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URANIUM & ALTERNATIVE ENERGY 4

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Fossil Fuels Still Rule But Don't Worry -- We Have Plenty Of Uranium


The 2014 Annual Report of the AAPG Energy Minerals Division Committee (Michael D. Campbell, Chair) just came out and its findings are quite interesting (EMD Uranium 2014). It’s a good read if you want to know the state of uranium in the world, but also covers a lot of material on all energy fronts. I have taken freely from it for this post. Full disclosure – I am on the Advisory Group to this committee.

Energy minerals focus on ores of uranium, thorium and helium-3 as materials useful for fission and fusion reactors. But rare earth elements (REE) and other energy-important or high-tech materials are also included (see figure below). Although coal is the most developed of all energy minerals, it has its own category and is not included in EMD analyses. Oil and gas are not minerals as they do not have a defined three-dimensional arrangement of their atoms in space, the definition of a mineral.

The common wisdom, that limited uranium supplies will prevent a substantial increase in nuclear energy, is incorrect. We have plenty of uranium, enough for the next 10,000 years. But uranium supplies are governed by the same market forces as any other commodity, and projections only include what is cost-effective today. Like natural gas, unconventional sources of uranium abound.
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The energy stage for this report was set by the U.S. Energy Information Administration’s International Energy Outlook 2013 projections that global energy use between 2010 and 2040 will grow by 56%, from 524 quadrillion British thermal units (Btu) to 820 quadrillion Btu (EIA today). Most of this growth will come from outside the Organization for Economic Cooperation and Development, in non-OECD countries (the developing world) where demand is driven by steadily-increasing economic growth (OECD).

In general, the outlook for significant changes to the world’s energy mix is not good, and business-as-usual appears to be winning over significant change towards alternative energy sources. Global energy-related CO2 emissions are projected to increase by 46% to 45 billion metric tons in 2040. Fossil FOSL -0.74%-fueled economic growth in developing nations accounts for most of the increased emissions. Actions taken by the U.S. and Europe will have little effect on global output.

Nuclear is still increasing by 2.5% per year globally, but renewables, including hydro, are now the fastest-growing power generation sector, growing at about 4% per year, and will make up almost a quarter of the global power mix by 2018, up from an estimated 20% in 2011. Non-hydro renewables are projected to increase by about 10% per year in the next several years almost doubling in the seven years, from 4% of global total power production in 2011 to almost 8% in 2018 (IEA).

However, fossil fuels will continue to supply over 70% of world energy use (power plus transportation) through 2040 unless China and India continue their recent interest in new nuclear power plant construction in place of coal plants. Natural gas is the fastest-growing fossil fuel, as global supplies of gas from tight sands, gas from shale, and coalbed methane increase.

Natural gas is the fastest-growing fossil fuel, as global supplies from tight sands, gas shales, and coalbed methane increase (EIA detail). Coal is expected to decrease as a source of power generation as natural gas, nuclear, and renewable energy increase.

Industry continues to use the largest share of delivered energy produced, and projections indicate it will consume more than 50% of global delivered energy in 2040.

Top: The plasma torch in the Retech plasma furnace at the Ames Lab is used to create ultra-high purity metal alloy samples, particularly rare-earth metals. Source: DOE, Ames Lab Flickr. Middle (from left to right): the five rare earth elements (REEs) – dysprosium, terbium, europium, neodymium and yttrium. Bottom: Various elements were assessed for criticality in wind turbines, EVs, PV cells and fluorescent lighting, and are graphed as Importance to Clean Energy versus Supply Risk. Several REEs were found to be in critical need over the next 20 years. Source: DOE http://energy.gov/sites/prod/files/DOE_CMS2011_FINAL_Full.pdf



While the report focuses on the status of the uranium industry, other industries are discussed. Following is a list of the Committee’s key findings concerning energy minerals with a rather complete discussion of uranium resources.

• Japan will most likely re-start many of their nuclear reactors with improved safety factors over the next few years because Japan has no realistic alternatives. They will remain the third-largest user of uranium in the world.

• The current status of U.S. reactors include 100 reactors in full operation, 5 under construction, 25 in the planning/permitting stage, and 32 in permanent shut-down or retirement.

• China has 20 operating nuclear power plants (only 1% of their total power produced), another 28 under construction, and has brought 3 nuclear plants on-line in 2013. An additional 50 nuclear plants are in the various stages of planning and permitting.

• 2013 U.S. uranium production increased by 16% over that of 2012, the highest production since 1997. At present, 83% of U.S. nuclear fuel demand is met by foreign sources, such as Canada, Australia, and Kazakhstan.

• Uranium spot prices will likely remain around $35/lb for yellowcake (U3O8). However, upward cost pressure is growing because of future demands from China, Japan, and new construction.

• China is considering the use of thorium technology in their nuclear-reactor designs to reduce their growing need for uranium. Thorium is under serious study to replace uranium in reactors via Thor Energy and a consortium involving Westinghouse and others.

• Canada continues to produce world-class uranium deposits in the Athabasca Basin in northern Saskatchewan with record high uranium grades above 20% U3O8. Cameco CCJ 0%’s Cigar Lake deposit in Athabasca Basin is expected to produce 18 million pounds of U3O8 by 2018 or about 9% of the world’s uranium supply per year. Cameco also owns and operates the McArthur River Mine in the Athabasca Basin, which produces about 13% of the world’s supply.

• Australia’s Olympic Dam uranium mine is owned by BHP Billiton BHP +1.26% and produces about 6% of the world’s supply. Australia’s Ranger uranium mine is owned by Energy Resources of Australia produces about 5% of the world’s yearly uranium supply. Other uranium mines in Australia also rank high in production, such as the Beverly and Honeymoon Mines, with the Four-Mile Mine nearing production. In Western Australia, Cauldron Energy is having success with its metallurgical testing of its Bennet Well deposit and is preparing for production in the hopes of increases in U3O8 prices.

• Giant uranium producer, Rio Tinto RIO -0.31%, is having environmental problems with leaching-tank leaks at both the Ranger Mine in the Northern Territory of Australia and at its Rossing Mine in Namibia (SW Africa).

• Kazakhstan mines produce about 36% of the world’s yearly uranium supply, most of which go to Russia and China.

• Argentina has a number of uranium deposits under development to fuel their two existing nuclear reactors, with a third reactor coming on-line in 2014.

• Greenland’s Kvanefjeld deposit in the Ilimaussac Complex located in Southern Greendland is under development by Greenland Minerals & Energy, Inc. and contains significant uranium, rare earths, and zinc. The local and national governments are supporting the project.

• Mongolia has substantial uranium resources. Russia mined these deposits to 1995, and then resumed in 2008. Russia is negotiating to develop other deposits in the area but is having issues with the political risks involved within the government. Mongolia is attempting to improve its nuclear mining regulations and laws.

• In Africa, Gabon, Mauritania, and Zambia have emerged with viable uranium resources; but doing business in such remote regions are challenging both financially and geopolitically. Some mines in Africa are closing in response to these difficulties.

• Tanzania has a number of developing uranium deposits. The East African Resources, Inc. (EAR) has arranged financing to fund further exploration on its Mabada deposit. Other deposits are under development by EAR with a South Korean group and by a Russian group (Uranium One).

• India is looking to Central Asia to meet its uranium needs, such as Uzbekistan, Kazakhstan, and Mongolia, as well as Australia.

• Reports have surfaced that China now controls the market on up to 15 strategic minerals including REEs and graphite, while Russia exerts major control on palladium, platinum group metals, and nickel, as well as uranium via Kazakhstan.

• The U.S. DOE has identified five elements of the REE group as the most critical to U.S. industry: dysprosium, neodymium, terbium, europium, and yttrium. These elements are key components for high-tech magnets, lasers, semiconductors, lamps and special glass. Concerns are that China may be only able to produce enough heavy REEs to supply its own needs leaving the world with an inadequate supply.

• To counter this problem, the State of Alaska is helping to fund a rare-earth mine, Ucore Rare Metals, Inc. In Canada, the government is considering providing funds to secure REE supplies via Pele Mountain Resources, Inc. In Europe, Tasman Metals, Ltd. could become a dedicated supplier of REEs to the European Union.

• Ocean-Floor Mining permits by the United Nations continue to increase in the Pacific, Mid-Atlantic, and Indian Oceans. Ocean-Floor Resources may contain more than 27 billion tons of nodules consisting of over 290 million tons of copper, 340 million tons of nickel, and very large reserves of REEs. The environmental challenges will be different than for mining on land, but should be better since removal of material will be minimal compared to land mining and no processing will occur within the ocean.

It appears from this report that sufficient mineral resources exist to support significant growth in nuclear and renewable energy, and high-tech industries, but that fossil fuels will continue to dominate the world’s energy supply.

If we want to change this future, we will have to change the developing world more than our own.

http://www.forbes.com/sites/jamesco...nt-worry-we-have-plenty-of-uranium/?ss=energy
 

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[h=2]Japan’s New Energy Plan Could be Positive for Uranium’s Future[SUP]1[/SUP][/h]Monday April 14, 2014, 4:30am PDT By Teresa Matich[SUP]2[/SUP]
Exclusive to Uranium Investing News[SUP]3[/SUP]






[SUP]
4
[/SUP]Japan isn’t giving up on nuclear yet, and its Cabinet’s recent approval of a new energy[SUP]5[/SUP] plan could be the first step toward a uranium market turnaround. The plan calls the heavy metal “an important baseload power source,” reinstating its importance in the Japanese energy mix.



The plan also confirms that Japan’s “[nuclear] reactors will be restarted once their safety is confirmed,” and is the first since Japan halted[SUP]6[/SUP] the operation of its nearly 50 nuclear reactors following the Fukushima disaster in early 2011.


Thursday night, the Japanese government approved the energy plan following drafts released earlier this year. A prior draft meant to be released in January was seen by a panel of experts as too dependent on nuclear energy, but Reuters[SUP]7[/SUP] states that Prime Minister Shinzo Abe fought for months to convince fellow Cabinet members to accept a draft that reinstates nuclear power. Still, Japanese Industry Minister Toshimitsu Motegi told the news outlet, “[t]he plan makes clear we will reduce reliance on nuclear power through a variety of measures.”



Reactors back online?

Japan has struggled so far this year to restart its nuclear reactors, and the official statement on the issue in its energy report signals that the island nation is serious about getting its plants up and running. The country’s Nuclear Regulation Authority as well as local governments must still give final approval for individual restarts, but as Raymond James analyst David Sadowski explains in a note to investors, the statement still represents “a major hurdle cleared in the effort to restart the nation’s reactors this year.”

Sadowski also said, “we believe that NRA approvals on [the first] units may come as soon next week as part of the Japan Atomic Industrial Forum in Tokyo.”

Cantor Fitzgerald analyst Rob Chang has similar views regarding the energy plan’s approval, commenting in a note to investors, “[w]e did see this as a rubber stamp however it did take longer than we thought. We expect 2-6 reactors to be approved and/or restarted this year — two in the next three months.”

Others are more wary. Reuters[SUP]7[/SUP] points out that high upgrade costs, local opposition and seismic risks could mean that many reactors will stay closed despite the recent announcement, while Paris-based independent energy consultant Mycle Schneider told the publication, “I think it is unavoidable that the Japanese utilities will write off most of their nuclear ‘assets’ and move on.” However, Japan’s resource-poor economy cannot continue to support current levels of spending on the costly fossil fuels that have replaced nuclear since the reactor shutdowns.

As Akio Mimura, chairman of the Japan Chamber of Commerce and Industry, stated[SUP]9[/SUP], “t is essential to quickly recover a low-cost and stable power supply system by restarting reactors whose safety is confirmed.”


A catalyst the market has been waiting for

Uranium Investing News wrote in February[SUP]6[/SUP] that uranium market watchers have been waiting for a definitive signal that Japan is ready to put its reactors back to work, and Thursday’s energy plan approval could be the “rubber stamp” that this is about to happen soon.

Sadowski sees “restarts as the most important catalyst for increased utility contracting and eventual higher uranium prices.” He calls the “increased visibility on restarts” a “critical psychological catalyst for the sector,” and states that once the first reactors start to return, global utilities will end their 17-month buyers’ strike for the metal.

However, Sadowski also notes that the uranium spot price was at an eight-year low of US$33.30 per pound last week, and suggests that prices will stay below $40 through 2014. He writes that progress in Japan will be more effective at strengthening uranium equities in the near future, but that uranium prices will wait for the medium and long term before rising.


http://uraniuminvestingnews.com/181...an-could-be-positive-for-uraniums-future.html
 

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Planned uranium mine in South Dakota clears key hurdle

Cecilia Jamasmie| April 14, 2014






A proposed uranium mine in western South Dakota's Black Hills may have gotten a license to operate last week, but opponents say the company will have to clear several hurdles, as they'll fight the move.

The US Nuclear Regulatory Commission’s controversial ruling comes four months in advance of a public hearing the body had scheduled to hear arguments against Powertech Uranium’s (TSE:pWE) proposed mine and in situ recovery facility, AP reports.

The regulator concluded the plant’s operation would be safe enough, “including management of radiological and chemical hazards, groundwater protection, and eventual clean-up and decommissioning."

In a statement, Powertech President and Chief Executive Officer Richard Clement said the company had confidence in the team that put together the application.

“The issuance of the NRC’s final license is the culmination of eight years of planning and evaluation and confirms again that our plan for in situ recovery mining at Dewey-Burdock is safe and will have minimal environmental impact,” Clement said.

Opponents fear that the mining would pollute the environment and upset American Indian burial grounds and said they would ask a judge to issue a stay against the license.

"Just because a pro-nuclear agency has given this a green light doesn't mean it's a good idea," Lilias Jarding of Clean Water Alliance told the Rapid City Journal.

Backers argue the proposed Dewey-Burdock mine would bring jobs to the area and tax revenue to the region and the state, note supporters.

Powertech is merging with its largest shareholder, Azarga Resources. The new company will be known as Azarga Uranium.


http://www.mining.com/planned-uranium-mine-in-south-dakota-clears-key-hurdle-34453/
 

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We have to talk about Fanya Metal Exchange

Frik Els
April 18, 2014







Bismuth is a lead substitute and pearlescent pigment widely used in the cosmetics industry (hence the picture of a fashion model).

Explorers and miners hardly ever give bismuth a second thought.


And fewer still bother to indicate Bi reserves in reports (with one notable exception and for good reason).

It's relatively abundant (11 parts per million in earth's crust compared to gold's 0.0013) but usually in negligible concentrations. Only one mine in Bolivia and one in China mines bismuth ore.

Pretty boring topic then, much like rare earths were a decade ago. When the rest of the world handed the industry to China on a platter.
We all know what happened then:



  • REE prices went into the stratosphere (for example, dysprosium prices did a bitcoin, rocketing from $118/kg to $2,262/kg between 2008 and 2011).
  • Scores of explorers jumped into the space with Canadians and Australians finding deposits all over the world from Manitoba to Malawi.
  • Old mine plans were dusted off and punters poured billions into the sector.
  • Trade spats ensued, lobby groups sprang up and politicians even found ways to bash Barack Obama over rare earths.
  • Rare earths became the basis for a bestselling video game and Hollywood came to the party, albeit unfashionably late, using samarium as a plot device and confusing entertainment writers everywhere.
  • Even Kim Jong-Un got in on it.

