By: Mickey Fulp
A Monday Morning Musing from Mickey the Mercenary Geologist
Uranium is commonly known as “the other yellow metal,” because the uranium oxide concentrate produced by early mines and mills was a bright yellow, coarse powder called “yellowcake.”
However, there is now good reason to consider uranium “green.” Nuclear power plants produce electricity with only a minute amount of greenhouse gases. With the current worldwide emphasis on reducing carbon emissions, environmental, scientific, and political communities are supporting expansion of nuclear power production as a green technology.
Even the co-founder of Greenpeace Patrick Moore supports nuclear power as a means of mitigating climate change.
My how times have changed!
Although nuclear energy continues to supply nearly 20 percent of our electricity, it’s been 14 years since a new nuclear power plant has been commissioned in the
Worldwide, nuclear energy supplies about 13 percent of electrical power and that percentage is projected to grow substantially over the next two decades. There are currently 56 new nuclear reactors under construction in the world and more than 200 are on the drawing board. There will be a substantial increase in uranium demand over the next 20 years.
Nearly half of the world’s 2009 uranium mine supply came from countries that are geopolitically unstable, corrupt, or unfriendly to the West. The top ten producers include
This is not an all-star cast of model governments.
I doubt few Americans would consider two other countries on this list,
As if this was not enough, one-half of our domestic uranium consumption for the past 15 years has been supplied by the dismantling of Russian nuclear weapons and the conversion of weapons-grade uranium to reactor-grade uranium. Known as the “Megatons to Megawatts” program, that supply agreement expires in 2013.
So, where will the
I think a partial answer lies in revitalizing our domestic uranium mining industry. There are numerous uranium projects in advanced permitting, construction, and development stages in the Western United States and
The uranium sector of our micro-cap junior resource market has been beaten up and trounced upon since the uranium spot price collapsed from $135 per pound in mid-2007. It is a forgotten commodity with a few strong companies surviving from the many juniors that piled into the sector during the uranium bubble days.
And that is precisely why I am interested.
As subscribers and regular readers know, I employ a contrarian philosophy and strive to identify sectors that are out of favor with the speculating investment community and choose undervalued companies with the right combination of share structure, people, and projects that will lead to rewards for shareholders.
I like to buy when volumes and prices are low to be well-positioned for a run-up when the sector comes back on the investor’s radar screen.
In the gold sector, I commonly invest in exploration companies that operate in countries with significant geopolitical risk. Since these emerging market countries have not had every meter of ground trod upon by curious geologists in the past, giant gold deposits still can be discovered by the tried and true methods of “boot leather and drilling.”
However, I am unwilling to take those sorts of risks in the highly sensitive and geopolitically risky uranium business.
The companies that draw my interest are exploring and developing projects in past and/or currently producing major districts in
In my opinion, the junior uranium sector offers good speculative risk/reward with current market valuations. I see opportunities to make some “green” with my uranium plays.
Folks, I urge you to do your own research and due diligence, assess your personal risk profile, and decide if there are companies in this space that are worthy of your investment.
Ciao for now,
Acknowledgements: A version of this musing first appeared in the summer issue of Micro-cap Review Magazine. I thank Shelly Kraft for the opportunity to publish. Jeff Stuart edited the text.
The Mercenary Geologist Michael S. “Mickey” Fulp is a Certified Professional Geologist with a B.Sc. Earth Sciences with honor from the
Mickey has worked for junior explorers, major mining companies, private companies, and investors as a consulting economic geologist for the past 22 years, specializing in geological mapping, property evaluation, and business development. In addition to Mickey’s professional credentials and experience, he is high-altitude proficient, and is bilingual in English and Spanish. From 2003 to 2006, he made four outcrop ore discoveries in
Mickey is well-known throughout the mining and exploration community due to his ongoing work as an analyst, newsletter writer, and speaker.
Disclaimer: I am not a certified financial analyst, broker, or professional qualified to offer investment advice. Nothing in a report, commentary, this website, interview, and other content constitutes or can be construed as investment advice or an offer or solicitation to buy or sell stock. Information is obtained from research of public documents and content available on the company’s website, regulatory filings, various stock exchange websites, and stock information services, through discussions with company representatives, agents, other professionals and investors, and field visits. While the information is believed to be accurate and reliable, it is not guaranteed or implied to be so. The information may not be complete or correct; it is provided in good faith but without any legal responsibility or obligation to provide future updates. I accept no responsibility, or assume any liability, whatsoever, for any direct, indirect or consequential loss arising from the use of the information. The information contained in a report, commentary, this website, interview, and other content is subject to change without notice, may become outdated, and will not be updated. A report, commentary, this website, interview, and other content reflect my personal opinions and views and nothing more. All content of this website is subject to international copyright protection and no part or portion of this website, report, commentary, interview, and other content may be altered, reproduced, copied, emailed, faxed, or distributed in any form without the express written consent of Michael S. (Mickey) Fulp, Mercenary Geologist.
-- Posted Monday, August 9 2010 | Digg This Article |
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