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[PorkLoin]

Uranium Bull Market Too Overheated? By Jon A. Nones 12 Apr 2007 at 01:08 PM GMT-04:00 LAS VEGAS (ResourceInvestor.com) -- Doug Casey, chairman of Casey Research, told listeners at the Uranium Stock Summit that there are three stages of a bull market: Stealth mode, worry mode and mania mode. He said the uranium bull market is entering the mania mode. Although the bull cycle is nearing and end, Casey said a lot of money can still be made. He said that mania stage in the dotcom era lasted about 2 to 3 years, and some of the best profits came out of it. Rick Rule of Global Resource Investments today told listeners that we are already in the midst of a uranium mania, “an insane mania.” He recommended selling. Casey introduced Rule as one who perpetually sells early. Rule agreed. “I always buy too early, I always sell too early,” he said. “My yearly return is 60%, so I’m going to continue to sell early.” Rule began his presentation saying “the thrill is gone; the easy money has been made.” He preached minimizing risks as opposed to maximizing reward giving three serious risk factors in the market today: At 113/lb, the price of uranium does not have to go up for miners to make it worthwhile. Only 20-40 management teams survived the 20-year bear market in the industry, which leaves about 550 uranium companies searching for expertise. Most of the companies don’t have any uranium, perhaps only in the company name, and therefore the spot price is irrelevant. “What’s free in the uranium market today?” Rule asked. “Nothing.” Rule used an analogy of betting on horse races. He said when a person places a bet on a horse, he or she is betting on the horse to win, show or place. Too many uranium companies today are merely threatening. Only 10% will win, place or show and 50% won’t finish the race at all, he said. “We have two choices in this market, we can be contrarians or we can be victims,” he added. “Every great party leaves a vicious hangover, so why not stock a little Alka-Seltzer.” He said every investor should have two exit strategies in mind: What’s the exit strategy of the company? Are they looking to be bought out or eventually to produce? What’s your exit strategy? Why do you own the stock? “Make the money, take the money,” he said. In a discussion panel, Jim Mustard of Haywood Securities, Kevin Bambrough of Sprott Asset Management and Dave Forest of Casey Energy Confidential all concurred that taking some profits is never a bad idea. Mustard said investors should keep an eye on the psychology of the market and spot prices for indications of overheating. “Don’t be afraid to sell,” he told listeners. “I do not see dark clouds on the horizon” in the commodities bull market, he said, but investors should cut back on the “pages of investments” on occasion to concentrate on the quality plays. Mustard added that the market still has a long way to go, but “I don’t think we’re going to see this kind of growth” in the next five years. Bambrough said Sprott has already exited Cameco [NYSE:CCJ; TSX:CCO], Paladin [TSX:PDN] and SXR Uranium One [TSX:SXR] because “everyone is looking at these companies.” He said uranium prices will top out in the next 12-18 months. Forest told investors to take profits on market hype minus fundamentals. “We are late in the cycle,” he said. “We’ve gone from homeruns of 10-baggers to doubles and triples.” He recommended closely watching other commodity markets as precious and base metal price fluctuations can affect the uranium market. “Don’t rely on the rising tide to lift all boats,” he said. “Keep in mind that things turn quickly.” Although the easy money has been made, analysts all agreed that there are still investment opportunities available in the industry. Investor’s just need to be “very selective,” Rule concluded. ____________________________________________________ Top Uranium Stock Picks By Jon A. Nones 12 Apr 2007 at 09:34 PM GMT-04:00 LAS VEGAS (ResourceInvestor.com) -- Professionals at the inaugural Uranium Stock Summit in Las Vegas, Nevada agreed that the secular bull market in uranium is in the final stages. But these experts also agreed there is still money to be made. Their advice: Be selective. Jim Mustard of Haywood Securities, Rick Rule of Global Resource Investments, Kevin Bambrough of Sprott Asset Management, Phil O’Neill of MP1 Capital and Marin Katusa of Casey Research offered suggestions on investment strategy with insight into their top three uranium picks. Jim Mustard’s Picks “There’s a tremendous amount of cash sitting on the sidelines waiting for an investment opportunity,” began Mustard. He told listeners to make commitments not only on assets but on management’s ability to bring them to fruition. He said investors should be sure to note the management’s road map and mining strategy. “It’s really all about people,” he said. Mustard said juniors must have structure in their mining plans and successfully manage risks in the market with technically driven goals. He said no bank is going to finance long-term