If silver – which it also trades – can be cornered by two brothers who knows how far Fanya's ambitions reach



Fanya is not quite Wall Street, but the exchange has now opened in the Shanghai Free Trade Zone.

If silver – which it also trades – can be cornered by two brothers who knows how far the Fanya's ambitions reach.

Fanya makes no bones about its ultimate goal as a state-sanctioned operator.

In its mission statement it talks of China's "unique advantage in rare metals" and goes on to say that "from the perspective of the world economy, the protection and utilization of rare metal has been related to a nation’s strategy, safety and development."

Granted, a shortage of bird shot, Bi subgallate, Moodstruck Minerals Blusher and Pepto-Bismol does not rank as high as control systems for jet fighters (that can't fly without samarium according to Frank Underwood) or absorbers in nuclear reactor control rods.

We could probably get by without cheap, readily available and in-volume bismuth.

But why should we?



Image of bismuth germanate scintillator crystals by Savannah River National Laboratory.

http://www.mining.com/we-have-to-talk-about-fanya-37437/
 

fat panther

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Overall positive, me thinks

But where is any other news these days? Very quiet.
 

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Massive Merger in Peru Creates Major Uranium Company

Financial PressFP Exclusives
April 30 2014


Azincourt and Macusani Form Global Uranium Player



China’s government confirmed 2013 uranium imports reached 19,000 tons of uranium concentrate, exceeding current demand by 7,000 tonnes. China plans to install 50 GW of nuclear capacity by 2017, a 300% increase from currently levels of about 16 GW.

On April 17, 2014Macusani Yellowcake (YEL-TSX.V) (QG1-FRANKFURT) and Azincourt Uranium (AAZ-TSX.V) announced a planned merger that will create one of the largest undeveloped uranium projects in the world.

The merged companies will have a total combined resource of 49.67 M lbs of Measured and Indicated (M&I) contained U[SUB]3[/SUB]O[SUB], [/SUB]and 47.49 M lbs of inferred contained U[SUB]3[/SUB]O[SUB]8[/SUB].

Azincourt CEO and President Ted O’Connor spent the last decade assessing uranium projects around the globe. He previously worked in senior management positions at Cameco Corporation (CCO-TSX; CCJ-NYSE) – an $8 billion company and one of the world’s largest uranium producers. AAZ’s chairman, Ian Stalker, is the former CEO of UraMin which was sold to Areva for $2.5Bn.

Ted O’Connor will be appointed as CEO of Macusani following completion of the transaction, and Laurence Stefan, current President and CEO of Macusani, will continue his role as President and COO. Mr. O’Connor and Ian Stalker, Chairman of Azincourt, will also join a six member board of directors of Macusani.

The deal appears highly advantageous for current AAZ shareholders and indicates a good entry point for savvy commodity investors.

Azincourt retains its joint venture in Saskatchewan, Canada with the Athabasca Basin’s leading exploration company, Fission Uranium (FCU-TSX.V) exploring the highly prospective Patterson Lake North (PLN) property, while gaining 68 million common shares of Mucusani, a larger uranium company in Peru.

The PEA’s base case evaluation concludes a post-tax Net Present Value of $417 million – 15 times the current combined market capitalisation of both companies.

Macusani and Azincourt will combine their respective Management Teams and Board of Directors to create a wider, deeper pool of expertise to drive development and capital market activity as well as minimising the related overhead costs.

“This transaction represents an inflection point for both Macusani and Azincourt,” stated Ted O’Connor, current President and CEO of Azincourt, “As a former Director with Cameco, I’ve had the opportunity to evaluate uranium projects all over the world and I believe that the investment community will be very hard-pressed to identify an investment opportunity in the uranium sector that is more attractive in the context of the current market than Macusani.”

The Athabasca Basin of Saskatchewan, Canada hosts the world’s richest uranium deposits. Fission Uranium recently reported a drill interval of 38% U3O8 over 10.5 metres. That is approximately 380 times richer than the world average grade of 0.1% U3O8.

Fission Uranium’s stock price has increased 178% in the last 12 months based on the results of a strategic drill program on the Patterson Lake South uranium property.

Last month, David A. Talbot, a senior uranium analyst with Dundee Capital Markets, initiated coverage on Azincourt with a “BUY, Venture Risk, No Target”.

We believe that investors should buy Azincourt Uranium for its prospectivity in the Athabasca Basin,” wrote Talbot, “It’s our opinion that PLN represents a top three location in the PLS discovery area, and this new player has one of the best technical teams drilling the ground.”

PLN is adjacent to Fission Uranium’s shallow depth, high-grade uranium discovery at Patterson Lake South. Fission Uranium’s spin out company, Fission 3.0 is the new partner and operator on this project, with the same technical and management team as Fission Uranium.

On April 24, 2014 Azincourt exercised a Year 2 Option with Fission 3.0 at PLN, announcing an aggressive exploration program beginning immediately on quality targets.

The initial exploration program completed in 2014 proved the prospectivity of the conductive/structural systems that were drill tested, as well as identifying a new 8.5 km northern conductor system target. Other targets were refined throughout the entire project area.

Azincourt will continue funding exploration work into Year 2 of its earn-in Option at the PLN project. Work is starting well ahead of the June 19 anniversary date

AAZ plans to complete DC Resistivity surveys on the northern conductor and Broach Lake Conductor systems with line cutting and grid preparation already underway. Diamond Drill holes are also planned for the summer and fall as follow-up on the A1 and A4 conductors and on any land-based resistivity targets.

The merger positions Azincourt shareholders to own two distinct uranium investments with different risk/return characteristics: Macusani, a pure-play, dominant uranium development company focused in Peru and Azincourt, an Athabasca-focused uranium exploration company.

China has 28 reactors under construction with five scheduled to be connected to the grid in 2014. China is suffocating in a cloud of pollution. Nuclear is the only solution. Domestic uranium mining currently supplies about 25% of China’s uranium demand.

Azincourt is currently trading at .17 with a market capitalisation of $8.4 million.

Legal Disclaimer/Disclosure: A fee has been paid for the production and distribution of this Report. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. No information in this article should be construed as individualized investment advice. A licensed financial advisor should be consulted prior to making any investment decision.

Financial Press makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of the author’s only and are subject to change without notice. Financial Press assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this article and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this article.


Also, please note that republishing of this article in its entirety is permitted as long as attribution and a back link to FinancialPress.com are provided. Thank you.


http://financialpress.com/2014/04/30/massive-merger-in-peru-creates-major-uranium-company/
 

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COFFEE WITH CARROT HEAD!

URANIUM, THOUGHTS EXPECTATIONS AND A WAY OF LIFE.

Good Morning. Its been a while since I put finger to keyboard and wrote a coffee article. Usually at this time of the year a new thread is started, unfortunately the past 12 months have not really been that active so I decided to continue with this thread for the coming year.

Just to recap from the previous article; I stated that the time of April and May could see the stocks reverting back to a slide and that it would be prudent for those who invested early to take some profits. I think this was a good call and further to that I mentioned several support areas for some of the companies. As shown below;


FCU.V- fussion uranium has been driven higher based on its recent findings and the merger with its partner. There are two good support areas for FCU one is at 1.55 and another at 1.43. A break below these two areas can see it retest the 1.20 area and stability at this area can lead to a rise again. There are several minor support areas for the price between 1.43 and 1.20. 1.30 is a good half way point.

CCO.TO- Cameco can be on the verge of making a down turn and retest the 25.50 area if this breaks below we can possibly get an opportunity to get in at 22.50.

PDN.TO- Paladin is retesting currently the 47 cents area but if this support breaks we can see it retesting the .4250 area. PDN is currently in a short term down trend so please wait for a good opportunity; while it is tempting to purchase at the lower prices I prefer to wait for the stocks to begin trending upwards before purchasing.

DML.TO- Dennison like Cameco is making a U turn and heading a little downwards. A possible retesting of the 1.64 area and a break below this can see the 1.45 area being retested.

Of the above mentioned FCU surprised us and dropped below the 1.20 support area this week with 1.19. We could possibly see Fusion retesting the 1.15 mark and a break below that the 1.00-1.05 area would be exposed.

Cameco has hit our mark today of 22.50 and bounced a little, a break below this area which is a major support area can see a retest of the 20.50 area. ON the RSI it has dived under the 30 area and we can see a bounce from here but if it does not break past the 25.00 price we will see it attempting to break below the 20.50 area at the end of Spring. Ideally and a dream wish would be to see Cameco break down to the 14.50 area and this would be followed by a bounce upside first to retest the 25.00 area followed by a break of the 27.50 area. However I really do not see that happening. Ideally we could see more likely a retest of the 18.50 -19.50 area and then a bounce back up.

PDN.TO is behaving exactly as we expected it to and it is likely to retest the area of .4250 in the near future possibly even go down to .3700. This again historically is a major support area for their price and really nothing much has changed.

Dennison has broken past the support area of 1.45 whether it will bounce from here or retest the 1.25 to 1.20 support area is anyones guess.

I would like to re-iterate an important point ; The price of the stocks is a reflection of the combination of Uranium spot prices, and the downward slide of the general stock market reinforced by the seasonality decline that we usually find in the months of April to May. Reflecting on the S&P; I would say that more often than not; IF the S&P has a good first month it usually finishes in positive at the end of the year. So a decline in the stocks now would give us time to prepare for a strategic investment in June and July. This may be followed by a lull or downside in August followed by a thrust upwards from the middle of September. In short the stocks we are looking at are as healthy as they can be based on the circumstances they find themselves in. The opportunity to move in will perhaps come later in the year.

We still continue to focus on three producers and two explorers from the vast plethora of stocks available to us to discern. The reason is that these stocks have either good management, good deposits or good geographical locations or a combination of the above.

The latest report from Cameco on their first quarter is worth reading (posted earlier); Not for the sake of their financials, rather their outlook for the coming ten years is more interesting. Their expectation is; Uranium demand will increase roughly 4% on a yearly basis. Initially this does not look so good but if you consider the figures over a period of 10 years it is substantial. Currently we are consuming roughly 160 million pounds and Cameco produces about 30 million pounds all of which, is booked. The free market supply currently figures between 5 and 10 million pounds supply from Japan and one or two other countries. When Japan begins to reactivate some of their units and China continues to bring on new ones we will see this factor of par supply and demand diminish and demand will outstrip supply leading to first an average natural price rise but additionally we will also see speculative price rises as the news settles in and takes root that this issue is not going to go away. For every action there is a reaction. Unfortunately one cannot control the time this reaction will take place but the fact that the price has dropped so far has had repercussions in the Uranium industry by reducing the number of explorations on going as well as reducing the need for production. If licenses are not maintained or mines simply do not have the capacity to sustain maintenance may lead to restarting the processes of production practically form the beginning leading to ten year delay gaps and thus accentuating the supply demand gap further. There are approximately 60 nuclear power plants under construction, well over a hundred in planning and all this obviously takes time but they expect that in the coming ten to twenty years we will see massive demand rise.

Many of us came to the party too early. As early as 2006 I was in the Uranium sector actually little before that. Despite some of us being early to the party and having the capacity to take the whipsaws we have seen in the Uranium sector, I still believe that the fundamentals are very strong, but the downside to fundamentals are the sentiment issues. In the short term the sentiments always win which is why it is vital to get in when the price is weak provided you strongly believe in the fundamentals. We have an opportunity to get into this sector this summer. I cannot tell if this will be the lowest however what I can tell is if the prices begin to move up you will be in profit and where I can I will inform you early to exit if I see the sector dropping, as I did at the beginning of May. It is impossible to predict the exact time to exit. I will give a warning and it is up to the reader to make the move.

Gold has begun to decline as I expected it to. The reason I expected it to drop was not genius on my part, I simply looked to the left of the chart and noted that it was in down trend since its high and generally despite some corrections to move up it has lost strength and waits for a large interest to occur. This in the past has occurred at 1185.00 on two occasions and despite bouncing managed the first time to go above 1420 but the second bounce after retesting was 1390.00 As you note the second bounce was lower showing less interest by the bulls and more by the bears. Therefore it is possible to test 1185 again but more than that it is possible for the bears to push it further down. We can see retesting of the 1000 or perhaps a little lower. I think at that point there will have gathered tremendous interest in gold possibly to push it up to 1400 from there its possible to test all previous resistance levels and break them depending on the interest in buying. I sincerely believe that we will see 1185 tested this year, a failure to do so will show early interest in gold and this is a good sign to push back the price of gold to all time highs. I am simply looking at this form a sentiment point of view evaluating technical charts to give me some guidance as to where gold could go. If we break 1185 below then we can see a test of 1140, 1125, 1095, 1070 1020, 950 The good support areas are 930, 1080-1090 and 1170-1185. Please be careful in these areas and if in doubt but in profit get out and wait for another entry. At present the sentiment is on nervousness due to the Ukraine crisis. This may escalate and will be reflected in the price of gold moving higher. There are a lot of rumors going around that this is the beginning of third world war. Perhaps! Who am I to argue for or against the case, rather I prefer to simply reflect on the direction of movement and let the politicians do what they do best, which is to let their egos fly by the seat of their pants and consider the consequences later or perhaps not at all. Regardless my conclusion is; At present it is better to remain away from Gold and await; either a really remarkable downslide and get in at the bottom or alternatively await a break above 1320.00 showing a serious power to move up.

Cameco has reached a possible pivot area and downside seems to be loosing momentum. It is possible to see Cameco either taking a breather here creating a continuation pivot point rising a little before beginning to drop once more or alternatively beginning to move up from here, thus creating a true pivot point reversal. This is time to keep a close eye on the prices from here especially Cameco as this is the leader of the pack and usually this leads.

BLDP and FCEL earlier last month rose to breathtaking heights. At which point they ran out of breath and I tried to short them but unfortunately due to the size of the stock it was impossible. Alas two great short calls and I could do neither. Note; both these companies are manufacturers of fuel cells and bot moved up on the basis of PLUG getting a good order from Walmart. It was speculation and would have run out of steam. Both are loss making companies. Cameco on the other hand is making good profits and at the same time issuing dividends. Fuel cell companie in the future will make good money perhaps in ten or twenty years and the stock will possibly fly. However wait for the current downside to loose steam and the stock to stabilize before you risk your capital Now is not the time to catch falling knives. The only thing you will have are a couple of cut fingers.

Solar companies similarly went on a serious push up but since then have begun to drop the leaders are changed a little First solar appears to give in to Canadian Solar CSIQ and TSL follows a close third. These make up the group along with others such as JASO. All are in a downward slide so either short or wait for the slide to end before you decide to take a plunge.

About thirty five years ago I had a close friend, unfortunately fate took us in different directions and we lost touch. He moved several cities and I too moved on to study and tried to make a living. Recently with the miracle of Facebook I was able to get in touch with him and we have been talking almost daily. My friend (Lets call him MD) MD is going through a harrowing divorce. I am unsure as to what there is to divide (except money) and perhaps pain, but what is more crucial, is to understand what exactly went wrong with what we would term as; “The dance of the eagles and to pair for life”.

