Tuesday, May 3, 2011

Investors Guru Featured Stock News - Amex/TSX: URZ Uranerz Energy

Uranerz Energy Corporation Letter to Shareholders

CASPER, WYOMING -- Uranerz Energy Corporation (TSX:URZ)(NYSE Amex:URZ)(FRANKFURT:U9E) -

It is exciting to reflect on the corporate events that have unfolded over the past year and the first quarter of 2011. Uranerz Energy Corporation had a very successful 2010, during which several key milestones were achieved, and we are looking forward to continuing that success through 2011 to allow us to initiate construction on our first in-situ recovery ("ISR") uranium mine.

The highlights for 2010 and early 2011 include:
  • Acquiring extensive drill data including drill logs, drill hole maps and geologic cross sections and commencing a detailed assessment of these data on over 15,000 uranium exploration holes in the Powder River Basin area of Wyoming;
  • Significantly increasing our Powder River Basin uranium resource base by over 45% to 19.1 million pounds (in all categories), as U3O8;
  • Initiating the permit application process on our third in-situ recovery ("ISR") mining unit;
  • The adoption of a Shareholder Rights Plan designed to ensure that all of the Company's shareholders receive fair and equal treatment in situations where an unsolicited offer to acquire the Company is made;
  • Strengthening the Company's treasury to over $47 million through the completion of an ATM financing and the exercise of warrants; and
  • Achieving major advancements for the Nichols Ranch ISR Uranium Project with:
    • Receipt of the Permit to Mine from the Wyoming Department of Environmental Quality ("WDEQ");
    • Contracting for long lead time well-field installation equipment, processing plant equipment and project power;
    • Issuing requests-for-quotation for well-field development, plant construction, and equipment;
    • Receipt of the final Supplemental Environmental Impact Statement ("SEIS") by the Nuclear Regulatory Commission ("NRC"); and
    • Receipt of the draft Materials License from the NRC.
Last summer we acquired and commenced a detailed assessment of a large data library which includes over 15,000 drill logs, drill hole maps and geologic cross sections for nearly all of the Pumpkin Buttes Mining District in the Powder River Basin of Wyoming. These drill holes cover over 340 square miles and are expected to be very helpful in identifying prospective uranium targets while saving the Company a substantial amount of time and exploration expense. The library may also be used to target potential acquisitions within the Powder River Basin and to generate data for permitting and eventual production operations in favorably identified areas.

During 2010, Uranerz focused efforts on expanding its resource base and completed technical reports on three new project areas. With the addition of Reno Creek, Uranerz has reported uranium resources on seven of its projects under the guidelines of NI 43-101, and increased its uranium resource base by over 45% (in all categories). The Company currently has over 30 uranium projects at various stages of exploration and development in the Powder River Basin area of Wyoming.

The Company also commenced preparation of the environmental permit and license applications for its planned third ISR uranium mining unit in the central Powder River Basin of Wyoming. This unit, named Jane Dough, includes the Doughstick, South Doughstick and North Jane uranium properties. The Jane Dough permit area is adjacent to and immediately south of the Nichols Ranch permit area, and the Company intends to add the Jane Dough Unit as an amendment to the Nichols Ranch ISR Uranium Project license.

During 2010, the Company implemented a Shareholder Rights Plan to safeguard our shareholders' interests by discouraging undervalued or unfair takeovers of the Company. The Company wants to ensure that the future benefits of its ongoing initiatives are not denied to its shareholders by an opportunistic, undervalued acquisition of the Company. This Plan is designed to protect against such acquisitions so that shareholders can share in the full benefit of Uranerz' long-term potential.

Late in December 2010, the Company completed a $20 million financing, and caused the accelerated exercise of an outstanding series of warrants in February 2011. These funds significantly bolstered the Company's treasury which stood at over $47 million by the end of Q1, 2011. The funds will be used primarily for the development of commercial mining facilities at the Nichols Ranch ISR Uranium Project, further exploration on Powder River Basin properties, and working capital to hire new staff for construction, production and ongoing overhead.

Several imperative permitting milestones have been achieved during the past several months. In late December the State of Wyoming, Department of Environmental Quality ("WDEQ"), issued the commercial Permit to Mine (Permit Number 778) for the Company's Nichols Ranch ISR Uranium Project located in Johnson and Campbell counties in the Central Powder River Basin of Wyoming, U.S.A. In January 2011, the final Supplemental Environmental Impact Statement ('SEIS") for the Nichols Ranch ISR Uranium Project was posted on the Nuclear Regulatory Commission ("NRC") website and published in the Federal Register. In the SEIS, the NRC reported its conclusion that there were no major environmental impacts that would preclude licensing of the Nichols Ranch ISR Uranium Project.

