NYSE: CCJ Archive
This Tiny Mining Sector Is About to Soar
by David Fessler, Investment U Senior Analyst
Tuesday, May 21, 2013: Issue #2038
Something big is about to strike the mining industry. When it does, savvy investors have a grand opportunity on their hands.
It all started back in 1993 when the United States and Russia signed a historic agreement creating what’s called the “Megatons to Megawatts” (MTM) program.
The program’s goal is turn the deadly highly enriched uranium inside Russian nuclear weapons into the fuel for American power plants.
When the program comes to an end in December, it will have converted 500 metric tons of highly enriched uranium (about 20,000 nuclear warheads’ worth) into fuel for America’s nuclear reactors.
On March 4, 2012, Russians re-elected Vladimir Putin for a third term. Given Putin’s disdain for the West, it’s doubtful the MTM program will continue.
It will leave a big hole in the world’s supply of enriched uranium. It will also leave Russia in the uranium catbird seat. As the supply from dismantled warheads wanes, worldwide uranium prices could double from current levels.
Take a look at the graph below…
More Good News for Uranium: China’s Nuclear Energy Build-Out
by Mike Kapsch, Investment U Research
Thursday, February 14, 2013
It’s no secret uranium prices have plummeted since the Great Recession and Japan’s Fukushima disaster. In 2007, a pound of U3O8 was worth as much as $136. Today, the same amount sells for just $43.88.
Yet, of all the places you could invest this year, I’d say one of the best will be the nuclear industry… Especially in miners that export uranium to China. Why?
The reason is two-fold. Despite all the controversy surrounding it, global demand for yellowcake and nuclear energy is actually higher today than it was before Japan’s nuclear meltdown in 2011. And when it comes to China, there’s simply no other country like it, expanding as much, or as quickly, into nuclear energy.
Within the next 10 to 15 years, China is set to surpass the United States as the largest uranium-consuming nation in the world.
As Mining.com reports, “As of November 2012, China had 15 operating reactors (11.9 GWe of installed capacity), and 26 reactors were under construction (27.6 GWe), that amounts to about 42% of reactors under construction worldwide. Additionally, 51 reactors were planned (57.5 GWe) with its building due to start within three years, and many more than 100 units are proposed, which are likely to be commissioned before 2030.”
As you can see from the chart, the United States currently has just over 100 operating nuclear reactors. Before 2030, China plans to more than double that figure. If we assume the average nuclear reactor costs around $4 billion to construct, and that China will follow through constructing its proposed reactors, this energy build-out could be upwards of $708 billion. It’s a massive undertaking, the likes of which have never occurred before in the nuclear industry. But the reason it’s happening isn’t all good.
China is the most polluted country in the world. In Beijing, air pollution is so bad it hit hazardous levels 20 days in January. Other reports state you can actually see the pollution from outer space. Things are so bad, in fact, residents in Beijing right now can receive $19,000 in government subsidies when they purchase an electric vehicle.
To continue reading, please click here...Are U.S. Nuclear Power Plants Going the Way of Coal Plants?
by David Fessler, Investment U Senior Analyst
Tuesday, January 29, 2013: Issue #1958
Last October, Dominion Resources, Inc. (NYSE: D) announced it would be closing its Kewaunee nuclear power plant. Located in Wisconsin, this small, 566-megawatt (MW) unit is the first nuclear plant to succumb to cheap natural gas.
The boom in U.S. shale gas production has natural gas prices at 10-year lows. It’s thrown an interesting curve at the domestic power market. Many utilities are retiring old coal plants in favor of natural gas. Are nuclear plants right behind?
We’ll analyze where the industry is today and where it’s going. First, let’s take a look at coal plants versus natural gas-fired ones.
Many coal-fired power plants in the United States are being retired, in some cases long before the end of their useful lives. How many of the 1,169 currently operating in the United States are on the hit list?
A report from the Union of Concerned Scientists entitled “Ripe for Retirement” identifies 353 of them. Check out the map below.
These plants total 59 gigawatts (GW) of generating capacity. That’s about 18% of the total coal-fired plants in the United States, and 6% of the nation’s total power generation capacity. Most of the plants on the list are older, less efficient and no longer economically viable.