This is not the first case, a good internet friend is also currently going through a similar experience and it saddens me to realize that most live their life superficially. It appears the world is geared to greed. How can trust turn to mistrust, anger and finally deceit? There are no morals left in society. Both my friends are being taken to court over a business or property. In retrospect another friend who lives in Africa has had; “what I term as a common law wife”, and he has lived with the same lady for well over thirty years and has five children with her. He is as happy as one can be with a life partner, but his case is an exception rather than the rule. It appears that a partner who does not have the law entirely his or her way does not take the partnership for granted. However when an agreement is drawn up the law gives backing albeit one lopsided and partners begin to take the relationship for granted. Very soon people forget why they got married in the first place and the battle begins.

I believe that it begins with an amber of either deceit or mistrust or simple inability to adjust. Once this molecule settles in; like a tick it begins to suck the blood of a relationship. Where there was only trust now festers mistrust and leads to anger and sometimes violence.

My friend blindly in love, got married and moved to the US. There he traveled with his wife finding work. He is a software engineer and so is his wife. After ten years and a son the lady decided that she wanted to end it all and ripped their life apart. Women can be soft, but some can be as sharp and ragged as black beards blade. They play the game of manipulation and are not too concerned about what weapons they use in the fight.

Its amazing to watch how they will not consider the future life of their son or daughter and simply look at their own selfish needs, even though the child is used in the game as a pawn. I suppose I am of old school and though was unhappy about my own marriage, my wife and I agreed that divorce was not an option for the sake of the stability of the children. This view point has become old fashioned and outdated. Love is like a beautiful rose bush, full of thorns on the way up and a blossom only once in a while but the joy of that is worth all the thorns.

The reason for this too is money. Families ten decades ago had less divorces simply because there was strength in unity and co-dependence. For the actual survival of the couple it was important to remain together and eventually learnt to co-exist. More children were important as the mortality rate was higher, now there is less risk and the ability to get aid makes it a lot easier to move on.

More importantly the actual increase in numbers of educated women has brought to the forefront the issue of equality and the lack of need for a husband as he no longer is the only bread earner, and yet the laws of our land remain ingrained with the view point of the weaker sex, favoring them and they rightly enjoying this advantage.

Where in the world does it say that a woman is more capable of bringing up a child than a man and why? Worse still the media provides continuous stories of horrendous men and weak poor women subjugated to violence and torture, where the truth is so far from this that we can stand on the moon and not be able to see it.

The laws of the land need to change and understand that men can be equally tortured in a relationship and if women want equality then by right they have to give as much as they take. Both my friends currently live to near poverty as is possible while the ladies of the house live in the house, and own their businesses. Where is the fairness in this, when both men created the business and used their knowledge to bring it to where it is presently? While the women may have played a part in the business, the law seldom takes this in account when making decisions.

Ladies consider this; you have no right to reap a harvest when you have not partaken fairly in the planting or the sowing. Nor do you have the right if you did not till. The fact that you bear children does not mean it was an ordeal.

My case in point would be when there is an itch in your ear is it the finger that is satisfied or the ear when it is scratched? The issue that man ravage and plunder are days gone by. I believe that most men are now more civilized and less devious than women are currently. It appears that there is a battle constantly going on and men are fool enough to fall for the ploy every single time.

Consider the institution of marriage only and only if divorce will not be an option. If not then be mature enough to clarify and coexist until such a time when trust has built a foundation which cannot be rocked no matter how big an upheaval shows its face. The issue of sex before marriage is no longer a valid issue. The lack of understanding of moral issues and the lack of understanding the point of religion has created this whole issue of; “So what!” Further to that please consider a prenuptial agreement. If the lady refuses; walk away from the table and do not turn back no matter what the reason.

Marriage itself requires more careful thinking and perhaps it is more prudent to let the chemistry actually run out of reaction to enable one to consider carefully the institution of marriage. I am not saying that one should shun responsibility of a child out of wedlock. The responsibility is of both. These issues were less when there were joint families and there were more restrictions. Remarkably it appears that market factors are making this a possibility again as it becomes more and more difficult to live independently and the need for numbers is becoming more important once more as the financial calamity forced many to give up on the idea of getting early onto the property ladder. Now it takes two and then some to get onto the property ladder and even then sometimes not.

Another friend of mine had to dissolve the marriage and lost ten years of his working life simply because the lady involved wanted a separate house away from his parents, now many of us know that Italian families find a lot of joy in joint families and when people do not realize the importance and strength of a joint family they focus on the single minded objective of separating their spouse from the rest of the family. In this case my friend put his foot down and told her to haul ass.

One really must question the importance of marriage and what it stands for. LOVE??? What is love?? What is the definition of Love? Does anyone understand that love is given and never taken just as respect is given never taken, in fact all good things are given never taken. You only need to look at nature to understand the definition of love. It is simple and the rules are clear. Yet we humans have become highly skilled at one thing above all, how to destroy something that works. The one thing we all must take in a marriage or any other venture is; responsibility.

We are the only group that has sub groups that have infighting, not as individuals but as groups. Where in nature do we see a gang of snakes attack another gang or a gang of lions attack another, or a gang of bison attack another gang? The rule of removing a leader is the law of nature so that the strong only survive and weak genes are destroyed, but in humans our very nature goes against nature and we; incredibly are given the responsibility for the welfare of this planet.

The definition of love is; “Sacrifice”.

When we truly love anyone –and I see this even less than ten carat diamonds. We give –not take. We do things for others without asking.

I recently helped a neighbor out by clearing up frost from her car windscreen. I put the defrosting spray and cleared it up as I saw she was running late for a school run. After she left, my other neighbor came out and started on me by instructing me not to help. Why? I asked; to which he replied that she would never help me if the tables were turned.

My reply to this is; If I did a deed with the expectation of gaining a favor in return I shall be sorely disappointed and it actually negates the whole point of doing a deed. I did not do this deed in faith that my neighbor will reciprocate. I agree that I am selfish , because I did gain something out of doing this. It made me feel good. My neighbor does not understand this.

The word to remember here is; Expectation.

When we expect something for something we often get disappointment, which leads to anger which eventually leads to some conflict. Whether its with neighbors, friends or wives or husbands the story is more often the same. Expectation defeats the purpose of the deed, and dilutes its essence.

Often we may see an exception when it come to children when true love seems to emanate and parents will often do things for their children without expectation and at that time we see more joy on their faces then at any other time in their lives. Yet we do not emulate this with anyone else; Why?

They say that we have the super rich and the desire to be one, and perhaps it makes no sense now but money does not appear to bring happiness, simply because we cannot change our nature. I do not think it is wrong to make a great deal of money but I also think that while we get rich in the pocket it is equally important to get rich in the soul and in the mind. Change your thoughts for it is a thought that leads to an action that leads to a path that leads to a plan, that leads to a way of life. The direction of the thought will dictate the direction and destiny of your life.


Have a good trading week.

SAGI:cool1::beerglass:
 

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Will anticipated Modi centric government lift 10% gold import duties?
BY PAUL PLOUMIS
May 15, 2014 • Reprints


While the exit poll results have become favorable to Bharatiya Janata Party (BJP), the Indian gold market believes strongly that the upcoming BJP led government would reverse the high gold import duties.

According to reports, the domestic gold industry had begun to offer support to Prime Ministerial candidate Narendra Modi since last year when the incumbent Congress led government started to enforce gold-unfriendly policies. The UPA government was blamed for hurting the people’s religious and cultural sentiments over gold by blocking the inflow of the precious metal.

However, Narendra Modi has not hinted at any relaxation on gold import duties so far. Neither did he mention it during election campaigning. As per the BJP’s election manifesto, the party led government intends to bring down the CAD by promoting gold exports.

The Reserve Bank of India (RBI) had imposed 10% gold import duties to curb escalated Current Account Deficit in last year. As per norms, the government has limited influence on the policies and decisions by RBI. The 80:20 law which stipulates that 20% of all new shipments must be re-exported before the next consignment can be cleared is said to have contributed very much to India's narrowed down Current Account Deficit (CAD).

Unlike the U.S. and the E.U. where the investors seek gold as a safe haven, majority of Indians buy gold for their domestic needs during cultural and religious ceremonies.
 

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something may be going on with Ditem exploration DIT.V its appears to have unusual volumes traded today about 5 or 6 times normal

SAGI
 

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Japan Rules No on Nuclear Plant Restart
Thursday May 22, 2014, 4:30am PDT
By Vivien Diniz+ - Exclusive to Uranium Investing News




Uranium prices have not been giving investors many reasons to celebrate of late. The spot price has been in a steady decline for several months, and most recently checked in at $28 per pound of U3O8.

Of the many factors keeping the uranium market weak, oversupply is a top contender. As Ray Goldie of Salman Partners explained to BNN‘s Andrew Bell, despite being in a deficit, “inventories are sufficient that the consumers of uranium who produce electricity aren’t concerned.” Goldie went on to add that “[e]very year there is a mating season where the producers and the consumers of uranium get together to decide on contracts. One is in April — that’s past — and nothing happened this year because there is too much uranium to engage in much mating.”

The expectation is that when the second “mating season” comes around in the fall, the uranium deficit will have finally caught up to the market, and prices will reflect that accordingly. That once again reinforces uranium bulls’ steadfast optimism in the face of today’s weak market. For his part, Goldie speculates that a turnaround will come “as early as September.”
No nuclear restart … for now

One of the most anticipated catalysts for the uranium market came to pass this week; however, the result was not exactly what the uranium market had been hoping for.

A Japanese court ruled against Kansai Electric Power (TSE:9503) carrying out a restart plan for two idled nuclear reactors, claiming that they are potentially vulnerable to earthquakes. According to the Financial Times, the decision by the judge in Fukui prefecture “could disrupt an already complicated and politically charged effort to restart some of the 50 Japanese reactors that have been shut over safety concerns since the Fukushima disaster.”

The rare victory for anti-nuclear proponents may be a blow to government efforts to end a nationwide nuclear freeze, but it does not block a restart, as according to Japanese law, the ruling is not final. As Reuters states, ”the district court decision does not legally block the restart of the reactors, bringing them back online in the face of such a judicial verdict could open the regulator and the government to criticism.”

That being said, the “ruling may not remain in force for long,” as per the Financial Times, because “[t]he regional high court in Osaka, whose jurisdiction covers Fukui, has already rejected several similar suits brought by citizens’ groups.” The company plans to appeal the ruling.

As far as nuclear power is concerned, Japan’s population remains skeptical and fairly divided, with opposition running about two-to-one based on recent polls. As Reuters notes, a March survey shows that roughly 80 percent of the people in Japan would prefer to see a gradual move away from atomic power.

Summer is coming to Japan

As Japan approaches another summer without nuclear power, companies like Kansai Electric Power are already cautioning that they will have “nothing in reserve when seasonal demand peaks.”

“We have managed to secure the minimum necessary power surplus thanks to the support of other utilities companies,” Jiro Kagawa, vice president of Kansai Electric Power, told South China Morning Post, adding “ut we have virtually no extra power supply.”

While the country has already seen three summers without nuclear power, the fear is that “fading public consciousness” will result in people not curbing their power consumption. Additionally, Japan’s national economy has started to pick up, meaning that demand from the industrial sector could possibly see a boost.

As South China Morning Post explains, previously, “the government has set numerical targets for companies to reduce their energy consumption in order to avoid blackouts.” However, Tetsuo Kotani, senior fellow at the Japan Institute of International Affairs, believes that “the government fears that setting limits on energy consumption will stifle the nascent economic recovery and put Japanese firms behind their overseas competitors.”

Company news

This week, Cameco (TSX:CCO,NYSE:CCJ) announced that it has pulled back its applications to license the Millenium mine in Northern Saskatchewan. Citing a weak market, the uranium giant has opted to wait out current market conditions instead of moving ahead with the project, which is located 36 kilometers north of Key Lake. Cameco was granted approval for development from Saskatchewan’s environment minister in December.

According the the Canadian Nuclear Safety Commission, Cameco can still apply for a new license application at a later date.

On the junior side, Kivalliq Energy (TSXV:KIV) has teamed up with Westham Resources (TSXV:WHR.P) for continued exploration at the Genesis property in Northeastern Saskatchewan. While the transaction between the two companies is still subject to certain conditions, Westham can acquire an 85-percent interest in Genesis in exchange for: 20 percent of the issued and outstanding shares of Westham on a post-transaction/post-financing basis, C$1 million in cash payments and C$5 million in exploration expenditures over four years.

Per Kivalliq’s latest press release, once Westham has gained the 85 percent of Genesis, Kivalliq’s remaining 15 percent of the project will be carried out through the bankable feasibility study and a recommendation from the board of Westham to move forward with commercial production. Kivalliq will be the project’s operator for the first two years.

Wyoming’s newest uranium producer, Uranerz (TSX:URZ,NYSEMKT:URZ), submitted its license application for its third Powder River Basin mining unit, Jane Dough, to the US Nuclear Regulatory Commission. The Jane Dough permit area is contiguous and immediately south of the producing Nichols Ranch.

“Now that the Nichols Ranch facility is fully operational, we see the Jane Dough unit as being the next project to be developed. Given that this application is being filed as an amendment to the existing Nichols Ranch ISR Uranium Project license, we expect to see considerable time savings in the NRC review and approval process,” Paul Goranson, president and chief operating officer, said in a company statement.

Results from sediment samples tested at Alpha Exploration‘s (TSXV:AEX) Carpenter Lake project were encouraging this week. According to the press release, lake sediment results assisted in determining whether radon anomalies may be sourced from the overburden or bedrock directly beneath, which will be a valuable tool in developing future exploration programs on the property. The company plans to continue with a summer exploration program; it will include a detailed high-resolution airborne gamma radiation spectrometric survey.

Uranium Energy (NYSEMKT:UEC) picked up the Longhorn project in Central Live Oaks County, Texas, which is on trend between two former US Steel production areas. The ISR project has an existing aquifer exemption that provides the company with three big advantages:

It eliminates a major permitting hurdle.
It means no amendments are necessary as the existing aquifer exemption already includes the mining zone.
The aquifer exemption is big enough to allow additional expansion without amending the boundary.


Securities Disclosure: I, Vivien Diniz, hold no investment interest in any of the companies mentioned.
 

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Bargain hunters descend on uranium stocks

Frik Els | May 23, 2014








Gentleman, place your bets


More bad news for the uranium market this week did not deter bargain hunters from returning in a big way on Friday with across the board gains for miners and explorers following the brutal correction in the sector since March-April.

Uranium investors have been waiting for a very long time for a restart of nuclear reactors in Japan to ignite the market, but yesterday those hopes were dashed.

A Japanese court halted plans to restart two idled nuclear reactors near Osaka – the first such intervention since the Fukushima disaster three years ago and also the first time a lawsuit brought by anti-nuclear plaintiffs has been successful in Japan's forty-year history of nuclear power.

Even before the Japanese news the U[SUB]3[/SUB]O[SUB]8[/SUB] spot price continued to slide, hitting a fresh nine-year low of $28 a pound on Monday and down 31% over 12 months.

The long term price, where most uranium business is conducted, stayed at $45, the lowest since 2008 and down 21% over the past year.

Even before the bad news from Japan the spot price hit a fresh nine-year low of $28 a pound





That compares to $67 prior to the Fukushima disaster in 2011 and all-time highs of $135 in 2007.

