Uranium Demand Outstrips Supply $AEFI, $CCJ, $URRE, $NEM, $ABX, $BHP

Encompass Fund Founders Malcolm Gissen and Marshall Berol see the demand for uranium continuing to increase in the coming years, meaning an increase in uranium prices. As more nuclear power plants come online around the world, the need for more uranium will increase. In this exclusive interview with The Energy Report, Malcolm and Marshall talk about the uranium companies they think provide good opportunities for investors, as well as opportunities in other energy sectors.

The Energy Report: First of all, congratulations on the Encompass Fund’s returns of 137% last year. Morningstar ranked your Fund very highly in 2009.

Marshall Berol: In their database of over 16,000 funds, Encompass Fund was number five for 2009 and we were number one in the World Stock Fund category.

Malcolm Gissen: For the three-year period, the Encompass Fund ranked in the top 1% in the World Stock Fund category. The fund is about three-and-a-half years old.

TER: What did you see in the investment landscape last year that others apparently missed?

MG: I think it’s a combination of things. We continued to emphasize resource companies and some healthcare companies, the sectors that we felt would perform well. The companies that we liked in those sectors did even better than the sector as a whole. For example, last year gold was up 24%. The gold companies that we liked, and also the silver companies for that matter, mostly doubled and tripled in value in 2009.

Early in 2009, Marshall and I discussed the fact that a number of these resource companies had been battered in 2008. We felt that they were performing well. They should not have declined in 2008 and they offered an even better opportunity. We had the courage of our convictions to add to our positions and to initiate new positions in some companies in these sectors. Our investors were well rewarded for our doing that.

TER: What do you think the difference was between 2008 and 2009?

MG: In 2008, a lot of hedge funds and other institutional investors had made money, as we had in prior years, by investing in resource companies, especially in the junior mining companies. We were pretty heavily invested in those areas in 2008. When the hedge funds and other institutional investors experienced significant redemptions and had to come up with cash to pay their outgoing investors, the first thing they sold tended to be the companies in which they had large gains. In many cases it was the resource companies that were sold.

In the case of the junior mining companies, those companies’ stocks are thinly traded. So when these institutional vendors started simply dumping billions of shares of a thinly traded stock in the market, a lot of the junior mining companies fell 50% to 95% in value during the second half of 2008. Marshall and I started calling these companies saying, “We don’t understand. You just discovered 5 million more ounces of gold and your stock is down 15% or 20% in two days. This makes no sense.”

The companies told us they didn’t know what was going on, but somebody was clearly selling a lot of shares. It wasn’t until about October that these companies were in the East visiting with a number of the East Coast hedge funds, and learned that many institutions had simply dumped their stock in the marketplace. That had a very negative impact on these junior mining companies. It certainly hurt the Encompass Fund.

MB: At that time, it was not only the redemptions that the hedge funds were getting. The hedge funds were getting margin calls. Individual investors were getting margin calls. Individual investors and the professional investors were very nervous. They were shell shocked as the second half of 2008 and the beginning of 2009 wore on. There was tremendous amount of liquidation.

One of the larger gold companies such as a Newmont Mining Corp. (NYSE:NEM) or a Barrick (ABX) could absorb these liquidations and not decline that much. However, the junior companies could not and they declined precipitously, as Malcolm has said. They went down 50% to 90%. That really hurt the Encompass Fund’s performance in 2008, the only year in which the Fund suffered negative performance.

We went back and looked through the portfolio. We went through the companies we owned and assessed what the attributes were, pro and con, of those companies. We looked at their finances, their management, and their projects. Then we decided to eliminate a few of the companies that we felt weren’t as strong, weren’t as solid. We added to existing positions in companies that we felt were solid and the prices were mismatched to what the company represented. Then when the markets started to recover in March of 2009, a number of these companies went on to perform spectacularly for the balance of 2009 and into 2010. That’s certainly contributes to the excellent performance of the fund, and what we think will continue to contribute to a positive performance going forward. Of course as we all know, and as the SEC requires us to say, past performance is no guarantee of future results.

