Thursday, March 23, 2006

Mar 23 Uranium Stocks Update: Paladin Resources (TSE:PDN)

Paladin (PDN.TO) secured its third uranium contract today, 2.5 million pounds strong, again with no ceiling to the sales price. Another favorable announcement, sending its stock up 8% on the ASX so far. Correspondingly, Paladin's stock in Toronto will be set for a quite a nice gain. Other uranium stocks like Urasia might benefit as well; after all, Urasia is actually mining uranium out of the ground as we speak, whereas Paladin is close to, but not quite yet there.

Speaking of which, I had replied a few days ago March 20th to a comment on my post "Uranium Mining Stocks and their Resource Ties" that I was slightly worried about the uranium juniors. Lo and behold, an article came out today March 23 from uranium guru Doug Casey cautioning people on buying uranium exploration companies that have little intention or are too far away from seriously being considered producers. In fact, this paragraph taken from his article in entirety sums up what I've been pointing out to my readers these past few months:

The question is: Which stocks to buy? I'm looking to concentrate the junior uranium portfolio for our Casey Energy Speculator on a modest handful of quality companies, the kind that have a real chance of making a discovery and creating value and aren't just relying on hype to move higher.

The biggest danger as I perceive it today is the newly minted uranium investor who is confounded by the hundreds of juniors uranium companies listed currently. This is a minefield that can only be sidestepped by doing very good due diligence, and unfortunately, can be totally obscured by mass investing psychology.

When uranium junior "mining" companies (and I mean very small ones under 50 million market caps) lay claim on a stake of land and report historical estimates on the amount of uranium that could be in the ground, I hope that people realize there is a very large number of years before that uranium can be mined out, if even that is truly what the company wants. Many are seemingly along just for the ride, on the coat-tails literally of strong, fundamentally sound companies like Paladin who have a plan and are executing it.

So heed my warning, uranium investors beware! Uranium juniors with market caps 50 times less than Paladin and Urasia indeed are potentially more valuable, but the risk is exponentially magnified if you pick the wrong one. This is not to dissuade investors to get in on the grassroots, but make sure you can afford any miscalculations. Oh yeah, and subscribe to my free updates!
 

4 Comments:

Blogger charlottebandit said...

Exploration Juniors:

I have discussed this with another uranium bug who introduced me to uranium stocks and we had different opinions.

I prefer near-term producers & 1-2 really advanced, development phase U companies.

---------------

Uranium Jrs have the highest potential gains currently, but very risky because it takes so long to come into production.

Where the real money ($$$) is in jrs, is when they have excellent properties that have completed a 43-101 because majors WILL buy them out to increase their value and create a further dominant uranium position.

That's why Cameco is currently monitoring 100s of mining companies, proven reserves, and uranium grade. These small jrs don't expect to go into production any time soon, but know that the uranium movement is long-term which greatly increases their chances to be bought out which means $$$$$ for shareholders.

7:52 AM  
Blogger charlottebandit said...

Not all jrs are the same. I'm currently have these in my scope:

- Alberta Star Dev. (ASX)
- Titan Uranium (TUE)
- CanAlaska Ventures (CVV)
- Pathfinder Resources (PHR)

All have excellent, experienced management with uranium backrounds and very promising uranium holdings.

Production? No time soon, but great picks for buyouts which will reward shareholders.

7:57 AM  
Blogger charlottebandit said...

Looks like the Chinese will be able to publically meet with Titan Uranium management without having to be discreet.

This will be at the Global Chinese Financial Forum--Vancouver Conference. Vancouver Conference

8:09 AM  
Blogger uiyui said...

welcome to the wow power leveling cheap Wow gold service site, buy cheap wow gold,wow gold,world of warcraft power leveling buy wow gold

6:12 PM  

Post a Comment

Links to this post:

Create a Link

<< Home