Jump to content



Photo

Uranium


  • Please log in to reply
26 replies to this topic

#21 hiker

hiker

    independent trader

  • TT Member*
  • 12,108 posts

Posted 10 January 2007 - 02:29 PM

1/10 intraday summary...the column next to symbol is % distance from 52-wk high (URRE stat is an error)....tax deferral selling? I am flat the sector since late 2006 Symbol Pct from Yr High Change - - - - - ASX.V Down 35.79% Down 0.06 Down 3.17% - - - - - AXU.TO Down 9.40% Up 0.03 Up 0.22% - - - - - AZM.V Down 22.45% Down 0.12 Down 2.75% - - - - - CXX.V Down 28.10% Down 0.10 Down 3.21% - - - - - DIT.V Down 30.12% Down 0.04 Down 6.45% - - - - - DML.TO Down 19.67% Down 0.19 Down 1.80% - - - - - EMC.TO Down 11.04% Down 0.10 Down 1.02% - - - - - EMU N/A% Down 0.08 Down 0.96% - - - - - ERA.AX Down 9.71% 0.00 0.00% - - - - - FRG Down 21.19% Down 0.24 Down 2.95% - - - - - FSY.TO Down 9.91% Down 0.47 Down 8.32% - - - - - JNN.V Down 27.54% Down 0.12 Down 5.15% - - - - - LAM.TO N/A% Down 0.24 Down 2.92% - - - - - MGA.TO N/A% Down 0.04 Down 0.63% - - - - - NCR.V Down 26.92% Down 0.04 Down 6.56% - - - - - PDN.TO Down 10.60% Down 0.15 Down 1.98% - - - - - SAN.V Down 20.35% 0.00 0.00% - - - - - STM.V Down 21.14% Down 0.13 Down 4.28% - - - - - SXR.TO Down 22.72% Down 0.03 Down 0.23% - - - - - TXM.V Down 15.84% Up 0.10 Up 2.41% - - - - - U.TO Down 7.69% 0.00 0.00% - - - - - UEX.TO Down 13.68% Down 0.05 Down 0.98% - - - - - your.TO Down 20.00% Down 0.12 Down 3.09% - - - - - URRE.OB Up 162.12% Down 0.31 Down 5.64% - - - - - URZ Down 25.83% Down 0.05 Down 1.38% - - - - - USU Down 22.10% Down 0.04 Down 0.32% - - - - - UUU.V Down 12.23% Down 0.05 Down 1.01% - - - - - WRI.V Down 25.71% Down 0.05 Down 8.77%

Edited by hiker, 10 January 2007 - 02:30 PM.

why is it important to wear sunglasses, even on cloudy days?

UV damage to the eyes is cumulative during the lifetime

blindness from UV damage to the eyes is preventable for the current younger generations -

elvis wore shades - by the Cleveland Clinic

#22 PorkLoin

PorkLoin

    Member

  • TT Member*
  • 2,194 posts

Posted 11 January 2007 - 10:02 AM

I've been stopped out of several of the "more" speculative (IMO) stocks in the uranium sector. Fantastic move up in the last 3 months but the party's apparently over, at least short-term.

Main basket:

AXU.TO holding up well.

AZM.V a real correction 5.50 to 4.11 but looks like an ABC decline here. I think there will be a good buying point coming here, as with most uranium stocks. I don't think the long term bull is over by any means, and we may be going into a period like last summer to October, the market resting, breathing a little, consolidating. That was another great time to load up.

DML.TO weekly chart sure looks like more decline is needed.

EMC.TO holding up pretty well too while the overbought conditions are worked off.

FRG another "nice" looking corrective move down/sideways. I think the long-term picture remains very bullish.

JNN.V ouch a sharp move down - today's low 2.11 - but it went from 1 to 3 in three months and you're gonna have that.

