2008ayearforinvestinginuraniumequities

     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, with Uranium One and Denison Mines looking attractive among the miners and
Laramide Resources, UEX and Ur-Energy among the most attractive near production explorers. Pinetree
would give one exposure to many uranium explorers, but only one, Mega Uranium, is a serious
contender right now for achieving production. They do own some of the best explorers, and last we were
told they effectively owned, through their stock ownership in Silver Spruce Resources and Universal
Uranium, about 10% of the Two Time Zone Deposit in Labrador's Central Mineral Belt.

    Another reason we are still bullish on uranium for 2008 is the very fact that the big miners are not as
bullish as once seemed. BHP Billiton and Rio Tinto both seem willing to part with Rio's holdings in
Wyoming, BHP if they are able to buy Rio Tinto and Rio Tinto to get cash to pay down debt from recent
acquisitions and to increase investors' returns. It is also important to note that none of the big miners
have bought these uranium miners or explorers. Granted Cameco has made some strategic
investments, but nothing material and Areva did purchase Uramin which was arguably the only buy
among big miners. So until these uranium plays are discovered by those who specialize in mining, it is
going to be hard for casual investors to discover.

    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.