Having said that, it is important to look at where a company has been and is and to try and determine where you think it’s going to go as a company and as a stock investment in the future.

TER: Malcolm, you had an interview with TheStreet.com last year and you were quoted as saying, “Uranium is supposed to be the hottest commodity.” It’s about six months from when you made that comment. Uranium has gone down. Where do you expect it to return to, do you expect it to return to being a hot commodity?

MG: I don’t like the concept of the “hot commodity” because that’s not how we invest. The demand for uranium currently outstrips supply, in terms of the amount of uranium that is mined and the demand for it. I think the imbalance will continue. In fact, our analysis projects that this supply/demand imbalance will become more severe because there are several dozen nuclear power plants either being constructed or in the planning stage right now. Over the next five years, a number of them will come online, and they will start to demand uranium. The sources of uranium around the world are not ample. So there’s going to be a need for more uranium within the next five years. Where you have an imbalance between supply and demand and the supply is not meeting demand, we know that prices will rise. So I believe that within the next few years we’re going to see considerably higher uranium prices.

MB: It has been the largest individual position in the fund for some time. It’s an example of where the equities don’t necessarily track the commodity price on the upside or the downside.

We feel that over the longer term, the stocks of the junior companies in particular will give you more advantageous exposure to those industries and those commodities than investing in the commodity itself.

MG: Investors are looking ahead and realizing that this company has a very bright future. They’re expanding their resource. They’re getting into production. They have terrific management. They have a good number of very experienced people who have gotten other uranium mines into production and they’re well positioned. They have other resources besides the Texas resources. People are looking for what’s likely to happen to UEC over the next few years.

MB: They also made a very advantageous acquisition in the second half of 2009. It provided them a fully permitted plant that’s ready to operate, as well as additional projects. The market has recognized that and the stock price has gone up.

TER: From an investment standpoint, how do you compare major uranium companies such as Cameco Corp. (CCJ) and BHP Billiton Ltd. (BHP) to the junior producers or explorers?

MG: Well, with the juniors, and particularly with the exploration companies, there’s a lot more risk. You don’t know whether the exploration will be successful. You don’t know when they’re going to get into production. You don’t know if they’re capable of raising the funds they need to continue exploring or to get into production. With a Cameco, it is producing and is in fact the world’s largest producer of uranium with the world’s largest uranium mine. They have very nice facilities. They’ve run into problems, of course. You get a sense of comfort in knowing that the company is already in production and realizing significant cash flow, they have very experienced management, and they are the dominant company in this industry.

TER: Is there more upside potential to the junior companies?

MB: From a price appreciation standpoint, yes. It’s that way regardless of whether you’re looking at uranium, gold, silver, copper, moly or whatever. There is more potential reward in a junior company. There is more risk in a junior company. If you look back at a Cameco and what it has done pricewise over the last year, or two or three years, versus a Uranium Energy Corp., or another midsize or smaller company, I’m reasonably confident that most of these smaller companies have outperformed. It would be the same in gold with Exeter Resource Corp. (XRA), which is not in production and won’t be for some period of time; versus a Barrick or a Newmont or a Kinross Gold Corp. (KGC). It’s the same thing with a Freeport McMoRan Copper & Gold Inc. (NYSE:FCX), which is in copper and gold versus a junior gold company or a junior copper company.

Like with the pharmaceutical industry, a major drug company such as a Merck (NYSE:MRK) or a Lilly (NYSE:LLY) or a Pfizer (NYSE:PFE) is not going to have the stock price movement that a smaller research and development biotech company has on the upside, nor would they go down as much. That’s where the reward is with a junior company and is the reason why we generally prefer investing in junior companies, rather than larger mining companies.