LAM.TO hasn't been as volatile (though it did double from the summer spike low) and the last six days are just one more "correction," right? Absolute monster move up in the last five years but this one has been a little disappointing to me lately.

MGA.TO like LAM but a little stronger. One of the best for long-term holding I think.

PDN.TO my best performer last year. The 8.30 high last week was an increase of 371% from where it began 2006. In a little correction here too.

SAN.V took profits at .97 - .98 then it promptly went to 1.13. Oh well - bought it in October and what a nice move it was.

Posted Image

I figured it was going to close the gap and maybe even go down in the .70s. Just watching for now but with an eye toward buying back on technical signals.

STM.V another correction running its course.

SXR.TO this one might have ended a correction. Love the chart.

U.TO triangle maybe blah blah blah. Not as sexy as the others but less risk too.

UEX.TO correcting here too but nothing makes me thing the bull is done.

your.TO same song, second verse.

UUU.V like SXR, looking strong.


Patient :redbull: Doug

#23 PorkLoin

PorkLoin

    Member

  • TT Member*
  • 2,194 posts

Posted 11 January 2007 - 10:18 AM

Posted Image

A latecomer - didn't buy it until Dec. 19, was treated to a fast 58% increase. MACD turned down, no surprise, it was in the stratosphere. Maybe we close the gap toward 4.50? Look at all the green on the Chaikin Money Flow -- is this long run over? I don't think so.

Wish I'd heard of Forsys earlier. Here's the article that prompted my buying:

Near-Term Uranium Producer a Carbon Copy of $3B Paladin?

By David J. DesLauriers
18 Dec 2006 at 05:25 PM EST


TORONTO (ResourceInvestor.com) -- Forsys Metals [TSX:FSY], which plans to produce approximately 2.5 million pounds of uranium in 2009 from its Valencia property in Namibia, closed today at C$3.64 per share, giving it a market capitalization of about C$170 million. Uranium investors will know that this compares extremely favourably with names like Urasia Energy [TSXv:UUU], International Uranium Corp. [TSX:IUC], SXR Uranium One [TSX:SXR] or Energy Metals [TSX:EMC; NYSE:EMU], which all enjoy valuations that are quite literally 5X-10X that of Forsys.

More than that though, we believe that Forsys is almost an exact replica of the C$3.2 billion market capitalization mammoth Paladin Resources [TSX:PDN] - only about 24 months earlier. As we will illustrate, it looks as though Forsys deserves a significant upward re-rating, as it goes down the track towards production.

Why the Lack of Recognition?

Forsys is not very well known because it has a fairly short-listed market history in its current incarnation and has not been marketed in the same manner as some of the other better known near-term uranium production situations. The company only closed on the acquisition of its principal uranium asset in Namibia a little under one year ago - just before Christmas 2005.

Until that point, Forsys was focusing on some quite attractive high-impact non-uranium assets in the same country, which will be spun out to shareholders in the New Year and to which no value is ascribed for the purposes of this piece. Indeed, just the uranium seems compelling enough.

Timeline and Recognition Catalyst

What we believe will catalyze both institutional and retail investment into this story are the results of a pre-feasibility study, due out in early to mid February - or just two months time. We think that those numbers, which we can already compute in a general way, should take the share price to a valuation that is closer to that of its peers, of C$6-C$8 per share, or a market capitalization in the C$275-C$375 million range.

Not only will the study lay out the economics of production, but it will factor in drilling over the last year which it would appear could reveal a boost in the 43-101 compliant uranium resource on the Valencia property from roughly 20 million pounds of currently, to 30 million pounds of yellowcake.

Here are the numbers.

Production and Cash Flow

Forsys has designed this pre-feasibility study around a production rate of 2.5 million pounds per annum which seems easily achievable given similar operations, and their Measured & Indicated uranium resource.

