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By: Doug Casey, Casey Research
The Casey Files Ever since I got onto the uranium story back in 1998, I have remained a steadfast believer that yellow cake was headed north of $100. The rationale for that projection is as clear to me today as it was back then. Simply, nuclear power is the cleanest, safest, cheapest and most abundant source of mass energy on the planet. Yet, thanks to environmental alarmists, almost universally ignorant of science and technology, egged on by an arm-waving priest class, both new uranium mines and nuclear reactors can take upwards of 20 years to bring on line. As a result, uranium has been in a worsening supply deficit since 1989. So far, so good on my original call, with prices now topping $60 a pound, up 700% from the low of $7.10 a pound in 2001. Those gains in the underlying commodity have translated, literally, into fortunes for some of our subscribers, those who bought into the uranium stocks we brought to their attention while they were still selling at bargain prices. But just when I thought the picture for uranium couldn’t improve, the news broke that Cameco’s much anticipated For reasons explained by Doug Casey The uranium industry is reeling. On October 23, Cameco, the world’s largest yellowcake producer, announced that its This is a pivotal development. In short, this is one of the few projects that could make a significant difference for the uranium market… or, it was. Considering that the market had little breathing room even with At the risk of hyperbole, the loss of Cigar could kick off a spectacular run for uranium stocks. Although share prices for uranium exploration companies have had stellar gains over the last three years (greater than 1,000% in a number of cases) a $5 or $10 jump in the uranium spot price over the coming months could touch off buying of even greater proportions. A frenzy reminiscent of tech stocks in the late 1990s is brewing. Investors that haven’t already done so should be taking this chance to position themselves in quality uranium issues. While a uranium furor will lift all boats (at least at first), the truly spectacular gains will come from those companies that have the management expertise and prospective projects needed to produce a discovery during the bull run. Take UEX Corp, for example. In June 2005, when uranium stocks in general were enjoying excellent gains, the company reported a staggering drill intercept of 58.3% U3O8 from its Shea Creek property. The stock jumped 80% in a single day. Less than three months later it was up 180%. And that was when uranium was selling for $30 per pound. With the price now over $60—and millions of new investors clambering to get a piece of the action—any company that comes up with a discovery stands to make huge returns for investors, nearly overnight. And if recent events at Which companies have the right stuff to cash in? JNR Resources, one of the companies we’ve been following on behalf of subscribers to our Casey Energy Speculator newsletter, recently reported tantalizing surface samples of up to 48% U3O8 from its Of course, we’re not betting the farm on that one company. Another of our followed stocks is a micro-cap explorer sandwiched between uranium majors Cameco and Cogema in the uranium-rich southeast There is much that needs to be said about the universe of junior uranium explorers, the vast majority of which are little more than promotional exercises, but for now we’ll just say that taking the time to understand the difference between a paper shuffle and a well-run company with scale and grade in the right geological setting is time well spent. As the importance of the crisis at To learn more about the Casey Energy Speculator — including how to sign up for a no-risk trial subscription—visit www.caseyresearch.com. -- Posted Tuesday, October 31 2006 | Digg This Article | Doug Casey, legendary natural resource speculator and author of “Crisis Investing”, one of the best-selling investment books of all times, has helped tens of thousands of investors become a great deal richer. His monthly newsletter, the International Speculator, which is now in its 26th year, recommends almost solely companies that can be expected to generate a double- or triple-digit return within a year. You can view all of Doug’s current best picks without risk or obligation. Learn more. Previous Articles by Doug Casey |
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