MB: There are. We’re invested in a company that is involved in both uranium and gold. That’s Fronteer Development Group Inc. (FRG) which has some significant gold projects. They’re exploring and drilling in Nevada. Also, it has a very significant uranium deposit in Labrador. There is activity going on in the uranium component of the company but it’s been somewhat slowed down because the local government declared a moratorium on mining going into production. They have not declared a moratorium on drilling and exploration. So Fronteer has continued with that, but for a while, it certainly had a negative effect on the company’s stock.

A company that we have been in before, but we’re not currently in, is Paladin Energy Ltd. (PALAF.PK), which is in production of uranium in Namibia and soon in Malawi in Africa. We continue to review the company and its progress. It’s had some operational difficulties and we haven’t gotten comfortable enough to reinvest in it, but it’s a uranium producer that we certainly are keeping an eye on.

BHP is an excellent company. We do not own it in the fund. We do own it in individual client accounts. BHP is a very broad-based commodities company. They produce a wide variety of commodities that they mine worldwide, not the least of which is uranium.

TER: Marshall, I know that you’ve looked at alternative energy opportunities, but as of last year you felt that the sector was still some distance away. What’s your perspective now on that?

MB: Our general perspective is that it hasn’t changed in that context. From an investment standpoint, there are certainly companies that are making progress in expanding their operations in alternative energy, primarily solar and wind.

In the fund, we have a small position in a Chinese company, JA Solar Holdings Co., Ltd. (NASDAQ:JASO), which manufactures components for solar systems. But it’s a difficult space because of the amount of competition. As production manufacturing has increased, prices have come down due to competition, and it’s been difficult for the companies to make a good amount of profits. We continue to look at the solar industry and various aspects of the solar industry, but it’s just not a compelling investment situation for us.

It’s the same with wind energy. There are some companies that are involved in the manufacture of wind turbines or the operation of them. For the most part they’re smaller companies. If they’re not smaller companies it’s just a small part of a large company such as General Electric (NYSE:GE). You have a whole set of other factors involved as to whether you want to be invested there or not. We continue to look at it.

We look at geothermal, which is an interesting industry and interesting business. There are a number of companies involved in it. However, it has been difficult technologically, and from a capital structure standpoint to develop some of these companies, and to have the confidence in them that we like to have before investing in them. But we certainly continue to look at them.

Hydroelectric is not so much thought of as alternative energy, but it certainly is. The Encompass Fund is invested in Calpine Corp. (NYSE:CPN), which is primarily known for producing electricity with natural gas. It is also the largest hydroelectric producer in the United States with the Geysers Project in Sonoma County, California and some other projects. Again there is not a lot of opportunity on a standalone basis to invest in hydroelectric operations.

TER: How about in the conventional energy space?

MB: We continue to be positive on coal exploration and production. We own several companies in the Encompass Fund that are involved in coal. Peabody Energy Corp. (NYSE:BTU), a very large, well-known company, is in the fund.

The fund also has investments in three smaller companies, each of which have some unique characteristics. One is L&L Energy (NASDAQ:LLEN). It’s a U.S. company that has acquired coal mining and processing and washing operations in China. L&L has been doing acquisitions and consolidations, and has grown extremely successfully, from a company standpoint and from a stock results standpoint. The stock has had a substantial increase in price over the past year and has produced a five-times return for the Encompass Fund in 10 months. We’re not necessarily convinced that now is the time to be investing in it, but on the other hand we haven’t sold any shares. It has a very good business plan of acquiring newer coal companies in China and consolidating them. They’re bringing western safety and western environmental practices and procedures to the coal industry in China and it’s working very well.

Another substantial position in the Encompass Fund is SouthGobi Energy Resources Ltd. (SGQRF.PK). SouthGobi is a Canadian company that is operating in Mongolia. It is currently mining coal in Mongolia, 20 miles from the Chinese border. It is operating 24/7. It loads trucks around the clock at the mine, trucking the coal 20 miles to a railhead on the Chinese border. The coal is then utilized by Chinese companies. SouthGobi has done very well. It continues to do well. It received a major investment earlier this year by one of the Chinese sovereign wealth funds. It’s a company that has done very well and we believe will continue to do very well.