uranium prices of $113/lb. Mustard said there is no magic formula for picking stocks, but gave the following list of criteria to examine: Commodity price Historic work and resources Exploration potential Management strengths and weaknesses Competitor activity M&A activity Grades vs. tonnes Permitting issues Production visible (2 years vs. 10 years) Mustard said he liked Khan Resources [TSX:KRI] and Western Prospector [TSXv:WNP] for the value of their developing assets with a Mongolian discount. On December 30, 2004, Khan received a final NI 43-101 report prepared by Roscoe Postle Associates Inc. (RPA) confirming resources at its 58%-owned Dornod property in Mongolia. According to the report, the No. 2 deposit contains some 296,000 tonnes of Inferred resources at an average grade of 0.302% U3O8, while the No. 7 deposit contains some 2.9 million tonnes of Inferred resources at an average grade of 0.381% U3O8. RPA estimates additional resources of 2.7 million tonnes at an average grade of 0.163% U3O8 contained within the No. 7 deposit. Last week, Khan reported further assay results of 39.1 metres containing 0.507% U3O8 at Dornod from its ongoing metallurgical test program. The company plans on developing facilities to produce approximately 4-5 million pounds of U308 per year over a mine life of 10 years. Western Prospector's management team is focused on the Saddle Hills Uranium Project in north-eastern Mongolia, where Russia previously explored five deposits and developed the Gurvanbulag mine. Historic resources calculated by the Russians during 1982-1989 aggregate 4.27 million tonnes grading 0.245% U3O8 for 23.0 million pounds, in their C1 category of resource. In their C2 category of resource, the Russians calculated 10.8 million tonnes grading 0.14% U3O8 for a contained 32.9 million pounds U3O8. Resources considered by the Russians to be defined as C1 ranking are categorized as Inferred Resources, according to a NI 43-101 report by Gerald Harper, Ph.D. P.Geo (ON.). The company is drilling with hopes to move Inferred resources over to Indicated or Measured resources in accordance with NI 43-101, and enhance confidence in much or all of the existing approximate 10.6 million tonnes of C2 category of Russian historic resources. Mustard admitted there is political risk in Mongolia, but believes these issues will be resolved in due time. On April 10, Ivanhoe Mines [NYSE:IVN; TSX:IVN] and its partner Rio Tinto [NYSE:RTP] signed a draft agreement with the government of Mongolia to develop the massive Oyu Tolgoi copper and gold project after long-time negotiations. Mustard’s third pick was Laramide [TSX:LAM], due to its massive Westmoreland project in Queensland, Australia. Westmoreland has an indicated resource of 15.6 million pounds at 0.088% U3O8 and an inferred resource of 32.9 million pounds 0.093% U3O8 which ranks it as one of the top 10 largest uranium deposits in Australia. Currently, the governing Labour Party in Queensland has a policy that does not allow for uranium mining. However, the competing Australian Liberal Party supports uranium mining and there is party convention due in April 2007. “All have production visible assets,” he noted. Rick Rule’s Picks Rule said the most important aspect of any company is management. Investor’s are betting on the management’s ability to bring value to the property. “Money is made where the rubber meets the road. And people make the money,” he said. He said it is important to find out the actual value of the property, not by asking the company, but by asking what someone else would pay for it. Also, investors should understand how much it’s going to cost to develop the property and where the money is going to come from, he added. For these reasons, Rule picked Denison Mines [TSX:DML], Azimut Exploration [TSXv:AZM] and Paladin Resources [TSX:PDN]. He said Denison has deep exposure in uranium worldwide with a strong track record.  As an intermediate uranium producer with five active uranium mining projects in North America, Denison expects estimated production of 5 million pounds of uranium by 2010. The company’s 25%-owned Midwest uranium deposit contains 41.7 million pounds of U308 of Proven & Probable reserves (345,000 tonnes grading 5.47% U3O8, 4.37% Ni and 0.34% Co), and is scheduled to begin production by 2010. Denison’s other assets include an interest in two of the licensed and operating uranium mills in North America, with its 100% ownership of the White Mesa mill in Utah and its 22.5% ownership of the McClean Lake mill in Saskatchewan. The company has exploration properties in the Athabasca Basin in Saskatchewan, Canada and in the Colorado Plateau, Henry Mountain and Arizona Strip regions of the Southwestern United States, as well as in Mongolia and, indirectly through its investments, in Australia. Denison is also the manager of Uranium Participation Corporation [TSX:U], a publicly traded company which invests in uranium oxide in concentrates and uranium hexafluoride.  