Archives Page

Market is Getting Heated
Wednesday, February 21, 2007

So much for waiting until the Cameco news on Cigar Lake was reported in March. Before either of the updates the uranium stocks around the world have been roaring to new highs across the board. The TICUA (our uranium average for Canadian companies) is up over 20% since the lows reached in early January, and has not had a down day 12 trading days! That is roughly 2 trading weeks with no downward action! This is most definitely a bullish sign and could be the market setting up for a strong push upward after the Cameco news. We now believe that the news coming out will almost definitely be bad as there has been so much strength recently in other stocks, but there is always room for surprises in the market.

Today the Uranium Spot price increased $10 to $85 per pound, which is the largest gain ever for uranium. This now indicates that not only are securities investors thinking Cigar Lake is delayed longer than thought, but that uranium purchasers are beginning to buy into the notion that either prices are going higher or that Cameco is not going to be able to come through anytime soon. As we have said before, many people tell us that it is absolutely possible to salvage the project, but getting it done on time requires an awful lot to go right. With that said, if Cameco can pull through with this and achieve their objectives early or on time, we would be inclined to vote it among the New Seven Marvels of the World.

We are watching Strathmore still with a very close eye as it seems to be borrowing a page from the Forsys playbook with this powerful movement upwards. If AREVA is kicking the tires as we suspect, then the stock has much further to run. Also of note is Monster Copper which has begun another run upwards. They have a large land position in the CMB of Labrador, including a parcel in close proximity to some of Aurora's deposits. The more that Aurora expands these deposits, the higher the probability that they extend in some form onto MNS property as well as the possibility that MNS may be taken out. We believe that the MNS story is one of significance that has not yet been discovered by uranium investors...quite possibly because they have COPPER in their name. We also received a call from Bluerock Resources today and they explained their press release to us regarding a new mine (which is really an old mine, but one that is not worn out thus it is receiving a new life). The mine is built, however drilling will be done to try and further develop the deposit as well as outfitting the mine. We are told that the grade is about .30% U3O8 and the project is in proximity to a mill. This should be watched carefully as this mine will be much cheaper to develop than building a new one, certainly a positive for the company.

It now appears that Australia is going to overturn the Three Mines Policy no matter who is in office, or leading in the polls. This morning the news out of Australia stated that the ruling Labour Party's Left faction leader was in favor of opening up uranium mining in the country. This should open the door for some more multi-nationals to emerge out of this industry, as well as serial-purchasers to make further purchases. Paladin and SXR will most certainly be buying, and Denison should in order to fill the pipeline with some mid-exploration projects. Australia offers some cheap lbs. in the ground for investors and possibly companies looking to buy. This is a story that shall get some more attention in the future as it plays out, but continue to watch it carefully to have a working knowledge of the situation.

Also of interest to uranium investors is the fact that big oil seems to be moving “beyond petroleum.” We are told from very reliable sources that one of the majors may very well be investigating a particular uranium project in order to buy in (not Strathmore's). This signals a major milestone for the industry if this rumor pans out, and if the oil companies are willing to buy in now and proclaim uranium as the fuel of the future. We shall eagerly await any news regarding big oil in the uranium arena, but until then we shall view this for what it is: A RUMOR.

We shall anxiously await the Cameco news out in March (there should be two in mid-March and the other one at the end) as we believe that this will be the news of the year, at least until the Australians meet in April! These next two months will be key in deciding how the market acts until next October, so we shall pay close attention and in the meantime develop some ideas of how we shall react to the news. As always, we hope that we are of help in leading you through this exciting investment opportunity that uranium offers each of us and that some of you may be profiting from the news we supply. Good health and good trading.

©, LLC - read disclaimer