Canada's Cameco (TSE:CCO, NYSE:CCJ), the world's number one listed uranium producer, added to industry gloom announcing this week it's putting its Millennium project in Saskatchewan on hold due to poor market conditions.

But with supply contracts measured in decades, uranium mining requires very long term investment horizons and on Friday investors were taking the long view:

Units in industry behemoth Areva (OTCMKTS:ARVCY) trading over the counter in New York gained 2.2%, building on its advance in Europe earlier in the day. The state-owned French company has stakes in various projects and producing mines in Canada and Africa.

Given its size, $8.3 billion Cameco's gains were modest, but further down the market cap list shares jumped.

Denison Mines (TSE:DML) gained 4.3%, returning the counter's 2014 market value to positive territory following a sharp correction in May.


The depressed spot price makes mining anything over and above contractual obligations a losing proposition





Denison, now worth $582 million on the Toronto big board, holds exploration and development projects in Canada, Zambia, Namibia, and Mongolia including high grade Phoenix deposits discovered in 2008 located on its 60%-owned Wheeler project. The Toronto-based company also owns 22.5% of the McClean Lake mill.

Energy Fuels (TSE:EFR), the US's largest uranium miner supplying 25% of the country's output with mines in Utah, Arizona, Colorado and Wyoming surged 8% after electing a new board.

$381 million Paladin Energy (TSE:pDN) climbed 2.6%. Australia-based Paladin operates a uranium mine in Namibia and various exploration projects on the continent.

Explorers which have descended on the super high-grade Patterson Lake area in Saskatchewan abutting the Athabasca Basin had mixed success on Friday.

Nexgen Energy (CVE:NXE) advanced 2%, while Fission Uranium (CVE:FCU) was the odd one out on the day with a decline of 2.5%.

Vancouver-based Fission is one of the few counters in the sector still showing gains for 2014 although the stock is well below its March-April peaks. A 10% run up in Fission shares has lifted the explorer's market value above $400 million.

Emerging producer with in-situ recovery Lost Creek project in Wyoming Ur‐Energy Inc. (TSE:URE, NYSE MKT:URG) cut its sales guidance for 2014 and 2015 which boosted the stock. The depressed spot price makes mining anything more than under contractual obligations a losing proposition. The Colorado-based company is valued at $135 million.

Uranium Energy Corp.(NYSEMKT:UEC) gave up earlier gains to trade flat by early afternoon. The $144 million explorer with a number of properties across the US have been picking up projects in Texas, including the Longhorn Project which already have some permitting in place, earlier this month.

Image of traders at Sao Paulo stock exchange by Rafael Matsunaga

http://www.mining.com/bargain-hunters-descend-on-uranium-stocks-67991/
 

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Across the board gains?

Guess I'm not looking at the correct sector

Maybe just me.
 

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Uranium fall dents Olympic outlook

BARRY FITZGERALD
The Australian
May 27, 2014 12:00AM


Uranium spot price chart

Uranium spot price chart Source: TheAustralian

BHP Billiton’s recasting of its *expansion plans for its Olympic Dam copper/uranium mine in South Australia’s outback have been served up a new challenge — the collapse in uranium *prices.

Spot uranium has fallen 30 per cent in the past 12 months to $US28.15 a pound, plunging most of the world’s uranium-only mines into losses. More telling has been the steady decline from the record price of $US137 a pound in mid-2007, due in part to the fall in demand in the wake of Japan’s Fukushima nuclear disaster in 2011.

BHP dropped plans for a big-bang expansion of Olympic Dam in mid-2012, blaming the $30 billion cancellation on the over-heated resources sector and the country’s high-cost environment. Concerns about uranium’s outlook post-Fukushima was also a factor.

At the current depressed *prices for uranium, the nuclear fuel represents less than 20 per cent of Olympic Dam’s revenue stream. But plug in last year’s *average industry contract price for uranium of $US57 a pound (most uranium is sold on a contract basis rather than spot), and the fuel’s revenue contribution soars to 30 per cent, substantially enhancing project economics in the process.

When it shelved the big-bang expansion plan, BHP said it would investigate a less capital-intensive design, and one that drew on new mining and processing technologies to improve the economics of the project.

BHP chief executive Andrew Mackenzie also undertook in September to say more about plans for the expansion “within about a year’’. While that timing is almost up, BHP’s considerations of what the price slump means for the future of what is the world’s biggest uranium deposit makes its planning for an expansion all the more complex.

Like the rest of the industry, BHP will be pinning its hopes on the restart of nuclear power plants in Japan, and the forecast surge in China’s nuclear power industry, to eventually produce more sustainable prices — in the context of being able to make a profit from the material at any rate.

John Borshoff, chief executive of the ASX-listed African uranium producer Paladin, is Australia’s resident bull on the outlook for uranium, even if one of Paladin’s mines is being put on care and maintenance during the price storm.

Mr Borshoff said it would be wrong to lose sight of the emerging supply shortfall in uranium due to the absence of supporting “incentive’’ prices needed to underpin new developments.

Mr Borshoff told investors on Paladin’s March quarter conference call that according to the company’s own analysis, a supply shortfall of 31 million pounds could appear in 2020. “It can be strongly argued that this shortfall is now almost certainly structurally embedded in the production growth capability or, more correctly, incapability. Until this is realised, there is real danger ahead,’’ Mr Borshoff said.

He said a widening supply gap was set to come into effect from 2016-2017, with uranium prices moving ahead in anticipation in late 2014-2015.

Mr Borshoff’s optimism is largely shared by Tim Gitzel, the chief executive of Canadian uranium giant Cameco, which owns two of the world’s biggest undeveloped uranium deposits in Western Australia — Yeelirrie and Kintyre.

But Mr Gitzel is more guarded.

“For the near to medium term, demand remains discretionary while supply is performing reasonably well and utilitie’s requirements remain well covered,’’ Mr Gitzel told analysts.

“As a result, uranium prices continue to suffer downward pressure and we do not see any reason to expect improvement soon.’’

That means that neither Yeelirrie, acquired from BHP, and Kintyre, acquired from Rio Tinto, are not about to be developed anytime soon.

However, Mr Gitzel shares Mr Borshoff’s optimism about the longer-term outlook.

Which is just as well, given that the 2008 acquisition of Kintyre, and the Yeelirrie acquisition in 2012, represent a combined $US925 million ($1bn) bet that uranium will eventually work its way back to a level that justifies their development by Cameco.

Mr Gitzel said that tentative restart of Japan’s fleet of nuclear power stations — confirmed in the recent new energy policy — was a positive for uranium.

“We remain confident in the long-term fundamentals, which indicate a clear progression of growth.

“Today, there are 70 reactors under construction around the world representing billions of dollars of investment and significant growth in future uranium consumption,’’ Mr Gitzel said.

Cameco estimates that more than 90 new nuclear reactors will start-up over the next 10 years, with significantly more to follow in the following 10 years.

“Nuclear energy continues to be an integral part of the world’s energy mix because it is one of the most important tools we have to combat climate change and to provide safe, clean, reliable and affordable base-load energy to rapidly expanding economies,’’ Mr Gitzel said.

“So, we remain excited about the future and are prepared, as a company, to meet it head on.’’

For battle weary investors in the uranium sector, it is a well-worn thematic.

It was what drove uranium prices to their peak in 2007. But then came a rush of new production, the additional supply that came from the decommissioning of weapons grade material under the now completed “bombs to ploughshares’’ program, and the hit to economic growth and electricity demand from the global financial crisis, which got going in September 2008 with the collapse of Lehman Brothers.

Just as the case for uranium’s role in combating global warming was gaining strength after the GFC, and prices were firming, the March 2011 Fukushima nuclear disaster set uranium on new spiral downwards, one which has helped to take prices to the current lows.

But based on the same sort of market analysis provided by Mr Borshoff at Paladin, and Mr Gitzel at Cameco, there is now broad agreement among analysts that the uranium price has bottomed.

Eddie Rigg, managing director of the resources specialist broking firm Argonaut, said it was not a question of if uranium prices rebound, but when.

He said it had to be remembered that at a price of $US35 a pound and below, no one in the industry was making money.

Given demand growth seems to be on track, Argonaut expects a $US70-a-pound price is the required incentive price needed to ensure future demand is met.

UBS has a long-term price expectation of $US55 a pound, with a restart of Japanese nuclear reactors a near-term catalyst.

“Should we see this occur and investment in new mine supply remain low, then the uranium price could exceed our current forecasts,’’ UBS said.

http://www.theaustralian.com.au/bus...olympic-outlook/story-e6frg8zx-1226932345135#
 

fat panther

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I'm going to instruct my children, when I pass, to not let my grandchildren sell off my sizable holdings of near worthless uranium stocks. LOL
 

SAGI

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What can I say FP. I don't believe its just a dream.

I think that trees that grow slow also grow strong. They may take a long time to germinate, and perhaps even longer to turn from a sapling to a strong tree. Soft wood grows quick but dies quick. A giant red wood will take hundreds of years to grow to the hight and strength it is today, but its roots run deep, provide a strong foundation.

Uranium is not a piece of paper created by man, for the use of an excuse. I believe its a very real solution to a very real problem, but like many other things will be a final resort rather than one that should be applied first. It just human nature to do so. Yes, perhaps it will not be us who will see the benefit, but than perhaps we are geared to look after future generations because our state of immortality is dependent on them surviving. We live through them even if they forget us our genes do not.

Be patient my friend, perhaps we will see some benefit before we move to our next station.

SAGI
 

SAGI

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Ed Sterck: Russian Sanctions May Have Utilities Squeezing Less Juice from Uranium Supply
Wednesday April 30, 2014, 12:55pm PDT
By thegoldreport+ - Exclusive to Uranium Investing News



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Source: Tom Armistead of The Mining Report (4/29/14)

Russia is a commodities giant, but supply isn’t the major issue—enrichment is. With a 44% global market share, Russia’s enrichment industry allows utilities around the world to squeeze more juice out of fewer lemons. In other words, Russian sanctions could mean utilities may have to use more natural uranium to make lemonade. That’s how Edward Sterck sees it, and the uranium mining analyst for BMO Capital Markets predicts a supply deficit by 2018. In this interview with The Mining Report, Sterck delivers a comprehensive uranium market overview and shares uranium names that can juice profits in lean times.

The Mining Report: Edward, welcome. Russia is facing international sanctions. How will all this affect the uranium market?

Edward Sterck: It hasn’t yet had any impact. Sanctions haven’t been brought in that are affecting the Russian nuclear industry, but there is the potential for that to occur. Indeed Rosatom, which is the Russian state umbrella company that covers Russian nuclear activities, has made a statement to the effect that business is continuing as normal, including the delivery of nuclear fuel to Ukrainian reactors, but sanctions could affect its ability to make deliveries under current contracts to Western utilities and Western customers in general.

If that occurs, it isn’t likely to have an impact on the supply of natural uranium to the market, but Russia is the world’s biggest supplier of enrichment, and it has a number of western customers for that enrichment.

The potential for reduced availability of enrichment capacity to the West could have a knock-on effect on uranium prices. The way in which this could occur is a little complicated, but effectively if you’ve got reduced enrichment availability to make a required amount of nuclear fuel, you can compensate by using more natural uranium and then less enrichment. The analogy is that to make orange juice, you can either squeeze a given number of oranges to get a given amount of juice or you can use fewer oranges and squeeze them harder to get the same amount of juice. Effectively, if sanctions are brought in against Russia and they do encompass the nuclear industry there, we could eventually see a knock-on effect and an increased demand for natural uranium from western utilities.

TMR: And what about Japan’s restart?

ES: At the moment there are 17 reactors that have been put forward for the restart process. Two of them have been shortlisted for restart. Those two reactors are going through the final rounds of safety checks and public consultations, but unfortunately at this point we still don’t have a clear idea of what the timing would be. Prime Minister Shinzo Abe’s government is keen to see the first restarts before the summer, which is the period of peak electricity demand in Japan. If that occurs, we could see the first reactors restart around the middle of the year. Hopefully some further reactors restart after that.

In terms of what reactor restarts in Japan mean for the market, it’s more of a derisking event for the equities and probably won’t have an immediate effect on the uranium price. Since Fukushima, Japanese utilities have by and large continued to take deliveries of their contractual commitments, so they have accumulated quite significant levels of excess inventories. Their engagement in the market and their need for new material beyond what they’re already contracted to take will probably remain fairly suppressed for quite a few years to come, even after restarts have commenced.

TMR: Given the long-depressed uranium price, is that going to extend the doldrums for the price?

ES: Not necessarily. One of the impacts of the low price is that producers are beginning to shut down production. Some of the higher-cost operations, such as Paladin Energy Ltd.’s (PDN:TSX; PDN:ASX) Kayelekera project in Malawi, are being put onto care and maintenance. No new significant projects are being pushed forward at the moment for production. In this case, the knock-on effect of low prices is a reduced supply outlook.

Despite Japan, we do still have a nuclear industry that’s growing, driven mainly by China, but also by some of the Middle Eastern countries and a handful of other places. That does lead to future demand growth for natural uranium. On my estimates we end up in a situation where supply is insufficient to meet demand in 2018, and it enters a fairly deep and sustained deficit thereafter.

There are some positive price indicators. Last year the long-term contracting market was extremely quiet. Normally you’d see around 170 million pounds (170 Mlb) of uranium signed into long-term contracts, but the volume was only about 20 Mlb last year. Utilities appear to be pretty well covered for near-term requirements, and they were putting off signing contracts as a result. This year, the amount of contracting activity has picked up. A number of U.S. utilities in particular are coming to the market looking for long-term contracts, which suggests that they are beginning to feel that they are less well covered than they perhaps were at this time last year. It’s interesting to note that they are typically looking for new contracts on a fixed-price basis, which suggests that utilities think that prices probably have to rise at some point in the future as well.

TMR: Since you spoke with The Energy Report nearly two years ago, the uranium price has continued to trend lower. What has kept you interested in the uranium space?

ES: One of the reasons I’m interested in the uranium space, and also quite a number of investors are, is that when the uranium price moves, it tends to move quite dramatically. That also translates into movement in the share prices of the uranium mining equities. It’s a subsector of the mining space that’s worth keeping an eye on because there’s an opportunity there when it does begin to move.

TMR: What is the significance of Denison Mines Corp.’s (DML:TSX; DNN:NYSE.MKT) discovery at Wheeler River?

ES: It’s probably the best exploration project that Denison has. It’s a typical Athabasca-style deposit consisting of high-grade mineralization in quite a small area, which makes defining it quite tricky. It requires a lot of precision drilling. At the moment I’d say that the defined resource isn’t substantial enough for it to be a candidate for a development decision, but Denison has had some recent drilling results in a separate zone about 3 kilometers away from the existing resource that has returned some interesting hits that it plans to follow up on in the summer drilling program.

If Denison manages to expand the mineralization it has identified in that separate zone, it’s possible that it could get to the point where Wheeler River reaches a critical mass. I think it would probably also require higher uranium prices than what we see today, but to be completely honest, that’s probably the same as any uranium exploration project right now. I can’t see anyone pushing ahead with development decisions at $35/lb U3O8. Given mining costs, you’d have to have a very special project indeed to make that sort of decision.