The last authorization needed before on-site construction can commence is the final Materials License from the NRC. The NRC issued to the Company in draft form the Materials License Number SUA-1597 in late November 2010. Once the final Materials License is issued, the Company plans to commence development of its first ISR uranium mine in Wyoming. The Nichols Ranch project will serve as a platform to develop the Company's other Powder River Basin projects through the permit amendment provisions of the regulatory process.

The Company believes that, notwithstanding the effects of the March 2011 tsunami in Japan, the long term fundamentals for nuclear energy remain strong. The demand for uranium far exceeds mined supply, as climate change and environmental concerns continue garnering increased world attention, and nuclear is regarded as a safe, clean and sustainable energy source.

In closing, I would like to thank all our shareholders, financiers, and employees for their continued support and contribution towards building a successful uranium company. I particularly want to thank our field employees for performing their jobs in a safe and environmentally friendly manner. With this continued support I am confident that Uranerz will meet its objective of becoming an economic producer of uranium to be used for fuel utilized in nuclear power plants.


Glenn Catchpole, M.S., P.Eng., President and Chief Executive Officer

You are invited to attend the 2011 Annual Meeting of Stockholders of Uranerz Energy Corporation to be held in Casper, Wyoming, on Wednesday, June 15, 2011.

The Annual Report and Proxy Statement can be viewed at: http://www.uranerz.com/i/pdf/Uranerz_AR_2011_and_Proxy_Document.pdf.

Alternatively, please visit our web site at: www.uranerz.com.

Uranerz Energy Corporation
Manager of Investor Relations


Source: Marketwire Canada (May 3, 2011 - 9:03 AM EDT)

Sunday, May 1, 2011

Investors Guru Small Cap Stock Observer

(Amex/TSX: URZ) Uranerz Energy - The Fukushima Time Machine For Uranium Value Investors?

In last month's article titled "Uranium Stocks After Japan Quake, Deep Dip Within Long-Term Uptrend" we wrote about the Japan Crisis that resulted from a triple-threat record earthquake, tsunami and the Fukushima Daiichi nuclear accident. We also made observations about the sudden sell-off experienced in the uranium industry from the commodity price of U308 yellowcake itself, to major producers of uranium and especially the small-cap uranium stocks we follow.

Every investor remembers the trade that got away, that you wish you had a time machine to go back and do over. Those who missed last fall's uranium bull market might now be asking if Fukushima has really caused any fundamental value change in the uranium industry, or like a time machine did it just wind back prices to where they were 6-months ago?

This time last year, in some of our Guru Trader Videos we identified small-cap uranium and potash as potentially great short-term, near-term and long-term value. As it turns out, small-cap companies of both commodities were top performers in 2010. As a side-note, the contrarian in us has again identified two areas that for no-good reason remain ignored and at multi-year lows, as the next potential great value for 2011 - that being natural gas and diamonds.

We especially liked uranium last year within a clear energy oil uptrend that was developing. At that time oil was over $80 a barrel while uranium severely lagged, stuck around half the price at $40 a pound. This seemed a no-brainer for uranium to catch-up to oil at some point, considering their highs of 2007-2008 were only $10 apart at $147 for oil and $137 for uranium.

Until March 11, 2011, and the Japan Crisis, this seemed a great call as last fall uranium started shooting higher, to over $70 a pound this year. Several small-cap uranium stocks showed impressive gains from mid-October to mid-February of 100% to over 300%. The 6-month comparative chart we displayed demonstrated that our Featured Stock since December 22, 2010 (Amex/TSX: URZ) Uranerz Energy was the top performer within a top performing sector.

Just a few weeks before the Japan Crisis uranium stocks sold off significantly and retraced some of their recent gains, which is normal within any uptrend. Nothing goes straight up forever. But then the Fukushima nuclear accident happened and uranium stocks sold off again... hard.

Markets hate uncertainty and for many the reaction is simply to get out of the way for a while. After a major natural disaster like the Japan Crisis this sell-off can be especially swift and deep. However, that was 6-weeks ago and investors should now start asking whether Fukushima is an industry game changer - or are uranium's long-term supply and demand growth fundamentals still intact?

As our last article indicates, these events are most likely a deep dip within a long-term uptrend. While everyone from the public to the media, to governments and the uranium industry and investors are trying to assess the situation, it might be a good time to learn from history.

