Well I am still bullish on Uranium and Denison. The first big move in uranium is over - the next one is about to begin. And if uranium prices DOUBLE from here - which I think could easily happen -- some of these small-cap wonders I’m looking at could go to the moon.
I believe we’re poised to enter the “Second Wave” of uranium’s big bull market…probably the biggest bull market the world has ever seen.
Consider the Following:
Force #1: The Supply/Demand Gap
Consider these facts...
1. About 16% of the world's electricity came from 440 nuclear reactors last year, according to the World Nuclear Association. Currently, there are 28 reactors under construction around the world and another 62 being planned:
- Japan intends to add 11 by 2010
- China hopes to add as many as 30 by 2020. More on China in just a bit…
- India wants to build up to 20 more
- Russia’s energy goals call for at least 42 new nuclear reactors...perhaps as many as 58!
2. An additional 100 plants will be built in the next 10 years, with 40 of them in Asia.
3. Bottom line: By 2050, scientists estimate the world will need about 900 more nuclear power plants to keep up with growing energy requirements.
As a result, the undeniable reality is that demand for uranium is outstripping supply. In 2005...
• Supply from mines was 102.5 million pounds
• Demand was 171 million pounds
• The gap was 68.5 million pounds.
Totals for 2006 aren’t in yet, but demand probably topped 180 million pounds. And as new nuclear power plants come online, that demand will grow. A typical 1-gigawatt nuclear reactor requires around 200 metric tonnes of natural uranium per year. During startup, a new nuclear plant can use TRIPLE its normal requirements.
The fact is production from world uranium mines now supplies only 62% of the requirements of power utilities. The rest is made up from rapidly dwindling stockpiles, mainly old Russian nuclear warheads that are converted to material for power plants. That agreement expires in 2013, and won’t likely be renewed, since the Russians have a very ambitious nuclear program of their own.
Moreover, in the U.S., utility consumption of uranium outpaces U.S. uranium production by more than 20-to-1.
Force #2: Crisis in Production
Denison Mines Corp. (TSX:DML) announced Tuesday that the mid-sized uranium producer and its partners are postponing development of the Midwest uranium project in Saskatchewan. The company also plans to temporarily shut down its Tony M mine in Ticaboo, Utah, and cut capital spending.
Force #3: China, the Uranium-Devouring Monster
China deserves mention as a force all its own. How hungry is China for uranium? The Chinese are hot-footing it through the Australian outback with bags of cash, investing in the best small companies sitting on large quantities of uranium. And no wonder! China plans to import 2,500 metric tonnes of Australian uranium per year by 2020, as it builds 24-30 new atomic power plants.
The really bullish news is that China’s total expected annual uranium demand is three times as much - 7,500 metric tonnes. And it will use every pound of it, as China plans to construct two new 1,000-megawatt nuclear reactors every year, including two coming online this year.
In total, seven million pounds of uranium were traded in October alone, meaning 2008 is shaping up to be the busiest year for uranium trading in as decade, he added.
Force #4: Global Warming Trumps Everything
Fact: The 11 hottest global temperature years (since records began in 1861) have been since 1990.
Bottom Line
Buy Uranium Now or forever hold your peace and regret not buying