A fourth company that the fund owns in the coal industry is Western Coal Corp., which is a company that’s operating coal mines in Canada. So we think there continues to be a major future for coal. It certainly has environmental issues. It has safety issues, as unfortunately we’ve seen both in China and the United States recently. Chinese electricity production is 70% coal-generated. U.S. electricity production is 50% coal-generated. We don’t see any significant change in that for a good long period of time to come. Coal is going to be used and needed.

TER: Marshall, in our last interview, you pointed out that natural gas was way off its high of $15, and out of line with the historic relationship between natural gas and oil pricing. You felt it was undervalued at that point, and noted that “very few people have much good to say about natural gas and that causes us to look closer at that kind of situation.” Have you found any natural gas investment opportunities after further scrutiny?

MB: I would say that those comments that you quoted are still the case, probably each of those in spades. The spread between oil, let’s say at $85 a barrel, and gas say at $4 per MCF is over 20-to-1. Energy content of a barrel or oil and an mcf of natural gas is a six-to-one ratio. Historically it’s been maybe a 10-to-1 ratio from a stock market standpoint and it’s currently 20-to-1. Currently there are probably even fewer people that have anything positive to say about natural gas than was the case when we last spoke. This creates opportunities, but we have been very cautious about taking advantage of any of them because we just haven’t seen any indication that gas prices have hit a bottom.

As value investors, which we are at heart, we’re also contrarians. But it’s often said that value investors can be too early and that is the case. We continue to have discussions among ourselves here in the firm as to whether it’s timely or not. The bottom line conclusion we come to is it’s still too early. We don’t know when that will change. We’re confident that it will change. We just don’t know what the timing is. Natural gas is in oversupply. The technology that has led to horizontal drilling has led to the development of shale properties and an increased production of natural gas. Natural gas production has far exceeded what the analysts or the companies expected. It’s far exceeded the demand and therefore natural gas prices are extremely low. It’s still early, in our view, to be investing in natural gas situations.

Having said that, ExxonMobil (NYSE:XOM) and others are investing in natural gas situations by virtue of buying companies or buying into some of the large natural gas producers in this country. They feel it’s timely. Whether it’s timely or not we’ll be seeing over the coming months and years.

TER: Marshall and Malcolm, you have been very generous with your time today and we really appreciate it.

Malcolm Gissen founded Malcolm H. Gissen & Associates Inc., an investment advisory services firm, in 1985. He has been an investment advisor since 1985 and has managed separate accounts since 1999. Mr. Gissen’s management experience has focused primarily on investments in publicly traded companies, including real estate investment trusts. Mr. Gissen received a B.S. degree from Case Western Reserve University and a J.D. degree from the University of Wisconsin. Marshall Berol has been engaged since 1982 as an investment manager in San Francisco, CA. Since 2000, he has been the Chief Investment Officer of Malcolm H. Gissen & Associates, Inc. In addition, for more than 15 years, Mr. Berol has owned his own investment firm, BL/SH Financial. Mr. Berol’s investment management experience has focused primarily on investments in publicly traded companies. Mr. Berol did his undergraduate work at the University of California (Berkeley) and received a J.D. degree from the University of San Francisco School of Law. He was in the private practice of law in San Francisco before entering investment management.

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Industry Watch: Al Korelin talks Uranium with Marina Trasolini #uranium $AEFI

Interesting forecasts of uranium prices and demand. Nationally syndicated radio show personality Al Korelin from the Korelin Economics Report hosts Industry Watch. For Thursday May 13th 2010, Al discusses Uranium with Marina Trasolini of Resource Opportunities.