He said that Azimut’s management is proven and will bring out value of its properties. The company is focused on exploration in Quebec, exploring for uranium, gold, nickel, copper, zinc and iron, and just made a series of deals to obtain four uranium properties. On March 27, 2007, Azimut and Majescor Resources signed a Letter of Intent for the West Minto uranium property. On April 2, Azimut and Rukwa signed two letters of intent regarding the North Minto and South Minto uranium properties. And on April 4, Azimut and Silver Spruce Resources signed of a binding Letter of Intent regarding the Hudson Bay uranium property. Paladin, although now at almost C$5 billion in market capitalization, can still be valued higher on its resources alone, according to Rule.   The company’s Langer Heinrich project in Namibia hosts 32.3 million tonnes of Measure and Indicated resources at a grade of 0.07% for 20,200 tonnes of U3O8. Inferred resources are estimated at 40 million tonnes at 0.06% for 23,800 tonnes of U3O8. The Kayelekera project in Malawi hosts 9.4 million tonnes at 0.12% for 10,850 tonnes on U3O8, while Manyingee has 12,000 tonnes at 0.08% and Oobagooma hosts 9,950 tonnes at 0.12%, both in Western Australia. Paladin is currently battling with France’s Areva for the acquisition of Summit Resources, raising its stock offer yesterday by 22% to A$1.18 billion (US$978 million). For a fourth company, Rule pointed to Motapa Diamonds [TSXv:MTP]. Motapa has recently received approval for three licenses covering 0.6 million hectares to explore for uranium, manganese and gold in Gabon. Rule said he liked companies with uranium considered a secondary asset, because it is often undervalued. Kevin Bambrough’s Picks Bamrough said companies need to have a solid business plan, where investors can look ahead at earnings versus share prices. He said investors should be able value the pounds in the ground as compared to peers. Bambrough picked Laramide, Tournigan Gold [TSXv:TVC] and Strathmore Minerals [TSXv:STM] as high quality plays. “All companies have excellent management ... but assets speak for themselves,” said Bambrough. He reiterated Mustard’s contention that the world-class asset Westmoreland can bring a lot more value to shareholders. He also noted possible policy changes in Queensland in the near future. In addition to Westmoreland, Laramide has four advanced uranium projects located in the U.S. The two most important of these projects are the La Sal Project, containing approximately 2.7 million pounds of U3O8 located in Utah, and the La Jara Mesa Project which contains 8 million pounds of U3O8 located in New Mexico. Bambrough said the Tournigan Gold has good potential in Slovakia, the third largest user of nuclear energy per capita in the world, in “virgin territories.” The company’s main asset has grades of 0.66% U3O8, he noted. The company’s Jahodna deposit has Inferred resources of 1.25 million tonnes at a grade of 0.656% for 18.2 million pounds of U3O8. The company plans to run a 100,000 tonnes-per-year operation at Jahodna. Using a uranium oxide price of $35 per pound the project was estimated to yield an after-tax Net Present Value (using an 8% discount rate) of $63.5 million. The after-tax Internal Rate of Return was estimated to be 44%. Tournigan's has earlier-stage uranium projects in Wyoming, South Dakota and Arizona, but also controls the historic Kremnica gold mine in Slovakia, the Curraghinalt gold project in Northern Ireland and gold exploration property in Nevada. Lastly, Bambrough said Strathmore has great value with 75 million pounds of uranium resources in the ground. He said the company will become a producer in the not too distant future and the stock is relatively cheap going forward. Strathmore currently has 20 active projects across the Americas, amounting to one of the largest exploration land packages in the Athabasca Basin, along with its holdings in the United States, Canada and Peru. Phil O’Neill’s Picks O’Neill picked JNR Resources [TSXv:JNN] and Hathor Exploration [TSXv:HAT], as well as a private company called Stans Energy Corporation. He said Stans has four uranium licenses in Kyrgyzstan and a lot of know-how and contacts in the former USSR to help expedite permitting. Chairman of the Board Dr. Fazlullin was a member of the Russian Uranium exploration program that discovered most of the uranium reserves in the former USSR and was in charge of the development of ISL acid technologies. The company’s Shaltinskaya project has underground workings of over 5300 metres at an average grade of 0.03%, while Kyzyluraan stretches for 200 metres at an average grade of 0.059%. O’Neill said once Stans goes public, investors will see a lot of resources. The company’s website boasts geological potential of over 240 million pounds of U308, according to the Geochemical Team of the State Geological Agency of Kyrgyzstan. “I believe the price of uranium will continue to go up - I like companies with resources,” said O’Neill. According to O’Neill, JNR is leading the uranium drilling in the Athabasca Basin with 13 projects, and has amassed a substantial portfolio of high-quality assets while working with Denison Mines on a number of projects. Most recently, on February 23, 2007, JNR (25%) and Denison (75%) announced drill results from 38 holes totalling 14,317 metres for the Moore Lake uranium project. Highlights from the Maverick Main zone included 3.20% U3O8 over 6.5 metres including a 3.5-metre intercept of 5.25% U3O8, 2.1% nickel and 0.65% cobalt, and 1.23% U3O8 over 8.5 metres, including a 1.5-metre intercept of 4.20% U3O8. Bambrough said Hathor also has the potential to find substantial resources in the ground. The company’s prime focus currently rests in a number of land holdings in prospective uranium bearing areas of Western Canada.   