into some sort of perspective.

Let’s start from the beginning with the banana equivalent dose, the BED. Bananas contain potassium, some portion of potassium is always radioactive, thus bananas contain some radioactivity. This gets into the human body as we digest the lovely fruit (OK, bananas are an herb but still…):

 Since a typical banana contains about half a gram of potassium, it will have an activity of roughly 15 Bq.

Excellent, we now have a unit that we can grasp, one that the human mind can use to give a sense of proportion to these claims about radioactivity. We know that bananas are good for us on balance, thus this amount of radioactivity isn’t all that much of a burden on us.

We also have that claim of 20 trillion becquerels of radiation having been dumped into the Pacific Ocean in the past couple of years. 20 trillion divided by two years by 365 days by 24 hours gives us an hourly rate of 1,141,552,511 becquerels per hour. Divide that by our 15 Bq per banana and we can see that the radiation spillage from Fukushima is running at 76 million bananas per hour.

Which is, as I say above, a lot of bananas. But it’s not actually that many bananas. World production of them is some 145 million tonnes a year. There’s a thousand kilos in a tonne, say a banana is 100 grammes (sounds about right, four bananas to the pound, ten to the kilo) or 1.45 trillion bananas a year eaten around the world. Divide again by 365 and 24 to get the hourly consumption rate and we get 165 million bananas consumed per hour.

We can do this slightly differently and say that the 1.45 trillion bananas consumed each year have those 15 Bq giving us around 22 trillion Bq each year. The Fukushima leak is 20 trillion Bq over two years: thus our two calculations agree. The current leak is just under half that exposure that we all get from the global consumption of bananas.

Except even that’s overstating it. For the banana consumption does indeed get into our bodies: the Fukushima leak is getting into the Pacific Ocean where it’s obviously far less dangerous. And don’t forget that all that radiation in the bananas ends up in the oceans as well, given that we do in fact urinate it out and no, it’s not something that the sewage treatment plants particularly keep out of the rivers.
There are some who are viewing this radiation leak very differently.

Arnold Gundersen, Fairewinds Associates: [...] we are contaminating the Pacific Ocean which is extraordinarily serious.
Evgeny Sukhoi: Is there anything that can be done with that, I mean with the ocean?
Gundersen: Frankly, I don’t believe so. I think we will continue to release radioactive material into the ocean for 20 or 30 years at least. They have to pump the water out of the areas surrounding the nuclear reactor. But frankly, this water is the most radioactive water I’ve ever experienced.
I have to admit that I simply don’t agree. I’m not actually arguing that radiation is good for us but I really don’t think that half the radiation of the world’s banana crop being diluted into the Pacific Ocean is all that much to worry about.

And why we really shouldn’t worry about it all that much. The radiation that fossil fuel plants spew into the environment each year is around 0.1 EBq. That’s ExaBecquerel, or 10 to the power of 18. Fukushima is pumping out 10 trillion becquerels a year at present. Or 10 TBq, or 10 of 10 to the power of 12. Or, if you prefer, one ten thousandth of the amount that the world’s coal plants are doing. Or even, given that there are only about 2,500 coal plants in the world, Fukushima is, in this disaster, pumping out around one quarter of the radiation that a coal plant does in normal operation.

You can worry about it if you want but it’s not something that’s likely to have any real measurable effect on anyone or anything.


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Tuesday, September 17, 2013

Nymex September Uranium Spot Futures Bounce Overnight

Published on Thursday Sept 19 2013 (AEST)
 Here's the last 3 Day's of Nymex New York trading  

September 16th


September 17th  

September 18th

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Tuesday, September 10, 2013

Cameco Corp. To Delay Start Of Cigar Lake Uranium Mine To 2014

Published on Tuesday Sept 09 2013 (AEST)  

U3O8- Cameco Delays start of Cigar Lake

Interesting development at Cigar lake, although dismissed in Video, on would suggest ( My Opinion Only ) delay has been put in place in an attempt to feed into higher prices for Uranium.  

Link To Vid - allow time for vid to load !


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Friday, September 6, 2013

Honeymoon Well Uranium Mine to go into Russian hands

Published on Friday Sept 06 2013 (AEST)  

The Honeymoon Well uranium mine in South Australia is set to be 100 per cent Russian owned by the September quarter.

Shareholders of Canadian company Uranium One have approved a buyout offer from the Russian State Corporation for Nuclear Energy, Rosatom. A Rosatom subsidiary already owns 49 per cent of Uranium One and, once the deal is completed, the new entity will be private.

Honeymoon Well is is the smallest of Australia's operating uranium mines. The others are Olympic Dam in South Australia, Ranger Mine in the Northern Territory and Beverley Mine in South Australia. The Federal Government gave Toro Energy environmental approval for the Wiluna uranium mine in Western Australia earlier this year. Argonaut Securities analyst Matthew Keane says the Uranium One acquisition demonstrates the growing appetite for Australia's uranium reserves by countries overseas, in part because of the political stability of the country. "We do have a very large uranium resource base, though not quite as much as Kazakhstan, and a lot of that resource is tied up in Olympic Dam (owned by BHP Billiton).

"There's a number of really good deposits here that are within the range of being developed in the next decade. "Uranium is a longer term play. Assets (deposits) take a longer time to go from the pre-development phase into production." Mr Keane says in the last three years both the Russians and the Chinese have been buying up uranium projects around the world to to secure supply for their nuclear reactors. "For example, the Husab deposit in Namibia was bought by the Guangdong Nuclear Power Company from Australian miner Extract Resources "A subsidiary of the state-owned Rosaton purchased the Mkuju River project in Tanzania from another Australian company, Mantra."

 All purchases of Australian businesses must meet criteria set out by the Foreign Investment Review Board (FIRB).

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