Monday, February 27, 2006

Feb 27 Uranium Stocks Update: Urasia Energy (CVE:UUU )

two newsworthy items about Urasia today, one expected, the other very interesting

First Uranium Sales Contract Secured

Urasia Energy Ltd. ("Urasia") is pleased to announce it has entered into an agreement for the supply of uranium concentrates from its Akdala uranium mine in the Republic of Kazakhstan.

The contract is for the purchase of approximately 200,000 pounds U3O8 for delivery in 2006 to a major Western utility company.

As a new producer in the industry, from Central Asia, the Company is pleased to have finalised its first contract with a Western utility, and the first new contract since it acquired its interest in the Akdala uranium mine in November 2005.

Urasia Energy is a Canadian-based uranium producer that offers investorsexposure to lowcost, uranium production and growth. The Company plans tocreate shareholder value by focusing on development and operation of low-cost, in-situ leach uranium projects in Central Asia.

Analysis: no surprises here, basically good news but entirely expected. Stock jumped from $2.79Cdn to $2.90Cdn on an otherwise down day in the markets.

The Moscow Times Feb 28th

Russia plans to pump $10 billion into expanding its uranium resource base over the next 10 years, part of a program to accelerate the country's nuclear energy output, top government officials said Monday.

Spearheaded by the Natural Resources Ministry and the Federal Atomic Energy Agency, the program would increase annual uranium production sixfold by 2020, ensuring ore supplies for existing and new nuclear stations.

If the government does not act, Russian stockpiles of the ore will dry up in less than a decade, said an official from the Federal Subsoil Resource Use Agency, part of the Natural Resources Ministry.

Analysis: you can be sure that the uranium deficit between supply and demand will NOT be made up by any more old Russian warheads when the HEU agreement expires in 2013. Russia wants any and all uranium to herself, period.

To increase future supply, the government would double production at existing uranium mines and start exploration at a number of fields in Siberia and Buryatia. It would also set up joint ventures with CIS partners.

Analysis: CIS = Commonwealth of Independent States. Guess who is part of CIS? Yes, Kazakhstan, holding the 3rd largest uranium reserves in the world. Guess who is mining uranium in Kazakhstan?

Last month, President Vladimir Putin said nuclear power's share of Russia's energy use would increase from 15 percent to 25 percent by 2030. To achieve that goal, Russia plans to build 40 new nuclear reactors in place by 2030.

Analysis: As I've said before, Russia and China are both going to build 40 each. Kazakhstan is right next door to each country. Urasia is a low-cost ISL uranium producer. I'm going to leave it of at that..

 

6 Comments:

Blogger collinsofsachse said...

How thinly traded is UAEYF on the pink sheets in the US? Is it advisable to trade in the pinks?

5:22 AM  
Blogger pragmatic_1 said...

If you're looking for liquidity, then buying it on the Canadian exchange would be more sensable. If you're looking at holding this baby for several years, then buying under the pinks should not be as much a concern. I understand the Urasia will be looking to list on the senior TSX board (hopefully) this year. As it continues to grow to a mid sized producer it will probably look at graduating to the more senior boards in the US? Just a guess.

Different topic. What are the political implications of Russia's desire to get a greater supply of uranium from a country such as Kazahkstan? Russia is a huge bully and one of my concerns is that they would impose political or economic pressure for that country to direct its resources to Russia? Would that depress the prices Urasia could get as opposed to market prices? I do own Urasia in my portfolio.

8:11 AM  
Blogger charlottebandit said...

just_an_investor:

I thought about that as I read the 2020: Russian uranium depletion article yesterday.

The US is more of a threat than USSR because we have 200+ nuclear reactors, not including the scores of reactors used for education/scientific research and submarines.

They'll be slightly behind the times, but the US will REALLY need U. If Russia had more nuclear reactors online (they also have subs), they would use military force to acquire Kazakstan U deposits.

That's the only risk I see with UAEYF (UUU): anti-capitalist corruption. We'll see.

8:32 AM  
Blogger charlottebandit said...

Russia has an estimated amount of 615,000 tons of uranium in deposits.

Their existing russian U producers mine 3,325 tons, 1/5 of country's need, military need, "AND" export obligations. WOW!!!

Moscow Times 2/28/06

================

They're doubling production & also plan to build 40 new reactors by 2030.

I believe UUU will fill in the gaps for Russia, India, and possibly some European countries. Looks like UUU should be relatively "safe" from military actions by Russia. :)

1:24 PM  
Blogger collinsofsachse said...

I took the plunge on UAEYF and PALAF on the pinks in the US. I was watching their counterparts on the in Canada (PDN.to and UUU.v) to guide me as to a buying price.

I've owned CCJ for a while - and it continues to be my larges UR holding - but lately I have been spreading some plays among some juniors - the ones listed above and well as FRG and URIX.ob.

Thanks for your insight - hopefully the party will last a couple of more years...but eventually the supply will catch up with demand - right?

12:50 PM  
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1:53 AM  

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