In the Athabasca Basin, the company holds several large claim blocks near some of the world’s largest uranium deposits, including the McArthur River mine, Cigar Lake and Midwest Lake. Hathor has also obtained rights to several million acres in the Hornby Bay Basin.  Marin Katusa’s Picks Katusa said he likes to set short-term goals and evaluate each stock based on these expectations. At this time, he said he favoured Pitchstone Exploration [TSXv:PXP], International Enexco [TSXv:IEC] and a new and unknown explorer Centram Exploration [TSXv:CNA-H]. Pitchstone currently owns 50% to 100% interest in the mineral rights to more than 200,000 hectares of land situated in the eastern Athabasca Basin, Saskatchewan and in the Hornby Bay Basin, Nunavut and Northwest Territories. The Hornby Bay projects include the Mountain Lake deposit, which contains an Inferred Mineral Resource of 8.2 million pounds U3O8 contained in 1.6 million tonnes at an average grade of 0.23% U3O8. The company recently entered into an agreement with Cameco [NYSE:CCJ; TSX:CCO] and Motapa Diamonds to jointly explore Motapa's extensive uranium exploration licenses in Gabon. Pitchstone also recently signed a Letter Agreement with Manica Minerals to earn an initial 51% interest in Manica’s three uranium projects in Namibia. International Enexco owns 30% of the Mann Lake property in the eastern Athabasca Basin, with UEM Inc holding 35% and Cameco, the operator, holding 35%. A phase one drill program encountered high-grade uranium. Two holes totalling 1,259 metres were drilled from the same collar location; one intersected two intervals averaging 7.12% U308 over 0.25 metre and 5.53% U308 over 0.4 metre. Phase 2 drilling program has been launched by Cameco at Mann Lake. Enexco’s 2007 exploration budget has been increased by approximately 300% over the 2006 budget with planned exploration costs for 2007 increasing to $1,500,000. However, the company’s flagship property is a copper-silver deposit. The Contact Property hosts Indicated resources of 132.4 million pounds of copper and 1.7 million ounces of silver, and Inferred resources of 238.7 million pounds of copper and 1.7 million ounces of silver - all at a 0.5% Cu cut-off. Further drilling will allow an updated resource estimate and enable Enexco to initiate a Pre-Feasibility Study and commence with the permitting and environmental processes required prior to pre-production and production. Centram listed on the Toronto Stock Exchange Venture shortly after completing a non-brokered private placement offering of 10,000,000 units (one common share and one common share purchase warrant) for $500,000 in April 2006. In early Feb. 2007, Centram entered into a letter agreement with Crossland Uranium Mines, an Australian company that listed on the Australian Stock Exchange today under the symbol CUX, regarding a joint venture. Crossland will contribute three advanced uranium properties to the JV, and Centram will have the right to earn a 50% interest by spending on these uranium properties a total of A$8 million ($6.6 million) over 4 years.  Centram recently announced another non-brokered private placement, this time with 12.5 million units (one common share and one-half of one common share purchase warrant) worth $5 million, bringing fully diluted shares up to about 41 million. Little else is available on the respective websites of both Centram and Crossland. Investors are encouraged to do their own due diligence concerning all of the stocks mentioned above.

[hiker]

thanks, Doug. I have not seen the Sprott analyst proven incorrect very often during the last 3 years of this bull advance in the uranium juniors. How bout you? you follow him closely?

[PorkLoin]

Hiker, I have to laugh -- I'd never heard of the Sprott guy. I wouldn't doubt that uranium prices will top out in 12-18 months. Lately, the rate of price ascent has increased, and even though it's been almost 4 years without a step backwards, things can happen like the warehousers dumping or a "Three Mile Island" type deal, etc. I've no interest in Cameco - it's such a big-cap now that I don't think it will move like others. And PDN and SXR do look toppy here, daily and weekly. I'll be interested to see what U3O8 price does in the next couple months and also be thinking hard about what degree of trend I want to focus on. In fact, already got stopped out on DIT.V - not giving them as much room as I used to. Doug