The real problem is that these plants are big polluters. They’d be too expensive to upgrade to meet the latest Environmental Protection Agency’s (EPA) emissions guidelines.
To continue reading, please click here...Uranium: Have We Finally Reached a Tipping Point?
by Mike Kapsch, Investment U Research
Friday, January 4, 2013
Haven’t considered investing in uranium lately?
Can’t say I blame you.
Over the past two years, it’s been ugly.
Of course, the tipping point for nuclear energy’s decline wasJapan’sFukushimadisaster. This was about as bad as a nuclear accident gets.
But, as it often does, time can change everything.
On Sunday, December 9, Japan elected Liberal Democratic Party (LDP) leader Shinzo Abe to be prime minister.
In addition to “getting the Bank of Japan to pump liquidity into its economy,” as Investment U Senior Analyst Carl Delfeld pointed out a couple of weeks ago, he’s also mulling over Japan’s energy options.
And just 20 months after the previous administration vowed to abandon nuclear energy altogether, Mr. Abe wants to get back on track.
To continue reading, please click here...How to Play Uranium’s Coming Supply Shortage
by Mike Kapsch, Investment U Research
Friday, September 28, 2012
Despite all of the critics out there, uranium prices may be heading higher sooner than most people think…
Cameco (NYSE: CCJ), the world’s third-largest uranium producer, says a supply shortage is set to hit full-on by the end of 2013 and prices should turn around for the next several years.
What exactly is happening?
Well, first and foremost, a treaty from the Cold War between Russia and the United States, that provides 24 million pounds of uranium per year to the market from decommissioned nuclear weapons, will expire at the end of 2013.
This treaty alone represents 16% of total uranium demand each year. It’s a significant amount to say the least.
But it’s not the only reason uranium prices are set to head higher…
With uranium at about $47 per pound, there’s not much incentive for companies to keep producing uranium or build new mines.
As the Wall Street Journal reports, BHP Billiton (NYSE: BHP) made the decision last month to cut back a “$30-billion expansion of it’s Olympic Dam mine and sell its Yeelirrie uranium deposit in Western Australia.”
To continue reading, please click here...Uranium Stocks Set to Double?
by Justin Dove, Investment U Executive Editor
Tuesday, May 8, 2012: Issue #1768
Not many markets have been written off by investors more than uranium since last March.
Understandably, the Fukushima incident left a bad taste in everyone’s mouth. Countries such as Germany and Japan claim they’re done with nuclear power altogether.
But surprisingly there’s been a buzz recently in my inbox about a potential rebound in the uranium market.
My interest was piqued, but I wanted to dig a little deeper into the story. So I dialed up two of the smartest people I know on the subject to get their take – Global Resource Investments CEO and legendary contrarian Rick Rule and Investment U’s own commodity and resource expert Matthew Carr.
And after talking to them, it’s my belief that we’re finally at a bottom in the uranium market. There’s even reason to believe in a potential double over the next two years.
Below I’ll discuss an easy way to capitalize on the rebound. But first I’ll share what I learned about the uranium market from Matt and Rick.
“Few people are excited about uranium right now. And that’s understandable after the Fukushima disaster last year,” Matt told me. “It jolted the entire uranium market. Here’s the thing though: You can earn yourself a double investing now in uranium. But it’s not going to be overnight.”
Matt told me he sees Japan using more LNG for the near future. And for him it’s too early to tell if Japan will ever go back to nuclear. But he obviously sees strength in the uranium market over the long term.
To continue reading, please click here...An Acquisition That Should Ignite the Uranium Market
by Jason Jenkins, Investment U Research
Friday, September 2, 2011
One of the world’s largest uranium producers and a company that Investment U has recommended in the past – Canada’s Cameco (TSE: CCO) – has launched a C$520-million hostile takeover bid for Hathor Exploration (TSE: HAT).
The goal is to acquire Hathor’s high-grade Roughrider deposit in Saskatchewan’s prolific Athabasca Basin. The Roughrider deposit is a promising high-grade discovery that sits just 25 kilometers northwest of Cameco’s Rabbit Lake mill. (Yes, they’re on the metric system in the Great White North.)