With uranium prices on the rebound as demand increases exploration and production companies are getting in focus for the investors and institutions. Please follow us on Twitter: http://www.twitter.com/aefinc and visit us on the web at http://www.americanenergyfields.com.

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American Energy Fields, Inc. Appoints Nobel Peace Prize Recipient Dr. Karen Wenrich To The Advisory Board #uranium $AEFI

American Energy Fields, Inc. Appoints Nobel Peace Prize Recipient Dr. Karen Wenrich To The Advisory Board

May 18, 2010

Phoenix, Arizona; American Energy Fields, Inc. (OTCBB: AEFI; the “Company”), is pleased to announce it has appointed Dr. Karen Wenrich to the Advisory Board to oversee the development of its Arizona uranium exploration projects.

One of the most well respected uranium geologists in the United States, Dr. Wenrich brings to American Energy Fields an unparalleled 40 years of expertise in uranium exploration in Arizona and the Southwest U.S. The highlight of her career came in 2005 when she was the recipient of a shared Nobel Peace Prize for her work with the International Atomic Energy Agency (IAEA). While with the IAEA she formulated, prepared, and implemented IAEA activities in the area of “uranium production cycle and the environment” for the front end of the nuclear fuel cycle, including uranium resources, supply and demand, resource evaluation, and technical, environmental, regulatory, safety, and economic aspects of uranium exploration, development, and mine closure.

Dr. Wenrich has authored over 145 publications focused on uranium, geology, and environmental matters including receiving an honorable mention for the Best Paper Award for her essay entitled, “Uranium in Arizona” published in the Arizona Geological Society Digest. Since 1997, she has worked as a consultant in the uranium industry offering her expertise in prospect generation, 43-101 preparation, electron micro-probing, reflected and transmitted light petrography, and X-ray diffraction analyses. During this time, she consulted for Newmont Exploration, Ivanhoe Myanmar, Monarch Resources, and many others.

Dr, Wenrich also spent 23 years working as a research geologist for the U.S. Geological Survey where she studied uranium based ore deposits in Arizona, the Great Basin, New Mexico, Colorado, Mexico, China, and Australia.

President Joshua Bleak said of the appointment, “Adding Dr. Wenrich to the Advisory Board is another step in establishing American Energy Fields as a top exploration and development company focused on the uranium sector. Dr. Wenrich has a wealth of experience including winning a Nobel Peace Prize for her work on atomic energy. She has had numerous articles published in the field of uranium and is an absolute authority when it comes to uranium exploration in the Southwest U.S. We are truly honored to have her join our team as she builds upon the credibility we are establishing as a young company.”

About American Energy Fields, Inc.

American Energy Fields (AEFI) is a resource company focused on exploring and developing the alternative energy resources of the United States. American Energy Fields’ corporate strength lies in its management’s experience in the finance and natural resource sectors. AEFI has one of the most prolific mining databases for energy related projects within the United States. With this database, AEFI will continue to target and acquire projects with previous production and/or exploration and work towards fully developing those projects to drive revenues and build core reserves.

For further information please contact:

Corporate Office
3266 W Galveston Dr. Suite 107
Apache Junction, AZ 85220
480-288-6530

www.americanenergyfields.com

Investor Relations
Office: 949-481-5396

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The Fuel Of The Future… The Fuel Of Now #uranium

Uranium is still a niche fuel, but it’s an extraordinarily important one. As of Feb. 1, 2010, the metal, which is crucial for the generation of nuclear power, was used in 436 nuclear reactors in 32 countries around the world, according to the World Nuclear Association (WNA). Those nuclear reactors are responsible for 15 percent of the world’s electrical power generation, generating 2,601 billion kWh. And that number is only growing: Currently, 53 reactors are in construction, 142 are on order or planned and 327 are in the proposal stage. Even in the U.S., support for nuclear power is at an all-time high, according to a recent poll by Gallup.