The company estimates that the CAPEX on the project should come in around $120 million, with costs per pound of production ranging somewhere between $20/lb and $25/lb - investors need to keep in mind that Forsys has a perfect permitting and operational template in Paladin who has just done the exact same thing in the same country with a project that has similar grades and attributes. This is all laid out in the Forsys presentation on pages 25-27.

At any rate, given the CAPEX and cost per pound of production, we envision two scenarios:

In the more optimistic case, Forsys which currently has 47 million shares outstanding and about 61 million fully diluted, (which would bring in C$25 million in cash) would dilute at $5 per share to the tune of say 10 million shares, no warrant because the uranium market is so hot. That gives us 71 million shares fully diluted. The rest would be debt finance.

In this scenario and using the low cost number of $20 per pound, plus today’s uranium price of $72 (nice spike last week), FSY would cash flow something like $1.80 per share.

In the more dilutive case, assuming all equity to cover the CAPEX at C$5 per share or a raise of 30 million shares. This would give 91 million shares fully diluted. Now at $25/lb cost, and at current uranium prices, we get cash flow of about $120 million, or roughly $1.30 per share.

The truth will lie somewhere in between - so lets split the difference and use $1.55 per share in cash flow and a probably quite conservative multiple of 15X (even though many producers are trading at 30X plus) - we get a 2009 price target of C$23 per share.

That represents more than a six-bagger from current levels, and is a big number, but all of the figures are fairly straightforward and we can’t see any political, personnel, production or financing issues that could derail Forsys from following the Paladin roadmap and delivering on its goals.

Sticking to the Plan

The X factor is timing and FSY Chairman Duane Parnham told Resource Investor that the company is looking at ways to fast track to production and believes that it can meet the 2009 time frame for start of operations.

Indeed, they have already applied for the environmental permits and Namibia goes a lot faster in that regard than the state governments that some of the near-production hopefuls in the U.S. have to deal with.

This is an aggressive group that we believe can get the job done in the targeted time-frame, and it helps that there are two uranium mines operating in Namibia where title is well respected, and that Forsys has a template to go on in every area - construction, permits, contracts, etc. - thanks to Paladin’s Langer Heinrich operation.

Conclusion & Target

We believe that relative to peers, Forsys represents outstanding value. Not only given projected production levels and profitability in 2009, but also from the standpoint of the current market capitalization.

Whether it occurs between now and February, or it takes the pre-feasibility results for investors to take notice, we think that FSY deserves an immediate re-rating and should be trading between C$6-C$8 by Valentine’s Day if it is to be in any way in line with comparable situations.

Of course, the C$23 2009 price target contemplated here does not take into account the value that shareholders will reap when the other mineral assets in the company are spun out, future acquisitions, the fact that in reality uranium producers trade at more than 15X cash flow, or the trend in uranium prices.

As we stated in a recent popular article, “companies that have hedged out some of their uranium in long-term contracts, and companies operating in far less mining-friendly countries are achieving valuations of 30X to 60X cash flow per share thanks to the dearth of listed uranium producers.”

That being the case, it is fair to say that FSY, currently trading at only 2.3X projected 2009 cash flow at current uranium prices, could go much, much higher.

We think that Paladin with a market capitalization of almost 19X that of Forsys ought to be a guide as to where FSY shares are headed – and that assumes that the price of uranium stays flat.

If we go to $100 on yellowcake, hold on for the ride!






Best,

Doug



No guarantees, of course, but here's another article:


China Seeks Annual Imports of 2,500t of Australian Uranium

By David Harman
10 Jan 2007 at 08:44 AM EST


SHANGHAI (Interfax-China) -- China will likely seek annual imports of about 2,500 tonnes of Australian uranium by 2020, or about one thirds of its expected annual demand of 7,500, according to uranium experts.

Last week, Australia, with just under a quarter of world uranium production, and China ratified two uranium trade agreements signed in April 2006.

Michael Angwin, an expert with Australian Uranium Association indicated to Interfax that it would take some time before exports begin as China will first have to make commercial contracts and negotiate commercial contracts with Australian producers.

