Monthly Archives: May 2012

Correction In Precious Metals and Miners Creates Buying Opportunity

Correction In Precious Metals and Miners Creates Buying Opportunity
Recently the gold and silver miners have been outperforming the S&P 500 indicating that we may be seeing the rotation from overvalued equities into the undervalued miners. This is occurring on large volume indicating major investors are beginning to enter the deeply undervalued sector. The gold miners appear to be reversing on high volume indicating that we are seeing major accumulation at these price levels. A few bullish, high volume reversal days within a couple of weeks indicates that we could be very close or near the bottom of this consolidation.
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Cameco Looking To Acquire Undervalued Uranium Miners

Cameco Looking To Acquire Undervalued Uranium Miners
We believe major sovereign funds and miners will continue to make strategic investments in this beaten down sector. Cameco already had sufficient cash to operate and this raise may indicate that they are ready to make major moves. Cameco’s CEO Tim Gitzel recently said, We are making deals and we continue to scour the world and if we see something that fits for us, we’ll move very quickly.”
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Gold, Silver and The Miners Bottoming While Facebook Is Busting

Gold, Silver and The Miners Bottoming While Facebook Is Busting
Take a look at Groupon, Zynga, LinkedIn, etc. Their vogue will not last forever. Sentiment for the social media sector may be reaching an euphoric extreme, while the mining stocks have fallen into public disfavor. The miners are bottoming at historic low valuations while the initial public offering of Facebook is valued at 100 times trailing earnings. This eerily reminds us of the dot-com bubble in 2000. Recall a company such as “theglobe.com” which made the largest gain in history on the day of its IPO only to be bankrupt two years later. The CEO was also in his twenties. The brokers were able to find myriads of buyers beating at their gates. As the French say, “The more things change, the more they remain the same.”
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Why Canada’s Athabasca Basin Uranium Explorers May Soar On Foreign Investment?

Why Canada’s Athabasca Basin Uranium Explorers May Soar On Foreign Investment?
Canadian producers can now compete with Kazakhstan, Australia and Russia to sell uranium to China. Canada produces about 20% of the world’s uranium and exports over 80% of annual production. The fast growing nuclear industry has never been open to China and will create a boom in the Athabasca Basin for uranium explorers. This deal will allow Cameco, the largest publicly traded uranium company to deliver 52 million pounds of uranium to China by 2025. The contract is worth about $2.5 billion in sales. China is hungry for nuclear with dozens of reactors planning to be built over the next 10-15 years. Relating to financing and corporate development, Athabasca Uranium recently announced the appointment of Kim Goheen to its Professional and Technical Advisory Committee. Mr. Goheen recently retired from Cameco, the largest publicly traded uranium producer as Chief Financial Officer, where he played a pivotal role in Cameco's growth.
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Will A Euro Breakup Boost Gold and Silver Prices?

Will A Euro Breakup Boost Gold and Silver Prices?
Support for gold is at $1600 and $27.50. We may see an initial correction in US dollar terms but gold and silver are near key support levels, oversold and possibly just about to takeoff. We are reaching extremely negative sentiment indicators indicating a bottom both in precious metals and the extremely undervalued miners. When indicators reach this level a bottom reversal may occur sooner rather than later. Operation Twist is set to expire in June. If we don't hear word of a QE3 or additional stimulus then we can see a downward move in U.S equities. We saw this in the summer of 2011 as QE2 expired and in the summer of 2010 as QE1 expired.
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Graphite Stocks Gaining Investor Interest In Tough Markets

Graphite Stocks Gaining Investor Interest In Tough Markets
Check out my recent quote in Mining Weekly's article on Graphite. It would seem as if there is a new darling in the minerals market, as investor interest in graphite was seen rocketing over the past year. From a total of about four listed companies making it their business to supply hungry markets with the carbon allotrope in 2011, the number of listed firms had increased to about 30, with most listings taking place since the beginning of the year. Analyst Jeb Handwerger said that during the year, graphite had performed strongly, outpacing the generally depressed market.
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Why This Alaska Heavy Rare Earth Mine Is Unique

Why This Alaska Heavy Rare Earth Mine Is Unique
Recent headlines inform us that the Obama Administration has finally decided to increase pressures on China in the rare earth quandary by joining Japan and the EU in the case before the World Trade Organization. This may be a move motivated by the upcoming national elections as well as the pressures placed upon the President to say something or anything in response to Romney’s support of Bokan Mountain (Ucore) where he wrote an open letter to Alaskans emphasizing that their state is in the vanguard of America reclaiming rare earth independence.
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Mining Giants Are Looking To Lockup Long Term Supply Of Uranium and Rare Earths

Mining Giants Are Looking To Lockup Long Term Supply Of Uranium and Rare Earths
Global miner Rio Tinto announced that there were increasing risks of a supply shortfall in strategic metals. The majors are dealing with the rise of resource nationalism and rising permitting difficulties for new mines. Countries such as China, Indonesia, Namibia and Argentina among others have already expressed that they want a bigger slice of the pie adding export taxes and forex requirements. Recently one of our recent rare earth/uranium recommendations Pele Mountain announced an Updated PEA for its 100% owned Eco Ridge Mine Rare Earths and Uranium Project. The numbers are very compelling especially considering its dual advantage of potentially producing rare earths and uranium at a time where we may witness a supply shortfall in these metals. Already there are uranium mines operating at much lower grades than Eco Ridge's. With the growing rise of resource nationalism and the supply shortfall in critical rare earths and uranium, Pele's Eco Ridge seems to be a logical choice for majors desperate for new, economic, long life supplies of uranium and critical rare earths. The Ontario Province may see Elliot Lake as a strategic supplier of critical metals and uranium required for cheap and clean energy.
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Pullback In Graphite Stocks Presents Buying Opportunity

Pullback In Graphite Stocks Presents Buying Opportunity
Graphite is gaining investor’s interest as it is one of the few sectors in the natural resource space which has been outperforming the S&P 500. The S&P 500 has been hitting new highs while the Canadian Venture Index is hitting new lows. In 2012, graphite has been one of the exceptions rising in a down market. Graphite stocks have hit new highs and have recently pulled back, while gold and silver miners have hit 2 year lows. This demonstrates excellent relative strength in an overall weak natural resource equity environment. Why are graphite stocks outperforming?
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