How can you get involved and take advantage of this growth? There are any number of established uranium related stocks such as CCJ and URRE as well as there are some emerging growth companies worth looking as such as American Energy Fields, Inc. which is traded on the NASDAQ OTCBB under the symbols AEFI. You can also check out the website: http://www.americanenergyfields.com

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This Precious Commodity Is About to “Go Vertical” #uranium

The pandemic shortage has just broken through 60 million pounds, shattering record highs… Now it’s about to rocket faster than any commodity in modern history…Here’s how to safely use this intelligence to make 2,689% starting next Tuesday…

You’d have to go back 63 years to see a world as starved for commodities as it is today…
China, India, Brazil, Mexico – even the U.S. and Japan – are outstripping reserves as fast as they can be produced. And the global bonanza is getting more intense by the day…
In just over two years alone, copper’s shot up 159%… Aluminum is up over 75%… Zinc has popped 302%… Nickel’s jumped 206%… Oil’s climbed 111%.

Even lead has spiked 211% in the past 12 months, as China devours every available ounce to feed its ravenous factories…

Yet right now, one commodity is about to climb faster, longer and steeper than any of these. It’s a commodity that’s starting a breakout that could quadruple in price in the short run, driving it up another 426%. And handing investors an opportunity to multiply their money by 25 times or more…

You see, right now every industrialized country on the planet is scrambling to get its hands on this one precious commodity.

Demand, as you’ll see, is unparalleled in history…

And yet there’s little supply to go around…

A recent report from the Asia Pacific Foundation of Canada forecasted a 45,000 metric ton shortage in the near future that could wipe out 16% of the world’s power for over six months…

In the past 12 months alone, the supply of this precious has already fallen short by 60 million pounds. And production is limited for years to come. The world’s leading energy association estimates that it takes eight years for new mining and production of this fuel to get “online” and ready for power plants across the globe.

To put it bluntly, investors who understand the size and scope of this situation are about to be rewarded handsomely – and soon…

That’s because this fuel is in such demand – and is so powerful – that it’s about to do what oil did for 127 profit-filled years – power global growth for the coming era.
After all, oil fueled the Industrial Revolution, two world wars, the age of automobiles, the age of consumer goods and global transportation. It even created the modern middle class…

In the last three generations alone, oil turned every $1,000 invested into $1.26 million.
And now this one fuel is about to do the same thing…

It’s coming with such force that even Big Oil has quit investing in – of all things – oil.

Fact is, this boom is gaining such force and inevitability, that there’s little that can stop it.

You see, the fuel I’m talking about is the one used to power electric plants worldwide. It’s not oil or natural gas, it’s uranium. Investors who understand the supply-gap of this fuel are about to be in for quite a ride.The reasons are simple… China alone is adding 30 new nuclear power plants… BusinessWeek calls it the “largest buildout” in the history of energy.

This uranium news and developments blog (http://www.americanenergyfields.wordpress.com) will show you how to capitalize on this situation and get a stake in this runup now, long before the investment banks and hoards of “retail” investors start pouring their bankrolls back into commodities – and pushing the price up even faster…

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Is Uranium the clever ‘green’ investment? $CCJ

Three Mile Island. Chernobyl. Montgomery Burns. Nothing good, you might well argue, ever comes of nuclear power.
 
But the world is currently facing a bit of a dilemma; either we start splitting some serious atoms, or the lights go out. 
 
One city-based uranium trader, who declined to be named, says the need for nuclear is clear. “Wind and solar – you’re in cloud cuckoo land if you think that’s the answer. You need baseload power, and the carbon issue means it’s going to be nuclear.”
 
Now everyone, from Homer Simpson’s boss to Barack Obama, is supporting nuclear. It’s ironic for anyone who grew up in the 1980s with Greenham Common, posh-boy agitprop and Michael Foot’s famous duffel coat that we should ever be looking at large lumps of uranium with a warm, fuzzy glow in our hearts. 
 
The warm, fuzzy glow was always supposed to be a side effect of this metal at the crazy end of the periodic table. 
 