TMR: What is Denison after in acquiring International Enexco Ltd. (IEC:TSX.V; IEXCF:OTCQX; I6E:FSE)?

ES: Denison has made a few acquisitions over the last 18 months or so. I think that International Enexco falls into its strategy of building a substantial land package in the Athabasca. It’s about controlling acreage and building up an interesting exploration portfolio. Denison has also acquired some companies with assets in Africa. The company has said that its plan is to become an Athabasca-focused exploration company and then potentially spin out its African assets as a Denison Africa stock play.

TMR: What’s the thinking behind your market perform recommendation on Paladin Energy Ltd. (PDN:TSX; PDN:ASX)?

ES: Paladin is in an interesting but slightly tricky place right now. It’s got two producing assets, one of which, as I mentioned earlier, is being put on care and maintenance, but operationally it has made some significant improvements at both its cornerstone projects, Langer Heinrich and Kayelekera. It has been driving down operating costs. Langer Heinrich, the operating mine, is still the focus. Paladin recently sold a minority stake in that to raise some cash.

Paladin’s balance sheet is somewhat stretched at the moment. It took on a lot of debt during the uranium boom to build these mines, and the cash flows in this uranium price environment have not allowed Paladin to meaningfully pay down that debt. That’s the rationale behind the market perform.

The projects look interesting, albeit that Kayelekera is on care and maintenance at the moment, and certainly have a long-term strategic value. If we see the uranium price go up, you’ve got a ready-built mine with a 3 Mlb capacity at Kayelekera, and Langer Henrich has several decades of resource life. The challenge is that leveraged balance sheet, so the market perform reflects the two conflicting attributes of Paladin: the positive attributes and then the negative attributes of the balance sheet.

TMR: What is the significance of Cameco Corp.’s (CCO:TSX; CCJ:NYSE) startup of its Cigar Lake mine?

ES: It’s a pretty significant project, almost on par with its biggest operation, McArthur River. It should be a relatively low-cost operation, coming into the first quartile of the cost curve once it’s at full steam. Cigar Lake is an important project for Cameco for future cash flows. It replaces the material that Cameco benefitted from through the Megatons to Megawatts deal between the U.S. and Russia, where Russian warheads were being downblended and sold to western utilities. Cameco was one of the conduits for that uranium to reach the market. The company is now working through the last of the inventory from that. Cigar Lake is a pretty key project for Cameco, and for nuclear utilities of the world.

TMR: AREVA SA (AREVA:EPA) has the McClean Lake mill near the Cigar Lake startup. Is CIgar Lake going to significantly increase the value of that mill?

ES: I think the value of McClean Lake is one that will benefit from Cigar Lake material going through it, but it also benefits more from a strategic value, which is quite hard to put a dollar figure on. It’s one of only two mills up in that part of Athabasca; the Rabbit Lake mill is not too far away from there. I think permitting a new mill today in that area with a new tailing facility would probably be challenging. If we look at the other projects that might be developed in that region, the likelihood is that you’d probably have to toll treat material through one of the existing mills. That’s really where the strategic value of McClean Lake comes in.

TMR: Are there any other companies in your uranium coverage universe that you see as attractive takeover prospects?

ES: At the moment, not really. I think most companies have their heads a bit below the parapet. We are seeing a bit of consolidation in the mid- to small-cap space, but it’s mainly Denison taking over smaller companies. Within the larger caps, I would expect the status quo to continue. If we saw uranium prices fall further and Paladin was looking more and more distressed due to the balance sheet, then someone could make a low bid for them. I’m not sure we’re there just yet. I think that would require a lower share price than where we stand today.

TMR: Do you see any really exciting companies in your coverage universe that we haven’t discussed?

ES: I think if the uranium price goes up, most of the uranium equities should benefit. It just comes down to everything being somewhat hinged on the uranium price at the moment. I’m waiting for that turnaround to occur.

TMR: I’m impressed with what we’ve covered today. Thanks for your time.

ES: You’re welcome. Thank you.

Edward Sterck covers uranium, diamond, platinum group metal and European copper mining companies for BMO Capital Markets. He joined BMO in 2007, prior to which he was a mining analyst at Hargreave Hale. Before working in mining research, he spent more than four years trading government bond futures on a proprietary basis. Edward holds a Bachelor of Science in geology with honors from the Royal School of Mines, Imperial College London.

Want to read more Mining Report interviews like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To view recent interviews with industry analysts and commentators, visit The Mining Report homepage.
 

searcher

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[h=1]Uranium: The Metal of Tomorrow[/h]Jeff Desjardins

on August 12, 2013 at 10:22 pm



Nuclear power accounts for 5.7% of the world’s energy and 13% of the world’s electricity. Uranium, used in nuclear power, is a relatively clean source of energy that does not produce greenhouse emissions.

Uranium is extremely dense – it is nearly as heavy as gold. It is, however, about 500 times more common than gold in the earth’s crust.
This infographic covers the history of uranium, its properties, the supply and demand forecasts, the advantages and disadvantages of nuclear power, uranium as an energy source, and military applications.


http://www.visualcapitalist.com/uranium-metal-of-tomorrow/
 

SAGI

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COFFEE WITH CARROT HEAD!

THE CURE IS MORE PAINFUL THAN THE DISEASE.

Good Morning! Once more I apologize! It takes longer and longer to type out articles now, however I continue to make every effort to be as regular as possible in getting information out to the readers.

To recap on where were with Uranium stocks;

Cameco has hit our mark today of 22.50 an d bounced a little, a break below this area which is a major support area can see a retest of the 20.50 area. ON the RSI it has dived under the 30 area and we can see a bounce from here but if it does not break past the 25.00 price we will see it attempting to break below the 20.50 area at the end of Spring. Ideally and a dream wish would be to see Cameco break down to the 14.50 area and this would be followed by a bounce upside first to retest the 25.00 area followed by a break of the 27.50 area. However I really do not see that happening. Ideally we could see more likely a retest of the 18.50 -19.50 area and then a bounce back up.

I stated this a few weeks ago. Cameco has since continued to move down as predicted due to the season of lows which occurs in the months of summer. We are now currently at a price of 21.50 on the TSX CCO.TO and at 19.60 CCJ. A bounce did occur from around this area at the end of May but as since moved back down. We could see a retest of 20.50 and a break below leading to the testing of 18.50 or 19.50 on CCO.TO. on the NYSE we could see CCJ retesting around the 17.50 mark by the middle or end of June.

The Uranium ship is not really going anywhere as yet and it is bound to try our patience for a longer period of time.

There are only a handful of stocks worth watching which are;
CCO.TO, DML.TO, PDN.TO, FCU.V, GGG.AX, ACB.AX

On OTC and NYSE for us based tickers;

CCJ, DNN, PALAF, FCUUF, GDLNF, APCDF

Note that the last three will have little trading and so it may take a while to fill orders especially for Greenland minerals and A-Cap resources.

A-cap is considered the runt of the family, but this little stock has good potential due to the fact that its main resource is in Africa and it may surprise many if the price of Uranium begins to move up AND the company is able to accomplish its goals of mining uranium by 2017. With a resource of 310 million pounds of uranium in shallow ground makes it viable, cheap labour, a government that is supportive of any industry that will increase employment and political favor are all good reasons to keep this stock in mind as a potential candidate for investment. Add to this the fact that transportation is very near to its deposit and additionally they have also discovered a viable deposit of coal.

Greenland minerals is the next in line being in a politically stable country. They have discovered a multi mineral deposit which contains one of the largest rare earth deposits and added to that they have 550 million pounds of Uranium. Unfortunately one cannot come out without the other which is a double edged sword, in that Denmark who controls Greenland is not in agreement with uranium mining however Greenland has taken independence from Greenland and has given the go ahead. If the political steeples can be jumped Greenland minerals has the potential for becoming a very important miner or alternatively selling the deposit to a major. They already have a partner who appears to be a Chinese company (why am I not surprised) they have a non binding agreement but it can all change with leverage on the side of GGG if the politics change. It’s a chance but what huge potential. Again this is an exploration company with several holes in the ground but its worth considering them. GGG.AX is currently trading at 13 cents per share.

Fission Energy is an exploration company that was an off shoot of Strathmore minerals which separated its Canadian assets from its US assets. Strathmore in turn was bought out by URA and its CEO Amiir Adnani is now the CEO of URA. They are a producer in the US. Fission in turn partnered with Alpah minerals and finally bought them out so their rich deposit is one. This deposit is what is making all the headlines with great exploration and next highest to the wheeler river deposit. They have potential and can become a possible buy out just like Hathor was bought out by Rio tinto. Cameoc may eventually be interested or perhaps Dennison.

Paladin resources is a producer at a very cheap price partially due to their debts (read article above two posts. One of their mines due to high costs is on maintenance until the price fo Uranium increases while selling a small portion of their Langer heinrich mine. They also have a massive deposit in Nunavut of about 100 million pounds. They also have the Valhalla project in Australia so it’s a well diversified company. At 35 cents its pretty cheap and the reason is the price of Uranium as well as its debt at present.


Dennison mines owns the wheeler river project which has shown a high concentration deposit. It could be as little as 45 million pounds or it could be as much as 450 million pounds of uranium. Time will tell. Additionally Dennison has a share in the uranium mill where the Cigar lake uranium will be processed. Dennison also operates in Zambia, Niger, Mongolia and recently acquired rockgate capital and their Mali deposit. It is puzzling to see a small explorer gathring such a huge amount of ground but if we look at it from a macro point of view we realize two things about Dennison. 1. Its part of the Lundin Group
2. Its got a very good relationship with Areva and Cameco.
Areva is strong in West Africa and thus may have some knowledge of the area of the deposit in Mali. While Cameco is interested in acquiring more land in the athabasca region and near its own deposits. Dennison also purchased the topsails deposit by purchasing JNR resources two years ago.

At present Dennison appears to be concentrating on identifying the Phoenisx deposit at wheeler river and two others in the same area. It is likely that Dennison may eventually be bought out by either Areva or Cameco or the various deposits be sold off to the two companies. Either way Dennison has the potential to move significantly up in share price in the coming three to five years.

Cameco has not been in the process of acquiring any new land at present while it concentrates on Cigar lake. Once prices begin to give them confidence this may all change for the time being they may be inclined to see cigar lake go into full production to off take the shortfall of the mega tons program. Cameco in the short term is not immune to share price drop and the current trend is down. It would therefore be prudent for investors an traders alike to wait for the price drop to run out of steam before entering the market. A good area to watch is the 14.50 area where I expect Cameco’s price to find support. It is possible that we may not see this price but time will tell. Prices should stop dropping by the middle of July.

On Thursday the dollar saw a serious dip in its value across the basket of currencies. This means that there a lot of sellers of the dollar and it is possible for the stock markets which have been seeing some serious highs recently to have a correction. Early Thursday morning also saw the price of the Canadian dollar, Australian dollar and the south African Rand move up unusually. The one thing these three have in common is Gold. It is possible that gold may begin to climb shortly after the correction it has had throughout April and May. It may be short lived and we could see it return to its trend. In my opinion a short hike up may then lead to further lows which may consolidate at the end of July. A drop in the markets will only push the stock price for uranium stocks further down. Like anything else there has to be a bottom but before we reach there we may loose many of the penny stocks and their assets. Its not just the penny stocks but also the larger producers that are beginning to feel the pain of lower uranium prices where they are companies http://www.moneymorning.com.au/20140604/why-the-paladin-energy-share-price-fell-today.html unable to sustain production at such low prices leading to losses. Most are dependent on short term and long term loans of one format or another, whether this is through the orders of Uranium or otherwise through financial institutions or share placements, eventually they require to make payments but when the deals were made the prices may have been moving up but now with prices dropping below the support levels leaves many in a predicament. It is possible that there will be sellers in the market of deposits in the near future. Smaller companies may sell out to larger ones at far lower prices than they would expect in the recent past. Mergers of companies may also occur at market prices leading to those with deposits merging with those that do have some finances. There is yet no panic in the market because Uranium is such a small industry in comparison to other minerals.

Governments may step in to help out some of the producers, if it only to keep the material flowing for their own reactors, or in some case some countries will have a good opportunity to get bargain basement prices for deposits such as China as exploration companies find it difficult to raise capital.

Capital is key to any company continuing to make progress on explorations. We need to understand that this is a long term ongoing process and most exploration companies come to near depletion of funds before identifying a good deposit. There is another myth http://www.aheadoftheherd.com/Newsletter/High Grade v Low Grade.pdf out there that high concentration deposits are always better than low concentration ones. Actually this is not true. What matters is the net cost of mining and purifying the ore. It really depends on the individual company as to what their deal is but it is the actual cost of mining that matters. Uranium deposits come in many forms and simply having a high concentration deposit sitting 500 meters under ground with a lake on top is a lot more complicated and expensive than a deposit of low concentration sitting 50 meters under ground in a flat area with sand stone. One requires open pit mining while the other requires underground mining. There are hundreds of parameters to consider but we are not here to understand the dynamics of mining rather to look at a flat cost sheet and understand that there is a support area of cost price where it is conducive compared to the market price or not. There is a simple phrase that I come up on time and time again and I think it makes sense; “KISS” or ‘keep it simple stupid’. This works for all investments. The net profit return must be well above the base rate interest return for it to work, better still the net profit must be well above the loan rate return. Companies use words and more words on pages and pages of explanations which we must unveil to reveal the truth. Bring it down to basics and invest in only something that you actually understand.

Right now almost all uranium companies are making losses with the exception of Cameco, but if the price of uranium falls below 25 dollars I think Cameco will be in the net with all the other uranium fish. Dividends will drop in the coming year if this continues. Is there is support area? I think if we break below the price we currently are at in terms of contract price of 35 dollars we could see that drop to as low as 27 dollars. This year is going to be the make or break of uranium if the price does not stabilize and begin to rise.

Most currently explored deposits will have a base cost of between 30 USD to 45USD. Some a lot higher are simply not viable at present. CZQ.TO is simply not a viable option no matter how large the deposit. The cost of mining and processing the ore is simply too expensive at current prices. Even Greenland minerals deposit is not a viable project unless prices rise to well above 45 to 50 dollars despite the company stating that the cost of mining will be 31 dollars per pound of uranium http://www.wise-uranium.org/upgl.html but another more critical report http://ecocouncil.dk/en/component/docman/doc_download/1540-140426-kvanefjeld-report states other wise.

To add further pain to an already open wound the rate of the dollar continues to fall against various currencies. This could be simply an initially out flow of currencies to emerging markets as an anticipation of a follow the leader as US markets continue to gain with an imminent correction in the near future or it could be something bigger. Remember that 24 months prior to the 2008 crash the price of the USD against GBP was 2.11 for every GBP. Six months prior to the crash the price had dropped for GBP and the dollar went up by over 30 cents. The price of oil dropped just prior to the crash. It was almost as if the crash had been predetermined. The price of oil drops when there is more excess in the market, the price is determined by the supply and current levels of oil in storage. The price of the dollar also has an effect on the price of oil as the dollar rose to such high rates the buyers found it difficult to digest the sudden cost rise as oil prices in their own currencies suddenly moved higher very rapidly, demand dropped and so did the price accentuated by the crash we finally got a major dip from around 60 dollars to 40 dollars. At these prices we saw that costs were higher than spot prices. Notice a similarity in price drops in Uranium. The difference is that while oil is an open market uranium is a closed one and limited by its very nature. The demand is not instantaneous and neither will be the price hike even if Fukushima itself was opened tomorrow for production.

