Info on the Uranium Market

This is a great article on the ins and outs of the Uranium Market.

The physics start with the little-understood but widely recognized
formula E=MC². Einstein's formula reveals the energy in nuclear reactions that
convert matter into pure energy--something physically impossible with chemical
reactions. A large nuclear reactor that powers some 700,000 homes invisibly
destroys just five pounds of uranium (roughly a 2-inch cube of pure uranium)
each day. The same amount of energy from a combustion power plant is produced daily by combining 20 million pounds of coal with 200 million pounds of air, not
incidentally yielding an equal weight in ashes and gases.

This is real reason why nuclear power is such a good idea. You can either destroy 5 pounds of something or 20 million pounds of another thing. Add this to the amount of green house gasses that is pumped out by coal plants and there is no comparison. I think all environmentalists should be pro-nuke if they are serious about avoiding global warming.

Secret World of Uranium Traders

Now this is a very interesting article on how Spot Prices for Uranium is currently done. I agree with this article's assertion that there needs to be more transparency and visibility in this market.

In mid-town Manhattan, near Grand Central Station, a lesser known
‘commodity exchange,’ run by New York Nuclear, has real-time screen trading
every Wednesday morning between 7:30 A.M. and 9:30 A.M. And the screen trading is for the real thing – the physical delivery of U3O8. The processed uranium is offered for delivery within a 30-day period at a licensed uranium conversion facility. Real product trading in real-time by real professionals, who mine uranium, consume uranium or act as a broker for either side.

No, the public is not invited to this clubby function. One must be
a certified market participant to bid for or sell U3O8 through New York
Nuclear’s Uranium Online. While NYMEX paper trading is open to amateurs and
professional traders, Uranium Online only permits recognized persons to bid or
offer uranium for sale.

Added 3 new Stocks to the Index

I will be adding 3 new Uranium stocks to my Index. Here they are:

Fronteer Development Group (FRG) Another Canadian company that also mines gold and copper as well as uranium.

USEC (USU) This is a US company that extracts enriched uranium from nuclear warheads and provides services for 2 nuclear plants in the US. They also operate the only gaseous diffusion plant in the US which is located in Paducah, Kentucky. They also provide storage and transport of spent nuclear fuel.

Cardero Resource (CDY) This is a small cap that mostly explores for gold, silver, copper, and iron ore. They are currently seeking a partner to develop their Peruvian uranium deposits.

Introducing the J.Michels Uranium Index

I am now actively tracking Uranium Stocks so I might as well post what I have on my blog. So far I have 7 stocks in my index and will add more as they become available. The other players in the industry are either on the pink sheets or only trade in Canada or Australia. Since I have no access to buying those names. I'll just post the stuff I have that trade in the US. Here are the stocks I have in my Index:

CCJ Cameco
RTP Rio Tinto
BHP BHP Billiton
DNN DENISON MINES
URRE URANIUM RESOURCES
EMU ENERGY METALS
URZ Uranerz Energy

I just weighted the index equally because I don't have time to adjust crap to make things fit together. It would be cool to weight these companies by how many tons of Uranium they mine in a year or how much proven reserves they have or something. I don't have time for that because I'm just doing this for fun.

So what I did was just put 100 shares of each stock into my Yahoo Portfolio and I'll post the results. So far this thing is up 5.81% with most of the gain coming from CCJ.

Uranium Futures Set to Trade on May 6

This should be good for the Uranium Producers mentioned in this article.

And Nymex has "correctly identified that the nuclear power industry is
undergoing a renaissance with tremendous growth ahead, as the world struggles to deal with strong emerging market and Asian growth, while facing the reality of
peak oil and an energy-constrained world," he said.

He is right because the Chinese are building reactors like crazy to reduce the amount of oil they need to run their industry.

Physicists and engineers at Beijing's Tsinghua University have made the
first great leap forward in a quarter century, building a new nuclear power
facility that promises to be a better way to harness the atom: a pebble-bed
reactor. A reactor small enough to be assembled from mass-produced parts and
cheap enough for customers without billion-dollar bank accounts. A reactor whose safety is a matter of physics, not operator skill or reinforced concrete.

I think the US needs to seriously look into what China is doing with their reactors. If we can copy them cheaply we may get out the global warming disaster zone that Gore keeps hitting us with. In any case these futures contracts will be a good deal for the companies mentioned in the article. Here are the companies:

Cameco (CCJ)
Denison (DNN)
Uranium Resources (URRE)
Uranium One (CA:SXR)
Energy Metals (EMU)
Uranerz Energy (URZ)
Strathmore Minerals (CA:STM)

These seem like the pure plays. (I have only researched Cameco myself) These companies are the bigger integrated mining companies that also mine uranium as well as gold, iron, etc. They are:

Rio Tinto (RTP)
BHP Billiton (BHP)

This article explains how a SXR Uranium One (CA:SXR) might become the 2nd biggest uranium producer by merging with UrAsia Energy. The combined company will end up hauling in 19 million pounds of uranium by 2012. In any case I'm going to fimiliarize myself with this industry in the same way as I did with the Tanker Industry last year. You can't beat a metal that has gone from $20 a pound in 2002 to $113 a pound today.