But the simple maths is this: making electricity with advanced nuclear technology costs around $16 per megawatt hour. Clean coal is $23; clean gas is $55. 
 
And when even the US stands up and says it’s time to look at the nuclear option for real safety of sustainable supply, we should all take note. Especially investors. Uranium oxide. U3O8. Yellowcake: the new green fuel. 
 
Currently, there are 45 nuclear reactors being built. According to industry analysts UxC, there are plans for more than 400 new nuclear power stations currently announced – roughly the same as those currently in use. 
 
From Algeria to Vietnam, the race to get low-carbon, dependable power is taking shape. 
 
By 2015, industry forecasts show uranium demand again exceeding supply as new nuclear comes online and existing mines are depleted. It’s a great time to be a nuclear power station builder, or indeed a uranium miner or refiner. 
 
It’s unlikely you or I will be able to take a night course and start our own nuclear plant construction company, so the natural thing to do is look at where the investment angle lies.
 
Like most commodities, the demand and supply is easy to understand – utilities need it, and burn it up in their power plants; roughly 200lbs of uranium oxide per gigawatt equivalent of electricity, but the initial load is roughly triple that. 
 
Miners find it, processors refine it, specialist companies store it. Like oil, gaining a permit, and extracting first product can take a decade. 
 
Unlike oil, from extracting the raw material to production of a fuel rod can take 18 months. Worse, spot prices at $40/lb make marginal mines plain unfeasible; if they close, and then demand picks up, prices will spike. 
 
That pushed prices to $130 in 2007. Another issue is that of concentration; lots of places have uranium, from Canada to western US, eastern Europe, and sub-Sahara, but 40% of reserves are in Australia. That said, Kazakhstan increased production by 58% last year to become the number one producer.
 
When a new mine like Cameco Corp’s Cigar Lake in Canada springs a massive leak, which it did in 2006 and again in 2008, then 10% of the world’s future supply is put on hold. 
 
Imagine one oil field pumping 10 times what Prudhoe Bay does, and you have an equivalent. Cameco, listed in New York and Toronto only recently updated on repair works. Industry experts suspect full production won’t start until 2013, but Cameco is expected to provide further guidance at the end of February.
 
However, Cameco has several producing mines, accounts for 15% of global production, a market value of $11 billion, and has 500 million pounds of proven and probable uranium reserves – not to mention its gold and electricity businesses. 
 
The stock returned 62% gains in the past year, but is $5 off its 52-week high seen in January, and trades on 21.5x forward earnings.
 
Toro Energy, listed in Sydney, is poised for better fortunes after a change of government in Western Australia allowed it to acquire leases there, it has producing mines in Oz and Africa, and the shares trade at 12 cents to give it a cap of A$110 million. Uranium One is also worth a look – the Toronto-based explorer just announced a 400% rise in Kazakh reserves, to a healthy £47.8 million.
 
A more direct way to play the nuclear story is in Uranium Participation Corp. It buys and holds uranium, its stock tracks the spot price, and the company holds just north of C$600 million worth of product; investors track the net asset value, which is reflected in the share price. If uranium prices rise, so does the share price – simple. 
 
One final idea is a bit broader. There are a couple of ETFs that track global nuclear indices, so giving you exposure to miners, refiners, technology and utilities. 
 
First is the iShares S&P Global, listed in New York, which has an asset value of $14 million and a TER of 0.48. Cameco is its top holding. Also there’s the World Nuclear Association Global Index run by ETF Securities, which is more diversified with 65 holdings and a higher TER of 0.65%.

NB: CFDs and Spread betting carry a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for all investors. Ensure you fully understand the risks involved and seek independent advice if necessary.

In addition US-based American Energy Fields (AEFI) is a rapidly emerging uranium exploration firm with strategic property holdings in the southwestern United States.