Even if Uranium is considered a devils energy, I would like to question the critics as to why solar projects are being shut down as too costly or simply not cost effective. How can solar –considered as free energy be costing us? Well it does and proponents of the so called energy http://www.theguardian.com/environment/2011/dec/11/sahara-solar-panels-green-electricity realize that there is a carbon foot print and that the actual cost of creating electricity is far higher than expected. While green buffs may not consider costs companies who need to profit do. http://www.euractiv.com/energy/desertec-abandons-sahara-solar-p-news-528151


While it is good to dream the carbon free world where our children will sleep in luscious green grass and smell the flowers and hear the birds, the reality is; It’s a world full of …..**** and its too late to take the soft approach. The hippy era went out of fashion forty years ago.
No one carries the peace sign.
The two finger signal has been replaced with a one finger one.

While I am a proponent of green revolution I suppose I may be considered a radical in that for change to occur one requires a more violent approach rather than the soft approach. In order for solar to become viable or some other solution to have a chance to be developed in the future but nuclear appears to be the only one currently viable if we are to significantly reduce the worlds carbon emissions in a systematic and significant now.

I can see windmills and more efficient solar systems and even hydrogen being part of the solution in the next fifty years, but before we can go into recovery we need penicillin or chemo therapy. Sometimes the cure is more painful than the disease. The initial cost of Nuclear power plants is going to be high and yes we will have to become more responsible for that power and we will need more protection from those who would like to use its power to destroy or hurt others for attention. However global warming and carbon emissions are not going away as long as we use coal and crude oil. The only way to reduce them is either we all begin to use bicycles, and public transport and get rid of our vehicles or eventually adopt a more greener version of the same vehicles we drive today and demand will force governments to adopt policies not based on green leftist radicals but the way the majority flow. It is wonderful to dream…and sometimes dreams do come true…but it is highly unlikely that other alternative energy such as wind and solar have currently the capacity to supply base power on demand and that is where the bottleneck lies , I do think wind and solar will play a major part in the production of power but it will take time.

While I do listen to green radicals I prefer to have reports from universities or legitimate organizations which have a leg to stand on that have done some research on the use of various power producers. http://engineering.stanford.edu/new...world-total-power-demand-2030-researchers-say while there may be some truth to being bias that goes for all of us. The difference is that we prefer to be bias towards the winners. It really does not matter which one wins as long as we are on that winning side. Nuclear, Solar, Wind, Hydrogen or any other solution will be acceptable as long as carbon emissions are reduced and global warming is brought under control. Right now Nuclear looks as a very viable system allowing 24 hrs of production of power day or night, rain or sunshine with a comparatively smaller foot print. The longer Japan http://www.reuters.com/article/2014/06/04/us-japan-nuclear-volcano-idUSKBN0EE2BF20140604 takes to come back on line the longer it is going to take Uranium prices to move up.


Gold had a little bounce this Friday reacting to the non farm payrolls. It was simply that and we continue to hold the position that it will continue to drop in price. The reaction of the USD index was a little more alarming, but on the whole it is likely that the US Dollar http://www.dailyfx.com/forex/fundam...the-Right-Cue.html?CMP=SFS-70160000000NbTmAAK will continue to rise for the near term. The pound and Euro being the major currency pairs against the dollar continue to resist dropping, with Draghi cutting interest rates to 0.1% the US markets continue to improve while Britain states that all jobs lost during 2008 have now been completely recovered. That being the case we also see prices for houses rising rapidly which the governor of the bank of England states is not a good thing and needs to be brought under control. Ideally this can be taken as a hint that interest rates in the UK will begin to rise soon to handle this and if this is the case it makes good sense to consider the GBP will rise against the dollar. Remember that all of this is anticipation and changes in Forex come very quickly. The rise of the US markets signals that there is a chance of greater inflow rather than outflow of money from the US.

Gold’s outlook as far as I can make out requires it to make a significant previous historical low, there are several support areas for the price. 1230.00, 1180.00 are two significant ones where a turnaround can occur. If gold climbs from here past the 1255 mark reaching and remaining over 1280 we can consider this to be a turning point too. It is a little early to conclude at present. Next week is the half way mark for June and we could see indications then if wants to continue to move down or begin to move up. Consolidation often turns to the preceding trend which in this case is down.

http://io9.com/watch-60-years-of-global-warming-in-15-seconds-1505924322 It just brings a little perspective to what we are going to face in the coming one hundred years. Enjoy!

Have a great trading week.

SAGI.:cool1::beerglass:
 

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The World's #2 Uranium Mine Starts Producing

By Dave Forest | Tue, 10 June 2014 13:56



The line on China has always been: companies here are primarily concerned with securing supplies of valuable commodities. With revenues and profits coming second.

That certainly appears to be the case with one of the latest Chinese mines to open its doors. In a commodity no one seems to think is profitable at today's prices.

That's the Husab uranium mine in Namibia. Which according to local reports started up production of ore last week.

The development is being led by China General Nuclear Power Corp (CGNPC). Who have designed Husab to produce maximum output of over 12.7 million pounds of uranium oxide yearly. Which would make the mine the second-largest uranium producer on the planet.

It will take some time to get there. With processing of ore into final product at Husab not expected to begin until next year. And full capacity not projected to be reached until 2017.

But even in the ramp-up phase this will undoubtedly be a significant contributor to global uranium supply. Possibly as early as several months out.

Of course, "global" supply is a misnomer in this case. With Husab's output expected to go to exactly one place: China. Where it will be used in CGNPC's growing fleet of nuclear reactors.

It's that sort of single-minded dedication to supply that appears to have driven Husab forward. At a time when almost every other uranium development project on the planet has been shutting down.

In fact, it's likely that Husab will be operating at a significant loss. Given that the hardrock uranium deposits of Namibia are noted as some of the higher-cost producers worldwide. Areva's Trekkopje mine here was in fact one of the first to shut down when uranium prices fell--having been idled since 2012.

All of which suggests the old wisdom about the Chinese push for resources at any cost has some truth to it. It's interesting to think about the effect on global markets when you have a major producer who appears to care little about pricing.

Here's to the start of something big,

By Dave Forest

http://oilprice.com/Finance/investi...e-Worlds-2-Uranium-Mine-Starts-Producing.html
 

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Denison Announces Phoenix Uranium Deposit Mineral Resource Estimate Now Over 70 Million Pounds
Denison Mines Corp.
2 hours ago
TORONTO, ONTARIO--(Marketwired - Jun 17, 2014) - Denison Mines Corp. (DML.TO)(NYSE MKT:DNN) ("Denison" or the "Company") is pleased to announce an updated mineral resource estimate for the high grade Phoenix uranium deposit on its Wheeler River project in Northern Saskatchewan.

Since the previous mineral resource estimate in 2012, Denison has completed 25 drill holes at Phoenix to convert inferred mineral resources to indicated, and to extend higher grade portions of the deposit. The result of these efforts is an increase in the total indicated mineral resource estimate from 52,300,000 lbs U3O8 to 70,200,000 lbs U3O8 based on 166,400 tonnes of mineralization at an average grade of 19.13% U3O8. This is a 34% increase in indicated lbs U3O8 over the 2012 estimate. Additionally, the total inferred mineral resource is now estimated to contain 1,100,000 lbs U3O8 based on 8,600 tonnes of mineralization with an average grade of 5.80% U3O8.

Wheeler River lies between the McArthur River mine and Key Lake mill complex in the Athabasca Basin in northern Saskatchewan. Denison is the operator and holds a 60% interest in the project. Cameco Corporation holds a 30% interest and JCU (Canada) Exploration Company, Limited holds the remaining 10% interest.

Summary Table

The following table summarizes the mineral resource estimate by classification.

2014 Phoenix Mineral Resource Estimate Summary
Category Tonnes Grade
(% U3O8) Million lbs U3O8
(100% Basis) Million lbs U3O8
(Denison's Share)
Indicated 166,400 19.13 70.2 42.1
Inferred 8,600 5.80 1.1 0.6
Notes:

CIM Definitions were followed for classification of mineral resources.
Mineral resources are reported above a cut-off grade of 0.8% U3O8.
The cut-off grade is based on internal conceptual studies and a price of US$50 per lb U3O8.
Numbers may not add due to rounding.
Effective as of May 28, 2014
Geology and Mineralization

Mineralization at Phoenix occurs 400 metres below surface and shares many similarities with other unconformity related Athabasca uranium deposits. It occurs along the sub-Athabasca unconformity at its intersection with a moderately east dipping fault zone which results in an elongate and sub-horizontal shape to the deposit. Fault zones are best developed in graphitic metasediments in the underlying basement rocks. Mineralization varies from disseminated to massive, with several very high grade drill hole intersections including WR-525 which averaged 43.8% U3O8 over an interpreted true thickness of 12.0 metres. Phoenix belongs to a select group of very high grade unconformity uranium deposits that includes the prolific McArthur River mine (37 kilometres to the northeast) and the Cigar Lake mine (80 kilometres to the northeast).

Estimation Methodology

The methods used to estimate mineral resources at Phoenix are the same as those employed in 2012. Denison used data collected from several surface diamond drilling campaigns from 2008 to 2014. Uranium grade data is comprised of chemical assays on half split drill core samples. All assays were completed by SRC Geoanalytical laboratories in Saskatoon, Saskatchewan using the Inductively Coupled Plasma - Optical Emission Spectrometry (ICP-OES) method. Quality control and quality assurance protocols for the chemical assays include the use of standard reference materials, blanks, check assays and duplicate samples. In those cases where drill core recovery is poor, chemical assays have been replaced with equivalent uranium grades obtained from down-hole radiometric probing.

Geology, structure, and the size and shape of the mineralized zones have been interpreted using data from 229 diamond drill holes which resulted in three dimensional wireframe models that represent 0.05% U3O8 grade envelopes. The mineralization model consists of a higher grade zone within an envelope of lower grade material, resulting in two main estimation domains - higher grade and lower grade. Additionally, a new domain representing a small zone of structurally controlled basement mineralization was added at the north end of the deposit.

Based on 196 dry bulk density determinations, Denison developed a formula relating bulk density to uranium grade which was used to assign a density value to each assay. Bulk density values were used to weight grades during the resource estimation process and to convert volume to tonnage.

Uranium grade times density (GxD) values and density (D) values were interpolated into blocks in each domain using an inverse distance squared (ID2) algorithm. Hard domain boundaries were employed such that drill hole grades from any given domain could not influence block grades in any other domain. Very high grade composites were not capped but grades greater than a designated threshold level for each domain were subject to restricted search ellipse dimensions in order to reduce their influence. Block grade was derived from the interpolated GxD value divided by the interpolated D value for each block. Block tonnage was based on volume times the interpolated D value.

The mineral resource estimate for the Phoenix deposit was classified as indicated and inferred based on drill hole spacing and apparent continuity of mineralization. The block models were validated by comparison of domain wireframe volumes with block volumes, visual comparison of composite grades with block grades, comparison of block grades with composite grades used to interpolate grades, and comparison with estimation by a different method.

Roscoe Postle Associates Inc. (RPA) was retained by Denison on behalf of the Wheeler River Joint Venture to audit the mineral resource estimate and prepare an independent Technical Report in accordance with the requirements of National Instrument 43-101. William E. Roscoe, Ph.D. P.Eng. of RPA, is the independent "Qualified Person" responsible for the mineral resource estimate. A Technical Report supporting the estimate will be filed on SEDAR (www.sedar.com) shortly.

Looking Ahead

An aggressive 14,000 metre summer drilling program at Wheeler River is underway. Two drills are primarily assigned to extending high grade basement hosted mineralization discovered in March, 2014 at the Gryphon zone, three kilometres northwest of Phoenix. In addition, a 3D DC-resistivity survey is planned for the northern strike extension of the Phoenix trend to aid drill hole targeting in this prospective area.

Qualified Person

The disclosure of a scientific or technical nature contained in this news release was prepared by Steve Blower P.Geo., Denison's Vice President, Exploration, who is a Qualified Person in accordance with the requirements of NI 43-101 and has been approved by William E. Roscoe, Ph.D. P. Eng. of RPA. For a description of the quality assurance program and quality control measures applied by Denison, please see Denison's Annual Information Form dated March 14, 2014 filed under the Company's profile on SEDAR at www.sedar.com.

About Denison

Denison is a uranium exploration and development company with interests in exploration and development projects in Canada, Zambia, Mali, Namibia, and Mongolia. Including the high grade Phoenix deposits, located on its 60% owned Wheeler project, Denison's exploration project portfolio includes 42 projects and totals approximately 483,000 hectares in the Eastern Athabasca Basin region of Saskatchewan. Denison's interests in Saskatchewan also include a 22.5% ownership interest in the McClean Lake joint venture, which includes several uranium deposits and the McClean Lake uranium mill, one of the world's largest uranium processing facilities, plus a 25.17% interest in the Midwest deposit and a 60% interest in the J-Zone deposit on the Waterbury property. Both the Midwest and J Zone deposits are located within 20 kilometres of the McClean Lake mill. Internationally, Denison owns 100% of the conventional heap leach Mutanga project in Zambia, 100% of the uranium/copper/silver Falea project in Mali, a 90% interest in the Dome project in Namibia, and an 85% interest in the in-situ recovery projects held by the Gurvan Saihan joint venture in Mongolia.

Denison is engaged in mine decommissioning and environmental services through its DES division and is the manager of Uranium Participation Corporation, a publicly traded company which invests in uranium oxide and uranium hexafluoride.
 

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China’s positives and its negatives need our undivided attention
DON STAMMER THE AUSTRALIAN JUNE 17, 2014 12:00AM
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THESE days, China is by far the major destination for Australian exports of goods, a main source of our annual intake of immigrants, the country providing the largest number of overseas tourists and the origin of increasing flows of capital.

Clearly, Australian investors need to keep an informed watch on the Chinese economy.

Too often, though, reports on the Chinese economy take one or other of the two extreme positions: China is on steady course to soon overtake the US as the world’s economic powerhouse or China’s economy is facing cyclical and structural collapse.

In taking a view on prospects for a country’s economy and investment markets, both the positives and negatives need to be thought through.

China’s strengths include high rates of saving and investment, competitive manufacturing, rapid growth of the middle classes, the spread of education and the continuing moves away from what was, until recently, a command economy.

On the negative side are the high level of debt (the stock of debt has risen from 130 per cent to 210 per cent of GDP in the past five years, much of it loans to property developers or often corruption-prone local government); the strained balance sheets of many finance companies and investment trusts; pollution; widening income inequalities; and the problems that come with a one-party state.

China’s trend growth has slowed — and will moderate further as the base level of GDP moves higher. Over the past 30 years, the GDP has expanded at an average rate of 10 per cent a year. These days, trend growth is about 7 per cent; by late this decade it could be down to 5 per cent.

However, to put these numbers in context, real growth of 5 per cent at the end of this decade would represent, in terms of the absolute increase in China’s output of goods and services, 2.5 times the absolute increase that growth of 10 per cent delivered in 2000.

