Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
This Dividend Aristocrat Is Leading the 5G Revolution - 22nd July 19
What the World Doesn’t Need Now is Lower Interest Rates - 22nd July 19
My Biggest 'Fear' For Silver - 22nd July 19
Reasons to Buy Pre-Owned Luxury Car from a Certified Dealer - 22nd July 19
Stock Market Increasing Technical Weakness - 22nd July 19
What Could The Next Gold Rally Look Like? - 22nd July 19
Stock Markets Setting Up For A Volatility Explosion – Are You Ready? - 22nd July 19
Anatomy of an Impulse Move in Gold and Silver Precious Metals - 22nd July 19
What you Really need to Know about the Stock Market - 22nd July 19
Has Next UK Financial Crisis Just Started? Bank Accounts Being Frozen - 21st July 19
Silver to Continue Lagging Gold, Will Struggle to Overcome $17 - 21st July 19
What’s With all the Weird Weather?  - 21st July 19
Halifax Stopping Customers Withdrawing Funds Online - UK Brexit Banking Crisis Starting? - 21st July 19
US House Prices Trend Forecast 2019 to 2021 - 20th July 19
MICROSOFT Cortana, Azure AI Platform Machine Intelligence Stock Investing Video - 20th July 19
Africa Rising – Population Explosion, Geopolitical and Economic Consquences - 20th July 19
Gold Mining Stocks Q2’19 Results Analysis - 20th July 19
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Uranium Stocks to Benefit From Nuclear Power Resurgence

Commodities / Uranium Nov 23, 2012 - 08:47 AM GMT

By: Money_Morning

Commodities

Don Miller writes: Nuclear power is poised to make a comeback, and the spike in uranium demand it will bring over the next few years will send uranium stocks soaring.

While the Fukushima nuclear disaster in Japan in March 2011 stirred a lot of talk about abandoning nuclear power, nations have since come to realize their energy needs can't be met without nuclear being part of the equation.


The Japanese blowout scared the public so badly, in fact, that many governments vowed to severely cut back on nuclear power. Germany said it would quit using it altogether.

But then reality struck.

Major export economies in Europe and Asia have energy-intensive industries that can't just dump nuclear energy overnight.

The best proof that nuclear is not going away is right in Japan, which already has been forced to restart two reactors, and more will be restarted soon.

The Prime Minister of Japan called restarting the reactors a "matter of national survival," because the high cost of imported liquid natural gas was crippling the economy.

And nuclear energy has proven itself to be a safe alternative to the smog-belching coal plants in emerging countries like China and India.

Even oil-rich countries like Saudi Arabia are building new nuclear reactors now -- a clear sign nuclear energy is here to stay.

Simply put, the world not only needs low-cost nuclear power - it needs more, not less of it.

And uranium is the only fuel that can possibly give billions of new consumers in energy-starved countries like India and China the power they need.

Demand Will Drive Uranium Prices
Nuclear power currently provides about 13.5% percent of the world's electricity, and that's likely to grow given the new capacity slated to come online.

A total of 31 nations across the globe have 436 nuclear reactors under production. Globally a total of 95 nuclear reactors are planned over the next two decades with 62 already under construction, according to the World Nuclear Association (WNA).

And each of those plants will use 500,000 pounds of refined yellowcake per year.

But miners can't satisfy the world's current appetite for uranium, much less higher demand in the future.

The WNA has projected 52,221 tons of production in 2012. Meanwhile, uranium demand is expected clock in at around 77,000 tons.

Demand for uranium is expected to jump 7% per year, reaching 110,000 tons by 2017.

Altogether, the planet could come up 400 million pounds short by 2020.

Still, the cost of uranium production means the industry needs to get about $85 per pound to make it worth bringing new mines into production.

But rising demand should take care of that.

"When those supply and demand lines intersect, the only thing that can happen is prices go up," noted natural resources expert Rick Rule recently told The Daily Crux. "If the prices don't go up, the lights will go out."

Fukushima Creates Uranium Stock Opportunity
The Fukushima disaster and all the negative talk that followed sent uranium prices -- and uranium mining stocks -- into a nosedive.

Prices for uranium tumbled to about $41 per pound from $68, according to Ux Consulting.

Uranium stocks suffered accordingly.

The Global X Uranium ETF (NYSEArca: URA), for example, has fallen nearly 23% year-to-date.

But for investors today, that decline is an opportunity.

Despite what happened at Fukushima, the overwhelming appeal of nuclear energy has set the stage for a rebound.

It's only a matter of time before the demand for energy in emerging markets will drive a new nuclear boom.

And with prices at rock-bottom, it's time to put uranium mining stocks on your radar.

Investing in Uranium Stocks
The key question for investors is: when will uranium prices turn around?

Rule says investors with a two- to four-year time frame will be the big winners.

For a pure uranium play, Cameco Corp. (NYSE: CCJ), with its $8.9 billion market cap, is the best of the breed for institutions and small investors alike.

Cameco is one of the world's largest uranium producers, with over 16% of the world's supply. Its McArthur Lake and Cigar Lake deposits are the largest in the world, with over 476 million pounds of proven and probable reserves.

Even though the company just reported weak earnings for the third quarter, analysts are urging investors to scoop up shares on the recent dip.

"We like Cameco on its top producer status...organic growth in safe jurisdictions, healthy balance sheet, vertical integration, and dividend," Raymond James analyst David Sadowski told the Financial Post.

If you're looking for a leveraged play, Denison Mines Corp. (NYSEAMEX: DNN) is a small cap miner with several exploration projects that give it big potential for growth.

Denison is already in partnership with Cameco in a potentially large deposit called Wheeler River.

Denison also has a 22.5% ownership interest along with Cameco in the McClean Lake uranium mill, one of only two in the Western hemisphere.

Eventually, Cameco may buy out the Wheeler deposit and McClean Lake or simply swallow Denison.

If not, its leverage to uranium still makes it an interesting play.

Consider this: When uranium almost doubled in a matter of months towards the end of 2010, DNN rose nearly 300%.

You don't want to miss out on gains like that.

Source :http://moneymorning.com/2012/11/21/uranium-stocks-to-benefit-from-nuclear-resurgence-ccj-dnn/

Money Morning/The Money Map Report

©2012 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules