thechinesearecoming

The past few months have been very hard on the uranium mining industry's equity investors. Many
uranium companies' shares are trading near 52-week lows after a handful of problems have crept up for
many in the industry. Now that the market seems to have priced in the mining problems at a handful of
companies, the fact that many drill results are going to take longer than expected to be examined, and
the fact that some companies' treasuries were struck by the sub-prime CDOs which have ravaged many
balance sheets, it appears that a bottom may have been reached.

The low prices set by the uranium equities lately have attracted the attention of a few prospective
buyers. It seems that the Chinese have finally arrived to the market- as some have expected for years
now, much as the French did during the American Revolution. That was a pivotal moment during that
war, and if the Chinese are serious about locking up supplies through agreements and acquisitions, then
this will be a watershed moment for the uranium mining industry as a whole. This market has been
waiting for a catalyst to reverse the current trend, and that moment has potentially arrived as Bloomberg
has reported that Chinese officials with China National Nuclear "met with their counterparts" at Cameco
Corporation (CCJ). These same officials were quoted as saying that they were looking for deals in the
range from, "several hundred million dollars to more than a billion."

This is very positive news regarding the industry as a whole, as the Chinese have finally "tipped" their
hand, and should they go through with a deal, will have shown the world that they really are serious
about building all of those nuclear power plants they have plans for. Most likely the Chinese would look
at a company like Uranium One (UUU.TO) as a takeover target and to Cameco to fill supply needs. A
small list of potential candidates the Chinese could purchase is listed below, and all of these companies
fall within the range mentioned by the China National Nuclear official.

Potential Take-over Targets for the Chinese:

Laramide Resources Ltd. (LAM.TO) and Paladin Energy Ltd. (PDN.TO) would both be attractive targets
for the Chinese, especially Paladin, however they have already angered the Australians and these two
companies are Australian so there is probably not much chance for a deal to get done. Mega is
interesting as it is a very well diversified uranium explorer with properties in Australia and Asia which
would be enticing to the Chinese as it would supply them with a pipeline of advanced projects close to
home.

Cameco is also rumored to be a target for Rio Tinto, which would be an easier combination for the
companies as Canada would be less hesitant to allow the merger, but our belief is that you must wait
regarding this rumor as Rio Tinto was rumored to want to dump many of their uranium assets to increase
returns for shareholders in order to spurn the BHP deal. We leave the door open however, due to the
fact that over history the best way to fend off a hostile takeover is to engage in a large merger yourself.

Theinvestar's Canadian Uranium Average has fallen to lows not seen since its inception. Sadly we have
had to lower the intersection of the X and Y axis further and further down, however this could be a trend
which may soon reverse. We are seeing strength among companies which have been stuck at or slightly
above their 52-week lows (which incidently are also multi-year lows) as well as a general up-tick among
many of these equities. Volatility is creeping up along with share volume, and from those who we talk to,
we get the feeling that many investors are coming back to the market at these depressed prices.

Our sources have told us repeatedly over the past few months that many equities were ailing as a result

Company	Ticker Symbol	Market Capitalization (Rounded)
Denison Mines Ltd.	DML.TO, DNN-Amex	1,454,000,000
Forsys Metals Corp.	FSY.TO	286,000,000
Mega Uranium Ltd.	MGA.TO	419,000,000
UEX Corporation	UEX.TO	865,000,000
Uranium One Inc.	UUU.TO	1,988,000,000