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Thursday
Jul272006

Mega Uraniun: A place in the sun



For exciting prospects in the Uranium arena look no further than Mega Uranium Limited. This mining company has uranium resources in Australia in the order of 23.6 million lbs. So we can establish that this is no shell company looking for a part to play. Beware; this market sector is producing investment opportunities faster than it is mining uranium.

With a solid asset in the bag we can now take a look at Megas' exploration activities and try and ascertain a brief glimpse into the future.
Apart from Australia, Mega is active in Argentina, Mongolia, Bolivia and Canada. As an added kicker Mega also has a position in Maple Minerals, which has interests in base and precious minerals exploration properties in Canada. Maple Minerals also has a copper-nickel exploration project in Guinea, West Africa. Our interest is in the Uranium element of the company however the other mineral elements of this company’s composition are also very interesting.

We then ask the question, has the management got the aggressive ambition to pursue other opportunities in terms of acquisitions. Well, they did purchase Uranium Mineral Ventures, the Georgetown Project in Queensland, Australia, Future Metals and Energy Limited, Hindmarsh Resources, along with partial rights in other exciting prospects. Good they are showing us what they made of through their actions, which beats the socks off a good story with no substance.

Charts are always worth some examination as they tell a story just like any other picture. The chart below shows that Mega Uranium has had a considerable rise in recent times. This begs the question; is it too late to jump on board? Well for one reason or another we have failed to acquire this stock in the past. We watched it hit $10.0 and thought that we had missed it completely. However, a correction has come our way with the stock dropping to just under $6.0. But it didn’t breach its 200-day moving average and has shown a strong recovery since rising to approximately $8.0 as we write.




We do find it strange that this uranium miner dropped so much as its underlying asset; uranium has not corrected and continues on its merry path upwards. Not to worry, this is our opportunity to buy and we are happy to buy at these levels.

I lived and worked in Queensland many moons ago, I also played football there for a team called Southport Warriors, and so I know a little about the Aussie psyche. My bet is that they won’t let politics get in the way of a good money spinning deal and when the go-ahead arrives for uranium mining to commence, there will be some frantic action for those mining companies who already have a place in the sun.



27 July 2006
Tuesday
Jul252006

Fronteer: A quick update

Some great news from the explorer Fronteer Development Group Inc., it has just announced that Aurora Energy Resources Inc., 49% owned by Fronteer, has reported new wider and higher-grade drill intersections at the Michelin uranium deposit. Results are said to be the best grade-thickness intervals ever intersected at Michelin.


The Michelin deposit is unusual in that it starts at the surface and goes down to a depth of at least 700 vertical metres, which should facilitate easier extraction than normal. Michelin is one of the largest undeveloped uranium deposits in Canada, exciting times indeed.

This discovery is relatively accessible as it is close to the coastal infrastructure, where a talented work force has a good record for getting these kind of large deposits into production. This news was reported on Market Wire at 9.45 am. The stock price is currently at $4.40, having traded around $4.25 last Friday.

Fronteer trades on AMEX as FRG and in Toronto as FRG.
Aurora trades on Toronto as AXU.
Saturday
Jul152006

Fronteer Development Group

FronteerLogo

Excuse the pun but we believe that the Uranium sector is one the hottest to be in right now. And one of our favourites is Fronteer Development Group, Inc.

Their management team exude the excitement of an olden days pioneer as they race to find tomorrows history making deposits. This is an exploration company, which is also quite aggressive in the area of acquisitions. By taking positions in other exploration companies it is spreading its chances of a major success. For example, Aurora Energy Resources Inc., that Fronteer has a 49.3% stake in, has reported new wider and higher-grade drill intersections that expand in to the heart of the Michelin uranium deposit. Recent results show the best grade-thickness intervals ever intersected at Michelin, all within 420 metres of surface. Very promising indeed.

Their team of Ph.D. qualified geologists employ a system developed in-house which allows them to identify the most promising target sites and to then assess and quantify the magnitude of the resource, thus raising the level of confidence in the potential value of the find.

FronteerLogo2

Geo-politically, Fronteer are actively involved in exploration projects in Canada, Western Turkey, and Mexico, also ideally placed to identify and target new opportunities in these areas. This is the sort of exposure that we are looking for, diverse but politically a good environment in which to conduct mining.

Fronteer’s current price is around $4.70 and its Market Capitalisation is $226.0 million.