 In just the last few weeks, the company has:

 ·        Acquired two uranium properties in California where exploration records indicate a combined potential of up to 7.5 million pounds of U3O8

 ·        Acquired the Artillery Peak uranium property in Arizona – estimated to contain 1.7 million pounds of uranium

 ·        Submitted an offer to Concentric Energy to purchase the Anderson Uranium Mine in Yavapai County, Arizona 

The United States holds the 4th largest uranium reserves in the world according to the US Geological Survey. At just $30 per pound U3O8, America’s uranium reserves are estimated to be 265 million pounds. That estimate jumps to an astounding 890 million pounds at $50 per pound U3O8. We see American Energy Fields as well positioned to capitalize on the current strength in the uranium sector at current U3O8 prices of approximately $41.50 per pound.

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New Energy Policies For American ($AEFI) Uranium Development

As $AEFI comes to makert a radical energy bill is on the table in the USA including stronger support for new nuclear generation and moves for a reprocessing research centre.

 The 987-page Clean Energy Jobs and American Power Act, introduced to the Senate by John Kerry and Joe Lieberman on 12 May, leads with issues of nuclear power under the heading Encouraging Domestic Nuclear Power Generation. It is the most significant update to policy since the Energy Policy Act of 2005 which specified support for nuclear that has yet to really materialise. 

 After the section on nuclear come passages on a national strategy for carbon capture and sequestration, renewable energy and efficiency, cleaner transportation including electric vehicles and a set of overall goals for emission reduction.

 Under the bill, “global warming pollution” would be reduced to 95.25% of 2005 levels by 2013, to 83% by 2020, 58% by 2030 and 17% by 2050. The method for this would be cap-and-trade, under allowances set by the Environmental Protection Agency.

Most immediately for nuclear, the bill echoes a request already made by President Barack Obama to boost the scope of loan guarantees for nuclear development to $54 billion. This is a big improvement on the current limit of $18.5 billion, which is only enough to aid finance for two or three projects.

 It calls for the Nuclear Regulatory Commission (NRC) to “implement an expedited procedure” for more straight-forward applications to build – those with approved reactor designs, concerning sites with an Early Site Permit, or that come complete and with demonstrated financial backing. The NRC would have to suggest ways it could accelerate its processes within 90 days if the bill was passed. Within a year the commission would have to outline a way to “develop technology-neutral” guidelines for nuclear licensing “which will allow for a more seamless entry of new technologies into the marketplace.”

 And for the construction phase, insurance against the risk of regulatory delays is to be boosted from the first six new reactors to the first 12 with a maximum payout of $500 million.

Small reactors

 The bill contains language to help bring in a new era of small reactors: “Not later than 180 days after the date of enactment of this paragraph, the secretary [of energy] shall develop and publish on the website of the Department of Energy a schedule that contains an outline of a five-year strategy to lower effectively the costs of nuclear reactors.” A sum of $50 million is authorized in the bill for this program which includes research on “modular and small-scale reactors.”

Commitment to Excellence

 Within one year, one of the USA’s national laboratories would have to be designated a “spent fuel recycling research and development centre of excellence to serve as the lead site for continuing research and development of advanced nuclear fuel cycles and separation technologies.”

 This would be a major step in US policy away from President Jimmy Carter’s 1977 proliferation-inspired policy to never again separate plutonium. New methods could be developed where plutonium remains with fuel materials useless for nefarious bomb-makers. The USA’s entire management strategy for high-level waste and used nuclear fuel is under review in the wake of the decision to abandon the Yucca Mountain project.

Tax

 A range of tax changes are also included to encourage utilities to build and manufacturers to enter the nuclear supply chain. Among these are an investment tax credit for nuclear power facilities and the inclusion of nuclear plants as qualifying for ‘advanced energy project’ credit.

 For the supply chain, duty fees on certain nuclear components not available from US manufacturers will be suspended for ten years. 

Content Credit: http://tinyurl.com/2a8xond

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