Is The Uranium Price Forming A Potential Double Bottom Breakout?

While most of the resource market has been in red, I am witnessing one of our sectors, the uranium miners (URA), solidly in the green.  The uranium price appears to be making a potential double bottom reversal.

The uranium miners are being led by one of our long term recommendations Uranerz Energy (URZ) which has made an explosive upward move since announcing the recent financing support from the State of Wyoming.

While gold and silver continues to search for a price level to stabilize and find support, oil prices are closing in on $100 and natural gas is breaking above the $4 mark as the growing global economy heats up the clean energy sector.  That is why I always encouraged diversification across the metals complex.  One should not own just gold and silver but look to the potential clean energy metals such as rare earths, PGM's and uranium, which are all spiking in demand with limited supplies.

I have always emphasized the importance of looking into favorable jurisdictions and highlighted the State of Wyoming.

Recently Uranerz announced that they were granted $20 million from the State of Wyoming to fund completion of construction at Nichols Ranch.  In today’s market environment where resource capital is hard to come by, to see this form of support through non-dilutive and low interest rate loans is truly remarkable.  This is a testament to the quality of the companies assets and the management team.  It also shows the great support from the State of Wyoming, one of the friendliest mining jurisdictions in the United States.

Do not forget that Uranerz's Nichols Ranch is just the first ISR mine that will be coming into production.  The company controls a large land position with the potential to bring additional satellite projects into production.    They are surrounded by Cameco and Uranium One.  It should be noted that Uranium One was recently taken private by the Russians.

Uranerz already has a processing agreement with Cameco and has locked in long term uranium contracts at much higher prices with major U.S. power companies.  Uranerz is crucial for safe and stable uranium production in an extremely critical time.  Remember the U.S. is the largest consumer of uranium in the world and produces less than 10% from domestic production.  Most of the supply comes from converted weapons from Russia.  However, this is set to expire at the end of 2013, right when Uranerz should be producing yellowcake.

Uranerz CEO Glenn Catchpole has been in the uranium mining industry since the 1970's specializing in the in-situ recovery method.  He helped build Uranerz Energy from a start up uranium exploration company in 2005 into a near term ISR producer.  The Uranerz Nichols Ranch Project in the Powder River Basin is currently under construction and fully permitted.  Start up is estimated towards the end of 2013.

Recently the state of Wyoming approved a non-dilutive $20 million loan with excellent terms.  The state of Wyoming has been producing Wyoming since 1958 and is extremely committed to the uranium mining industry.  Wyoming supports and encourages mining through low cost, non-dilutive loans.

Uranerz is advancing towards production with an estimated goal of start up at the end of 2013.  With the recent loan, Uranerz can move forward into becoming the next US uranium producer.

Despite making huge advancements and de-risking the project the share price sits at three year lows and appears to be reversing higher.  Look for the downtrend to be broken to the upside and the 200 day moving average to be regained.

Listen to my new exclusive interview with Uranerz CEO Glenn Catchpole as we discuss the current Wyoming financial support and how construction is progressing by clicking here...

Disclosure: Author and Interviewer Owns Uranerz and the company is a sponsor on his website.


Sign up for my free newsletter by clicking here… 

Sign up for my premium service to see further interviews and reports by clicking here…

Please see my disclaimer and full list of sponsor companies by clicking here…

Accredited investors looking for relevant news click here…

Please forward this article to a friend.  To send feedback or to contact me click here...

Listen to other interviews with movers and shakers in the mining industry below...

Listen to internet radio with goldstocktrades on BlogTalkRadio


No Comments Yet.

Leave a comment

You must be Logged in to post a comment.