Even as trend growth slows, China will remain a major market for many of our exports of minerals and energy, including iron ore, gas, steaming coal, uranium and coking coal. In general, the trend prices of minerals and energy will be well above those we saw in earlier decades.

China’s strong economic growth, and the larger middle class, is also bringing about big changes in food consumption.

The World Bank pointed out recently that, on average, Chinese people are eating 40 per cent more calories than in 1980 and there’s a strong shift away from basic staples towards meat and dairy products.

We must also allow for the cycle in the Chinese economy. And, as we’ve seen during and since the global financial crisis, China’s economic cycle is at times out of sync with the global cycle; that’s why our economy and commodity prices could surge while the US and Europe were experiencing the “great recession”.

Currently, many investors and commentators are seriously concerned China’s economy will slow — and have a hard landing as the overheated property market cools and many finance companies and investment trusts are left with the consequences.

China’s monetary authorities are trying to walk a middle line, allowing some financiers to fail and announcing (sequentially) a mini-stimulus package to help manage the inevitable deflation in property prices.

My guess is the monetary authorities will be prepared to do “whatever it takes” to avoid a bursting of the property bubble.

Of course, the risks of a policy blunder can’t be ruled out just yet. But I’d expect concerns about a hard landing for China to dissipate over coming months — as they did in 2012 and last year.

Since the global financial crisis, China has had a strongly performing economy but a weak sharemarket.

This disconnect between the economy and sharemarket reflects the marked preference within the Chinese middle class for property over shares.
 

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COFFEE WITH CARROT HEAD!



THE CIRCLES OF CHANGE AND THE PSYCHOLOGY OF TRADING.



Good Morning! Its sunny outside and I am laid out in bed. How ironic. While it was winter I was walking around and when the time comes to go out I am laid out. Still it gives me time to have a look at various aspects of the psychology of trading. Its also akin to my current status of trading.

How many times have we been in this scenario; “We think the price is a bargain, the bottom has been reached, the RSI is at the bottom, and if we do not get in now we will miss the boat. So we get in, only to see the trend slightly move up before it settles for another massive move down far beyond what we expected to be the bottom.’

One article states; Stock markets only shift momentum from one direction to the other when the "group" decides, NOT when the individual trader believes the reversal should occur. Famous economist and speculator John Maynard Keynes once said, "The market can remain irrational longer than you can remain solvent." Oh, how true this is, in the streets are littered with traders and investors who thought otherwise.

There is iron in those words as it is the sentiment of the mass that dictates the short term or the long term rising of the price based upon the majority mass analysis of the information being transferred into the investment or de-investment of a particular instrument whether it be in stocks, commodities or anything else.

The mass do not necessarily have to be fundamentally right but they are, as the price gains momentum moving up or down. We have no hope of being “right” if we are moving against the mass.

It is folly to consider taking a position against the mass until and unless you are a giant among traders and have the capacity to withstand the momentum against you and you are consistently right in your decisions enough to give you confidence to move against the mass.

After all this, one requires to consider the time frame to trade in. There are 1 min, 5 min, 15min, 1hr, etc. Traders trade in all of these. The mass too trade in all these and each one is a different group. The five minute trader really does not care if the overall price is moving up or down as long as he get volatility. The longer term trader does as his profit is dependent on the continuous movement in one direction for a longer period in order for him to profit.

Imagine if you will that there are concentric parallel circles one within another in the beginning. The momentum shifts within the inner circle being the first of the shortest time frame possible. The circles are obviously infinite in number but for our example we will assume that 1 minute is the smallest one and the monthly is the largest one. Momentum changes when the weight in the inner circle shifts allowing one side either up or down to touch. As each consecutive circle touches we see that a trend has shifted either to the upside or downside. This lopsidedness has nothing to do with being right or wrong. Rather we are either on the side of the trend or we are not.

The momentum increases with each concentric circle being pushed by the inner circles leading to either a short term or long term trend. We can also see that inner circles will change momentum from time to time and attempt to move the circle either back to a parallel mode or to loop side in the opposite direction. Once more the momentum is only changed when the inner circles create enough of a violent move to affect all the outer circles eventually. Here too there is a change in speed after the first few circles it appears as if there is additional weight in certain circles which show for resistance. The reason for all this and the nature of these circles is based upon the quality of traders trading each circle. Traders are creatures of habit, a scalp trader does not become a 15 minute or 1 hr trader and vice versa similarly 4 hr traders do not become long term traders. Each group creates its own momentum. Then there are the institutional traders who have a completely different agenda and their investments are what creates the weight and resistance to movement on the outer circles. All traders are influenced by external forces and are susceptible to emotions both; their own as well as those generated externally. Sometimes announcements create momentum and when it is strong it either carries you or wipes you just like in a Tsunami. Such waves cannot be resisted or fought. The force of anything always faces resistance or friction which attempts to slow it down. It really depends on the size of the mass as to how far these momentums will move. The greatest resistance to change is by the institutional traders/investors. The greatest movements for the longest periods occur when institutional traders announce that their momentum has changed.

Let us take an example of such a momentous change occurring; Gold is a classic example with 2001 where the price was at its lowest in the last three decades. The momentum was not an immediate horse size kick. The circles remained lopsided to the down side up to 1998. It took four years for gold prices to gain momentum to break past 300.

Think back to the time if you were an investor or trader. Did you have the stamina or financial capacity to remain in gold based on the fundamentals that you might have considered as too low a price? In hindsight it is very easy but just think about those four years while you twiddled your thumbs waiting for the price to begin moving up. There were no indications that the move would ever occur. Many thought it would move further down. The price gradually did move up. The truth was no one knew that it was moving up. Even at $400.00 many would have thought it would move back down.

Now think about what went through your mind when you saw the momentum and factor in the losses you had been holding for years or little profit. When you saw the price move to 400 would you not have considered taking profits? Did you firmly believe or have faith in many individuals who were clamoring for silver to rise to 100 dollars or gold to go past 3000 dollars? Could you rationally and sensibly gamble your hard earned money into an idea written on a page on the internet from some trader or thread writer (such as me) and not take profits when the price rose to above $400.00 per ounce of gold?

At that time it would have equated to a 25% return per annum. A remarkable return. There was every chance that gold could have dropped back and one would be in the doldrums again. Stocks did not behave in a similar fashion as many other factors affect them including situations such as the 2008 crisis. Gold stocks began to really move past 2005-2006. There was a great deal of volatility in commodity stocks.

Since we do not have any control on the movement of the instrument imagine if you will 5, 10, 15, 100, 1000, 5000, 10000, 100,000, 1,000,000, ants attempting to control the direction and speed of a car. This is equal to us attempting to steer the price of any of the instruments. If the ants were pushing the vehicle, which ant would you like to be; the one pushing against the million or the one pushing with the million?

While it is entirely possible that there would be very little momentum but the chances of a momentum are greater than the one pushing against. Hence the phrase of not attempting to catch a falling knife.

Going back to gold the inner circles continued to vibrate all throughout 1998, 99, 2000, and finally in 2001 the vibration was long and hard enough to catch some of the outside concentric circles and enough momentum was created to loop them to the upper side thereby momentum was created. Once in many would have been lost due to fear and that fear is real as the money lost or gained is real. Emotions are real and they affect the trades we make.

There are a few traders or investors who are not affected, a large chunk of these are those that may have purchased solid gold but then the question will arise as to when to sell and take real profit rather than in paper. Without profit being realized how does one actually gain or improve their life style? The gold itself does not multiply or gain interest in gold. The amount of gold remains the same. It only gains when converted to paper.

There are similarities in gold’s play since 2001 and uranium’s play in 2014. Gold found bottom in 2001 while uranium may find bottom this year or the next. Many missed gold’s exorbitant move over the decade being whipsawed out by volatility. I would not be surprised with similar movements in uranium.

Uranium appears to have clear fundamentals that seem to indicate a possibility of a move upwards. This has yet to show within the concentric circles, in fact even the inner circles appear to have little or no volatility at present. I therefore conclude that Uranium has still not shown indications of moving up. If there is sudden volatility do not simply jump in, wait for the momentum to build up and show a strong correlation before attempting to invest in to the sector. Despite the current sudden move of gold to the upside the longer term trend appears downside so once more inner circles appear to be vibrating and attempting to push in the opposite direction to reverse the trend but it is too early to state clearly that this is now occurring.

If we look at the daily chart for Cameco; considered to be the leader in uranium stocks, we note that the SMA- Simple moving average line of 10 days is moving in and out of the 20 sma. The two have crossed under the 50 SMA. These are standard periods that are normal to use. We can clearly see that the stock is in down trend. There is no reason to be bullish on the stock until and unless we get a good indication that the price momentum has changed. The price tells us all we need to know. If we however do see a major push up in price than perhaps we will be alerted to a possibility that the fundamentals have indeed changed.

There are several sectors of investors who would be interested. The private investors, retail investors, and finally the institutional investors are the major groups that are involved in the markets. Private investors can be short term as well as long term. They can be fundamental investors or volatility traders. Retail sector may be made up of smaller funds and larger players, institutional investors are made up of the banking sector, wealth management funds, pension funds, or even government based institutions. This last group is also the largest but it is the last one to enter the sector and the sector that usually invests the largest amounts into the sectors. Therefore we often get three to five major waves of moves up or down where entries and exits are made by the various sectors involved. The down side to uranium is so extensive that even the private and retail sector is all but out. At present there is very little movement in even the most promising stocks in the uranium sector.

The mass does not move due to genius ideas. Mass movement has nothing to do with rational or intelligence …well not at the later stage. The mass sees momentum and price action and moves with the majority like filings attracted to a magnet. As the magnet attracts more filings even more are drawn to the last one as those remaining idle feel the power of attraction. The tails continue to attract until the power is repealed or a more powerful magnet attracts filings from another direction. The power of emotions such as fear, and elation have a lot to do with the movements. These lead to non-confidence or over confidence in ones own ability.

At present it is important to do research and select the right stocks that potentially can be multiple baggers. It’s important to also consider what method one is going to apply to enter and more importantly what method to apply to exit. Even consider where you will be able to come out with an acceptable loss.

Write all these points down below each stock. Write down your thoughts so that you do not forget your analysis on why the stock was selected. Add information further on. Take the example of Dennison. In 2006/2007 the stock was flying at 18 dollars when it merged with another company IUC- International Uranium Corp. Since then Denisson has taken over a number of different companies including a number of assets of Fission Energy. They also purchased companies such as JNR resources which in 2006 was trading above 1 dollar, and recently bought out IEC. Despite all of these huge land holdings and trading partners such as Cameco and Areva and having a share in their uranium mill Dennison’s price remains down as the price of Uranium dropped. Today Dennison is one of the largest uranium exploration companies out there with a very diversified portfolio of land from Namibia to Mongolia and an informal conglomerate of various management and resources that defy its current price. The price reflects how much confidence the market has in a company. Despite 2006 Dennison trades at 1.35 per share currently. It has potential and prices can reach previous highs if Uranium begins to fly.

So how high will Uranium move up? It depends on the policies of countries towards uranium and how much importance they will give it in the future of power generation.

Every country requires base power, it is the key to its production of food, resources, manufacturing, transporting, and population use, all require that there is enough base power on demand. Rationally Nuclear power fits the bill but politics and costs always affect the move up.

Like in our example of stocks it is the mass that will decide if they wish to continue with nuclear or not as governments are acutely aware of the need for their own survival and will gauge and make policy decisions based on what they think the mass will approve. They will gauge the risk factors before they decide and that can be a long time. If there is a unanimous decision to approve nuclear power we could see an astronomical rise for the demand for Uranium and prices can reach several hundred dollars per pound as there are very few deposits that can be profitable under 100 dollars. Demand for uranium is mechanical and once required the same amount is required steadily for the life of the station and uranium, like oil used is non reversible, once depleted uranium cannot be returned back to its original status in a short period of time. It is a key energy resource just as oil is. The other factor that can affect the price of Uranium is the price of oil and gas. If these prices rise high enough and again these are finite resources, the leverage uranium provides to energy creation is definitely more than what any of the other resources can provide. Last time uranium rose with the price of oil. Considering present day situation and in hindsight I do not think this will occur until oil breaks past the 150 dollar mark.

There are many other companies out there that are worth investigating and considering for your portfolio. Some pure plays some diversified; Mawson resources is based in Finland and is defining a good gold and uranium play bought out from Areva. Areva still has some percentage in the field. Another is Greenland minerals with their multiple rare earth Uranium deposit in Greenland. All eyes are turned to Japan and waiting for them to boost confidence in the market by restarting their nuclear power plants. Do not for a moment think that despite opening Nuke stations, prices will shoot up, they may begin to move up but it will require many more power stations starting up before demand outstrips supply. The other side of the coin is that many exploration companies are either running out of finance or putting their projects on hold http://www.cbc.ca/news/canada/saska...ask-millennium-uranium-mine-on-hold-1.2646313 , this will reduce the chance of increasing capacity in the short term of supply, despite that the biggest supply increase will come from Cameco’s Cigar lake as it goes into full production.

There are other materials which are required in stations and pipe lines such as molybdenum which are necessary to increase strength of steel and resist rust. The largest deposit that may come online in the coming five years is GMO’s hope mountain deposit. There is another but it has a lot of issues and despite the size of its deposit it is at a measly price of 7 cents per share. GMO has resisted dropping much below 1 dollar and is working to get its mine online. Recent higher moly prices has garnered some interest in GMO. There are still some issues there and GMO’s profits are directly connected to the moly prices so it’s a good trading stock to think about.

Gold pure plays have taken a big beating as have silver plays; think of the big five stocks and consider some of them as many are near or below 10 dollars with the exception of Silver Wheaton. Another similar company as SLW is SAND. They have a few good streams of gold and platinum but they have taken a beating with a play they made several years ago with Colossus in Brazil. Colossus had found a fantastic deposit of platinum, palladium and Gold with some phenomenal results, a lack of financing, and water flooding into the potential mine left them no option but to almost call it a day without further financing. They are still hanging in there but the mine will not be coming up anytime soon or colossus will have to sell its assets in the near future. Either way it also affected the price of SAND(NYSE)

The fact that there are so few viable deposits out there and fewer still that have the potential to profit simply makes our choices simpler. In 2006/2007 there were more than 100 exploration companies in Uranium now there are less than 25 that have any viable deposits. Still fewer have a large deposit and fewer still that are in stable countries, and a mere handful that have defined their deposits. Only four or five that has the potential to survive without further financing.

It appears as if the clocks have turned back 10 years to allow an opportunity to make some good money if the price begins to move up.

Trading Stocks VS Investing in stocks; The two methods are completely different. One is based on technical analysis and the other is based on fundamentals and analysis of company finances.

The markets do not necessarily reflect one format or another. Sometimes stocks will move up on fundamentals or good financial reports or mergers. There are players out there who are very good at this and have developed very good resources to achieve good results through this method, but the majority of us do not have the finance or the man power to achieve a regular income through this method. The conflict between the two methods has been going on for a very long time probably since technical analysis and price action observation were invented.