From the graph below we can see that this stock has bounced from its 220 day moving average and has made a strong recovery.

FRGchart1

The stock price may retract a little from here, however we are buyers at this level and will hold in anticipation of much higher stock prices.

Fronteer trades on the TSX under the symbol of FRG and on the AMEX under the symbol of FRG and is currently trading around $4.70.
14 July 2006
Saturday
Jul152006

Cameco Corp

CamecoLogo

When it comes to uranium producers this one cannot be ignored as it is easily the most dominant player in the uranium arena.

By comparison to other market sectors the uranium market is comparatively small making it difficult for fund managers to find suitable investment vehicles to place their money. Fund managers are looking for a piece of the action and not for majority ownership which rules out most of the companies in this sector. So Cameco provides them with a certain amount of liquidity enabling them to freely move some of their funds in and out of the market as they see fit. This action will force the price of this stock to be a little more volatile but will inevitably drive the stock price up.

Cameco Corp is the world’s largest, uranium miner accounting for about a quarter of the world’s uranium production. Cameco controls more than half of all identified new uranium production that may come to the market over the next 10 years.
It has four mines operating in Canada and the US. It should be noted in Saskatchewan, Canada, the ore grades are approximately 100 times higher in quality than the world average. There are two new mines being developed in Canada and Kazakhstan, Central Asia.
This energy company has a total of proven and probable reserves amounting to approximately 550 million pounds of uranium.
For gold bugs there is the added kicker of a controlling interest, just over 50% in Centerra Gold Inc.
We are buyers at these levels even though there could be greater value in smaller uranium miners this one is set to do very well indeed.
Cameco has a market Capitalisation of $13.5 billon, a P/E ratio of 53 and is currently trading at around $40.00. It is traded on the NYSE under the symbol of CCJ and on the TSX under CCO.

For more information about Uranium see the Uranium Information Centre and the Canadian Nuclear association.

CamecoChart1
Saturday
Jul152006

Uranium: A question of Time

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This week the British government announced its interest in the need for more nuclear power plants, so where will they get their Uranium?

I recently had the honour of attending the BBC’s television show called Question Time, held in Canterbury, England. The panel was made up of politicians including Ken Clark, Simon Hughes, Harriett Harman, another lady who is a member of the House of Lords whose name escapes me and the author Frederick Forsyth. Of the many topics that the programme tried to cover, the nuclear energy topic was the least understood, in my opinion. Simon Hughes a Liberal Democrat wanted to have a long, free and frank discussion about nuclear energy and Ken Clark a Conservative wanted to avoid another oil crises similar to that of the seventies. Time apparently is not a problem. No one mentioned that:

1. We are using uranium at twice the speed we are producing it. The short fall is currently being filled by the dismantling of old nuclear warheads that will dry up shortly.

2. The demand for energy from China, India and Asia is rocketing along with their fast paced modernisation programmes for 3 billion people

3. Oil is in short supply

4. Coal is dirty, although there are various coal to oil gasification possibilities.

5. Wind farms: how many, where and when?

6. The price of Uranium has risen from $6 a pound to $45 a pound as we write. Why? Could it be that old economic factor DEMAND!

In Queensland Australia where I once lived and worked it is against the law to mine the old yellow cake at the moment. This has not stopped the Chinese doing massive deals to lock in the potential supply if and when the law should change and it will. Has anyone noticed that China has stopped the exportation of a number of metals for example tungsten? If you were in charge of China would you state the true number of nuclear plants that you are going to build and risk causing a stampede to buy uranium? No, you would first secure your supply of uranium far out in to the future and then you would quietly tell the world. This isn’t difficult is it? They should be applauded for their vision in these matters.

So, where does all this leave us? Well dear readers we are on the verge of some major consolidation in this market. Each nation, as it awakens to this new crises will flex its own financial and political muscle, as we have never seen before. We believe that we are looking at a uranium price of $100.0 plus in the very near future. This will drive prices of uranium stocks through the roof and into uncharted territory. If you thought that dot COM was a boom get into position and hang on for fortunes will be made, possibly exceeding those of gold and silver.

On this site we will share with you our thoughts, analysis, anxieties, our purchases and sales. We will also plot our progress so that you are fully aware of which uranium stocks we investing in and why. Do your own due diligence before you put your hard earned cash on the table. And finally, please feel free to put your comments on our website as this will add balance to the coming uranium debate.
14 July 2006.
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