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

 Published on Monday December 02 2013 (AEST)

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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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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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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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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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