There is a big question mark on fundamentals being the only method applied at least for the short to medium term as no one can predict the future accurately as we saw in the uranium sector. Catastrophes of trend changing events can happen on the flip of a coin. This can lead to huge draw downs which affect our financial standing in the markets and can with the same flip make winners into loosers. This is one of the main reasons why I no longer advocate fundamentals as the only reason to invest in any sector.

It makes sound sense to consider fundamentals but it makes even more sense to back this up with price action and technical analysis. The one thing I do not advocate is investing on gut instinct. Let your guts remain on the side and cold hard analysis replace this. Let money sit on the side line until and unless all indications are there for a strong move. Instead of looking at a stock because either the underlying supply or deposit in our case, is a strong reason, let the market and mass decide if it is a good investment and only then place your money in the stock. Cameco may look wonderful right now but does the markets analysis of price action back you up on this conclusion? If it does not, then simply keep an eye on but do not invest in it based on guts. One may find their guts hanging out in a very short time. This is exactly why we place stop losses. No matter how strong the move in your anticipated direction is, the most important thing to understand is that management of your looses is the most important step. They say; “Take care of your losses, and the winnings will take care of them selves” Loss management is key to trading and even investing.

The problems with fundamentals and technicals is that; on more occasions than not, the two will be in conflict and at such times one should not be in the markets. Let there be a good foundation through fundamentals but let there be a resounding approval from technicals to allow one a greater chance of making money in the markets. The fundamentals for uranium are providing a resounding GO, but the technicals are not.

Presently all stocks of uranium are moving down so we will wait for things to stabilize before making any decision to enter the markets. The one difference with other thread and this one is that readers here will also contribute to times when one must exit the markets as we did indicate in April of this year in one posting. This is vital as many continue to hold on the basis of “Buy and hold” This is nonsensical in today’s time and day. One must exit at times because fundamentals news breaks such as Fukushima make Uranium investing risky. Unless the bullish signs are far stronger, there is no reason why we cannot exit and re-enter the trades on a lower level, especially when the stocks are in profit. While all this looks easy, it is a state of mind that one needs to overcome and train and focus on the overall profit that one achieves.

Forget the loosers, move with the winners. Loosers do not need hope. God is not going to come and save this company. If a thousand investors have dropped it, rest assured its got something worth dropping and you should be getting out too.

There are many theories out there but the one that seems to appeal to most is that if the trend is up then we should be with the trend. The problem with this theory is timing. When do we accept or admit that the trend is up or down?

The trend is dependent on time and we trade in different times. One trader will trade the 5 min trend while another may trade the 4 hour trend. In the shorter trend of 5 minutes we may have multiple waves going up and down within the duration of 4 hours while the 4 hour wave will not have moved. It therefore makes sense to decide which time line you are going to trend. In most cases those that do trade shorter trends are looking for smaller profits but those that trade longer trends first have to admit that in the first instance they may take a loss, the moment they enter the trade or shortly after as some of the inner waves do affect the longer term trends within the day or even the week. Just as waves in the ocean sometimes combine to become a stronger wave so do the trends within the shorter time periods combine to become a larger trend. Therefore timing the entry is important. Technical traders look at past history of the graph to realize where trends of a stock have reversed either from a top or a bottom and consider this as the most likely point from where a reversal will occur. They then wait for an indication of the price action to show where exactly the pivot point occurs. Once this turning point is observed traders use various combinations of indicators to make an entry. Some simply by price action while others may use simple moving averages or ichimuku clouds or any number of others. Which ever indicator you use the trade is desired for a short from the top or a long from the bottom or near bottom. Other indicators such as the MACD and RSI also may aid in deciding when an entry could be made. However simply entering from a resistance or support area may not necessarily mean it is going to reverse, so it is vital to remain on the side line but ready to enter if the indicators you are using do confirm that a trend has changed. For stocks more often investors/traders will use the 10,20,50 SMA, using the 20 crossing over/under 50 to enter a trade from support or resistance and then using the 10 to cross either the 20 or 50 to exit. The psychology and nature of trader here is important and to separate emotions from the trade. The moves become simply mechanical win or loss.

Lets take an example of particular stocks that may break out in the next few months. First a technical one BBRY had unusually good financial results providing unusually good trading if BBRY breaks past 11.50 its heading to serious highs.

CONCLUSION
Uranium has the potential to produce big winners and it is not necessary to look at all the miniscule explorers that will come up in 2-5 years once the trend has begun. There are no positive vibrations occurring on the inner circles as yet and they may not for a long time but when they do they will provide us with ample warning of the possibility of a long term trend allowing us to be both investors and traders. Our efforts at present must be to thoroughly investigate each of the potential targets to ensure that they fit our criteria of good solid stocks.

They require to have a large, but cheap to mine deposit, be well established, have the financing, ensure it is in a good politically stable country, have the plans to establish other deposits in the future, excellent and well established management.

Make a short list of your chosen few and wait for a turnaround to occur. Do not be greedy and get in at the first moment of change wait for it to establish much like a young shoot does not necessarily become a tree neither do all turnarounds necessarily become reversals in an ongoing trend. If a trend is established especially as in uranium for several years they are very resilient and it takes a strong fundamental event to change direction so please do not take the shot too early. This is one party where coming in late is an asset rather than a liability.

http://deronwagner.hubpages.com/hub/stock-trading-psychology


Have a good trading week. I apologize for the longer than normal article.

SAGI:cool1::beerglass:
 

jelly

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Sagi, I remember Colossus well. I am ashamed to admit I invested in it when it dropped to around $1/share and a few months later I watched it drop, drop, drop. It was the most promising company I owned, but it goes to show that even the most promising stocks can have unpredictable set-backs. I think the financial difficulties were common in this industry, and easy to predict. But I don't think anyone could have predicted the water problems, which was the final nail in the coffin.

I used this experience in investing in other miners. I learned to stay away from stocks with severe financial difficulties. A good example would be AXU. It has great potential, but its essentially bankrupt, unless they get a good financing deal. The share price reflects their money problems. They have performed poorly over the past 6 months, despite have fabulous numbers, and being locating in a the perfectly safe location. I suspect they will get a nice financial deal since Sprott is one of the largest stakeholders in the company. I doubt they will let AXU go under.

I learned another lesson from this experience - If a CEO resigns, its a good sign you should leave the stock. If I remember right, he resigned when the shares were still trading around $1/share. I might be wrong, I'm going off memory.
 
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SAGI

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Hi Jelly,
Yes you are right he did resign. This is exactly why I believe price action tells us a lot more than the news does. All the news is factored into the price. I hope this weeks Coffee helped you to understand and perhaps allow you to amend your trading methodologies if applicable.

SAGI
 

SAGI

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Jelly in retrospect,

I recall very clearly being bullish on Colossus and two years ago this stock felt very positive. Their deposit was very unusual in that they had high concentrations. I did not invest in it for the simple lack of allocated funds however that did not stop me wishing for them or recommending it. Remember this stock went to as high as 7 dollars. However its a classic example of why we should not have a BUY and HOLD anymore. BUY with the trend and SELL it when the TREND turns. Just remember one thing when you invest; THE PRICE TELLS YOU ALL THE NEWS YOU NEED TO KNOW. IF ITS GOING DOWN DO NOT BUY IT, INSTEAD SELL IT. IF ITS GOING UP DO NOT SELL IT, BUY IT. NEVER TRY TO SELL FROM RESISTANCE OR BUY FROM SUPPORT, BUT WAIT FOR THE ANTICIPATED TURN AROUND TO OCCUR AND GAIN MOMENTUM BEFORE PURCHASING OR SELLING. If anyone else has other suggestions please do not hesitate to post.

SAGI
 

SAGI

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UPDATE 1-Areva says a uranium price rebound could be fast
Mon Jun 23, 2014 3:46pm GMT Print | Single Page [-] Text [+]
* Fukushima accident triggered slump in uranium prices

* Areva official sees recovery, cites new nuclear plants

* But it may take time to clear inventories - NEA/IAEA group (Adds NEA/IAEA uranium group, price detail, paragraphs 9-13)

VIENNA, June 23 (Reuters) - French nuclear group Areva expects uranium prices - under pressure since Japan's Fukushima accident more than three years ago - to rise again, perhaps later this year or next, a company official said on Monday.

"If you have some kind of move upward it can go quite fast,"

said Isabelle Leboucher, Areva senior vice president, marketing.

The March 2011 meltdown at the Fukushima plant triggered a slump in uranium prices, which have struggled to recover since.

But Leboucher, speaking on the sidelines of a conference on uranium at the headquarters of the United Nations nuclear agency, cited the construction of nuclear power plants as an important factor in expectations for higher uranium prices.

Despite the question mark Fukushima put over the future of atomic energy, China and other countries in Asia and elsewhere are pressing ahead with building atomic energy plants, which are fuelled by refined uranium.

"We don't know exactly when, but it will come back (towards) higher prices," Leboucher said. "Of course, I cannot say if it is going to go up in the coming months or maybe next year."

Last month, Areva agreed to a reduction in tax breaks and a rise in royalty rates at its uranium mines in Niger but said the start of production at its giant new Imouraren mine there would be delayed until prices improve.

Partly as a result of Fukushima, the International Atomic Energy Agency in 2013 cut its long-term outlook for nuclear energy growth for a third year in a row. The industry could, however, still nearly double its capacity by 2030 due to expansion in Asia, it said.

All 48 of Japan's nuclear reactors have been idled for safety checks, but the pro-nuclear government of Prime Minister Shinzo Abe has vowed to restart plants that pass the tougher, post-Fukushima safety checks.

The restart of Japanese reactors will be key to a turnaround in the uranium market, according to a joint uranium group of the OECD's Nuclear Energy Agency (NEA) and the IAEA.

However, "it will take some time to clear inventories that have built up since they went off line," said Susan Hall of the U.S. Geological Survey, presenting the preliminary results of the group's 2014 survey due next month.

Noting that 72 nuclear reactors are under construction worldwide, she told the conference about the prospects for the uranium market: "It is expected that slumping demand will reverse and increase in the coming years."

Between the first quarter of 2011 and the last quarter of 2013, the uranium spot price has declined from 118.8 euro per kilogram to 66.18 euro, a fall of 44 percent, according to the website of the Euratom Supply Agency.

With uranium prices declining, Leboucher said utilities tended to wait, thinking that they would have better prices in the months ahead. However, "this means also that some will be short of supply, even if some utilities are stockpiling". (Reporting by Fredrik Dahl; Editing by David Holmes and William Hardy)
 

fat panther

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China Builds World's Most Powerful Nuclear Reactor; Regulators "Overwhelmed"


Submitted by Tyler Durden on 06/22/2014 11:27 -0400


We are sure this will end well. Just as China took the 'if we build it (on free credit), they will come' growth model to extremes in real estate; it appears their ambitions in nuclear energy production are just as grandiose. However, just as they lost control of the real estate market, Bloomberg reports China is moving quickly to become the first country to operate the world’s most powerful atomic reactor even as France’s nuclear regulator says communication and cooperation on safety measures with its Chinese counterparts are lacking. France has a lot riding on a smooth roll out of China’s European Pressurized Reactors (EPRs) as it is home to Areva, which developed the next-gen reactor, and utility EdF, which oversees the project. French regulators, speaking in parliament, warned, "the Chinese safety authorities lack means. They are overwhelmed."







Not what you want to hear as the nation embarks on the biggest nuclear energy facility creation ever, "if too many nuclear power projects are started too quickly, it could jeopardize the healthy, long-term development of nuclear power..." and the Chinese (just ask the Japanese).


As Bloomberg reports, China is moving quickly to become the first country to operate the world’s most powerful atomic reactor even as France’s nuclear regulator says communication and cooperation on safety measures with its Chinese counterparts are lacking.


Chinese builders are entering the final construction stages for two state-of-the-art European Pressurized Reactors. Each will produce about twice as much electricity as the average reactor worldwide.

The French are in charge... kinda...


France has a lot riding on a smooth roll out of China’s EPRs. The country is home to Areva SA (AREVA), which developed the next-generation reactor, and utility Electricite de France SA, which oversees the project. The two companies, controlled by the French state, need a safe, trouble-free debut in China to ensure a future for their biggest new product in a generation. And French authorities have not hidden their concerns.

And are not happy...


“Unfortunately, collaboration isn’t at a level we would wish it to be” with China, Jamet said. “One of the explanations for the difficulties in our relations is that the Chinese safety authorities lack means. They are overwhelmed.”

...

“the state of conservation” of large components like pumps and steam generators at Taishan “was not at an adequate level” and was “far” from the standards of the two other EPR plants,

China is rushing...


Some 28 reactors of various models are currently under construction in China. That’s more building than any other nation on the planet, and the country hasn’t reported a serious nuclear accident in the 22 years it has operated nuclear plants for commercial use.

“If the current momentum of development continues, if too many nuclear power projects are started too quickly, it could jeopardize the healthy, long-term development of nuclear power,” Fan Bi, a deputy director at the State Council Research Office, wrote in an article for Outlook Magazine, published by the official Xinhua news agency, two months before the Fukushima disaster.

China General, the country’s biggest atomic operator is forging ahead with EDF. It will begin critical tests on the most advanced of the 1,650-megawatt Taishan EPRs before start-up in 2015

But the Chinese nuclear regulator is a "total black box"


The Chinese regulator’s website contains relatively little information about safety issues. The most recent post on Taishan is a 2009 report on the start of cement work at the reactor referring to “problems left over from early-stage construction.” It said all current work was up to standards, without elaborating. In total just nine posts on the website mention Taishan, and many are blank apart from the title.

Critics of China’s nuclear safety regime, including Albert Lai, chairman of The Professional Commons, a Hong Kong think tank, says that lack of information risks eroding confidence in safety controls in what’s set to be a 14-fold increase of atomic capacity by 2030.

“The workings of China’s atomic safety authority are a ‘‘total black box,’’ said Lai. ‘‘China has no transparency whatsoever."

And even the Chinese are nervous...


And in a rare public comment about safety concerns, China’s own State Council Research Office three years ago warned that the development of the country’s power plants may be accelerating too quickly.

We are sure this will all end well...



http://www.zerohedge.com/news/2014-0...rs-overwhelmed
 

jelly

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Jelly in retrospect,

I recall very clearly being bullish on Colossus and two years ago this stock felt very positive. Their deposit was very unusual in that they had high concentrations. I did not invest in it for the simple lack of allocated funds however that did not stop me wishing for them or recommending it. Remember this stock went to as high as 7 dollars. However its a classic example of why we should not have a BUY and HOLD anymore. BUY with the trend and SELL it when the TREND turns. Just remember one thing when you invest; THE PRICE TELLS YOU ALL THE NEWS YOU NEED TO KNOW. IF ITS GOING DOWN DO NOT BUY IT, INSTEAD SELL IT. IF ITS GOING UP DO NOT SELL IT, BUY IT. NEVER TRY TO SELL FROM RESISTANCE OR BUY FROM SUPPORT, BUT WAIT FOR THE ANTICIPATED TURN AROUND TO OCCUR AND GAIN MOMENTUM BEFORE PURCHASING OR SELLING. If anyone else has other suggestions please do not hesitate to post.

SAGI
I'm learning to stay away from Brazil. I was burnt on Jaguar mining as well. Not sure if its just coincidence, but it seems like it hard to operate a large mine in that rainforest.