Cameco initiated its all-cash hostile bid for Hathor earlier this week, after talks aimed at a friendly deal failed. Cameco wants to expand its output from the Athabasca Basin mining region in Western Canada.
What this move may do for the uranium market is convince investors that we’ve hit the bottom. If that’s the case then Cameco’s action may be the catalyst for a recovery.
The uranium market has been in a freefall since the March 11 earthquake and tsunami damaged Tokyo Electric Power Co.’s Fukushima Dai-Ichi power station. The Japanese disaster created international angst regarding the safety of nuclear energy – a prime example is Germany’s decision to halt nuclear plant development and, over time, phase it out as an energy source. Italy and Switzerland have also cancelled plans to build new reactors. It doesn’t matter. Uranium demand growth is coming from the developing world.
Three Reasons Uranium Will Rally
As I have stated before Cameco (NYSE: CCJ) has been previously recommended and until its acquisition announcement had been trading below half its pre-Japanese crisis price. Or for slightly less exposure in a still-solid ETF, there’s Market Vectors Nuclear Energy (NYSE: NLR).
Good investing,
To continue reading, please click here...Is It Time to Jump In or Out of Nuclear Stocks?
by David Fessler, Investment U Senior Analyst
Wednesday, July 6, 2011
You might think the answer is a no-brainer. But dig a little deeper and you might be as surprised as we were…
In the wake of the Fukushima disaster this past March, many nuclear power stocks and uranium miners are still smarting.
A nuclear power plant exploding before your eyes is a powerful vision. Many investors couldn’t get out of nuclear stocks fast enough.
Was the selling overdone? The answer is yes, but it’s a qualified yes. Let’s quickly review the nuclear power industry, putting Fukushima aside for a moment.
The Worldwide Nuclear Power Industry
There are about 440 nuclear power plants operating in 31 countries, worldwide. In total, these reactors produce about 376 Gigawatts (GW) of power.
The United States currently has 104 commercial operating nuclear reactors producing about 101 GW. As you can see from the EIA graph below, most were constructed between 1970 and 1990. The last one to come online was the Tennessee Valley Authority’s Watts Bar 1 unit in 1996.
Three Reasons to Invest in Japan Now
by Louis Basenese, Investment U Research
Thursday, March 17, 2011
As the fallout from the devastating Japanese earthquake and tsunami continues, it’s little surprise that the country’s Nikkei 225 stock exchange has endured a rough week.
Since last Friday’s close, the index has fallen by 12.6%, with the crisis reverberating through other global markets.
Few people know exactly how long it will take Japan to recover and rebuild, nor the full impact of the destruction in the world’s third-largest economy. But let me boil it down for you:
Here’s the story…
Three Reasons to Invest in Japan Over the Long Term
Let’s deal with the upside for investing in Japan first. And there are three parts to it…
Chart courtesy of Business Insider & Societe Generale
To continue reading, please click here...What Japan’s Nuclear Crisis Means for Investors
by David Fessler, Investment U Senior Analyst
Tuesday, March 15, 2011
There’s no question that the earthquake/tsunami disaster in Japan is another monumental human tragedy.
One of the most serious problems is the catastrophic damage caused to Japan’s nuclear power plants – an issue that will spill into the global nuclear power industry at large.
So far, two explosions have rocked the heavily damaged Daiichi nuclear plant and as many as three reactors at other nuclear power plants may have also sustained damage.
Authorities are currently operating under the assumption that a partial overheating and melting of the reactor cores has either already occurred, or is in process at Daiichi Units One, Two, and Three.
Unit Two may in fact turn out to be the worst of them, as its fuel rods may have been totally exposed for some time.
To combat the problem, authorities are pumping boric acid and seawater into the reactor vessels, which stops the nuclear chain reaction and provides further cooling to the reactor cores.
And while it also effectively prevents those reactors from ever operating again, it significantly lessens the chance of a full Chernobyl-like core meltdown and the catastrophic release of large quantities of radioactive gases into the atmosphere.
To say that the events in Japan will deal a blow to the nuclear power is a given. However, it remains to be seen whether it’s the ultimate death knell. Let’s take a look…
To continue reading, please click here...