Global demand is expected to double in the next 25 years, Angwin said, lead by China's ambitious plan to increase nuclear energy capacity by almost 5-fold to 40 gigawatts by 2020, equaling Russia nuclear plans for 2030, and twice as large as India's plans.

Currently, there are 28 reactors under construction around the world and another 62 being planned. Japan intends to add 11 more by the year 2010 and China hopes to add 24 to 30 by 2020.

Uranium prices doubled last year and are up 6-fold in the last 5 years at $72 per pound. The decline in secondary supplies, produced from recycling and reprocessing spend fuel, has been the key driver of prices which are expected to continue increasing in the short term and stabilize, said Angwin.

About 440 reactors require about 154 million pounds of uranium from mines and stockpiles each year, and the stockpile of uranium that resulted from the disassembling of nuclear weapons by the Soviet Union is rapidly dwindling. The Cigar Lake also put a squeeze on futures supplies.

Last month, Merrill Lynch & Co. raised its 2008 uranium prices forecast by 78% citing increased demand and delays in new mine output and increased demand from nuclear reactors being built in China and India.

Australia’s uranium mines are ERA’s [ASX:ERA] Ranger with annual production of 5,006 tonnes in 2005, BHP Billiton’s [NYSE:BHP; ASX:BHP] Olympic Dam with 3,688 tonnes and Heathgate’s Beverley with 825 tonnes.

Commentary

With more than 50% of global production coming from Canada and Australia, and only eight companies controlling over 70% of all resources, the scenario is developing much along the lines of the iron ore cartel. China is particularly vulnerable to ever increasing prices as it has very little domestic resources.

Even without massive nuclear expansion, global shortfall is currently 40%. Although prices have seen a ten-fold increase since the start of the century, expect strong gains once again this year.

#24 PorkLoin

PorkLoin

    Member

  • TT Member*
  • 2,194 posts

Posted 15 January 2007 - 04:38 PM

Posted ImagePosted Image
Posted ImagePosted Image
Posted ImagePosted Image
Posted ImagePosted Image
Posted ImagePosted Image
Posted ImagePosted Image
Posted ImagePosted Image

I thought we were going to get more of a correction, but all these might be turning back up for real. I don't own CCJ but even that poor beleaguered beast isn't looking too bad here IMO. Uranium oxide had stalled for a few weeks at $72 per pound, but maybe the market knows it's going on up some more.

Anyway, it's an awful quick turnaround, which makes me suspicious. On the other hand, it's a bull market and surprises are often to the upside.

The only ones in my main basket that aren't as strong (IMO again) are EMC.TO and MGA.TO. They're not looking "bad," just going sideways, and I had thought we'd get at least another down leg. Took profits in SAN.V, which today closed 1 - 2 cents above where I sold it. Still may get a "C" decline of an ABC there, and similar action could occur in all the stocks. DML.TO looks ripe for this too. Or not....


Best,

Doug

#25 PorkLoin

PorkLoin

    Member

  • TT Member*
  • 2,194 posts

Posted 01 February 2007 - 09:56 AM

Posted Image

Now that's what I'm talkin' about. Price had stalled at $72 for a few weeks, but it's added another 4%, now up to $75. Sweet.

My main basket of uranium stocks is northbound. Only two are down thus far today, FSY.TO and STM.V.

Odd, since they've been among the very strongest lately. Oh well.

:redbull:


Doug

#26 PorkLoin

PorkLoin

    Member

  • TT Member*
  • 2,194 posts

Posted 22 February 2007 - 04:43 AM

Posted Image

Oh Yeah

#27 PorkLoin

PorkLoin

    Member

  • TT Member*
  • 2,194 posts

Posted 26 February 2007 - 03:18 PM

Posted Image

John, am still in this one; have doubled my position. Maybe this time it'll GO...


Best,

Doug