You have likely heard about Crisis Investing, Misery Investing, or less sensational terms such as The Effects of Natural Disasters on Long Run Growth. Basically they all point to the behaviour cycle of initial reactionary panic selling that is usually far overdone, followed by rational assessment of fundamental value versus current below value market prices, and then a return to higher prices based on normal valuations and forward looking growth expectations.

This type of investor behaviour cycle is well established and can be demonstrated for all types of disasters affecting all kinds of stocks, industries, commodities or entire stock markets. In other words, everyone says buy-low, sell-high, and don't follow the herd, but they usually do the opposite. Sophisticated money managers are as susceptible to this behaviour as the average individual investor.

The initial selling is usually driven by liquidity concerns. This may be to secure margin requirements, or to provide recovery capital as in the Japan Crisis situation. If the markets were truly the determiner of an investment's real value, then investors would never sell below intrinsic value.

However, during panic selling this has little to do with the investment's fundamental value. Normal value decisions are instinctively overcome by irrational fear of the unknown. Bottoms are usually found when calmer heads again prevail, rationally realizing there is an undervalued opportunity.

Consider the market meltdown from 2007 to early 2009 when the S&P sold off from over 1500 to below 700, but is now over 1300 again in just two years. It boggles the mind how some analysts tell us to buy at several times the price they were telling us to avoid or sell the same investment two years earlier.

This behaviour is also seen in the price of (NYSE: BP) British Petroleum after the Gulf of Mexico Oil Spill Crisis of 2010 which saw its shares trade from over $60 to under $30, and now one-year later back to over $46 again.

Hindsight is 20:20 you say, and we don't have a time machine... or do we?

Now that the Fukushima time machine has slashed the prices of uranium investments, what long-term fundamentals have really changed? It is true that everyone involved will be looking to improve nuclear energy safety and that is always a good thing. However the switch back to fossil fuels is still not an option any more than it was before the Japan Crisis.

Nuclear energy is still the greenest form of commercially available mass energy. It is still far safer than oil or coal that powers the vast majority of the world's energy needs. In short there is no turning back the clock on our current nuclear energy production as this current uranium demand remains.

The real question is about future uranium demand growth, and will uranium supplies keep up to meet this demand. For years there has been a supply shortfall that has only been met by harvesting uranium from old nuclear weapons. At some point this supply will be used up.

Future supplies are insufficient and should continue to drive long-term uranium prices higher. Prices may pause a while longer as markets continue to digest the current situation, but after irrational emotions subside and the rational facts are realized, not much will have changed.

Developing nations such as China, India, South Korea and Russia are signing long-term contracts with companies such as Cameco and Areva. But uranium production is not keeping up.

For example, in early February, (OTC: EGRAF) Energy Resources shutdown the Ranger Mine in Australia to prevent their tailings facility from flooding. (NYSE: CCJ) Cameco's Cigar Lake mine in Saskatchewan has been delayed a few times due to flooding. (CAC: CEI) Areva's Trekkopje mine in Namibia won't be online until 2013, a year later than previously anticipated.

On the other hand China now has only 13 reactors operating, but they have about 27 more in construction and another 50 planned to start construction over the next few years - plus another 110 proposed. India has 20 reactors operating, with 5 more under construction and 18 more starting construction soon - plus another 40 proposed, etc. etc.

Worldwide uranium demand is 152 million pounds yearly for the 440 reactors now operating. China only represents about 15 million pounds now, but alone will add another 50 million pounds of uranium demand on top of that. If all of the proposed reactors are built this will be much higher.

The Fukushima nuclear accident has been compared to the Chernobyl nuclear accident that happened 25-years ago this week. Some argue Chernobyl was a man-made accident that wouldn't happen today, while Fukushima was caused by a natural disaster that could happen anywhere.

I'm not an expert but I don't agree. First is the fact that Japan uncommonly sits on three major fault lines that are prone to earthquakes. Second, Fukushima is 40-years old and is based on even older technology. It seems that today's nuclear crisis could have been prevented or at least substantially lessened if current technology had been in place.

On Feb 28, 2011 TEPCO (OTC: TKECF) Tokyo Electric Power Company submitted a report to the Japanese Nuclear and Industrial Safety Agency admitting that the company had previously submitted fake inspection and repair reports. In 2008, the IAEA warned Japan that Fukushima was built using outdated safety guidelines, and could be a "serious problem" during a large earthquake.

My understanding is that after the earthquake and tsunami knocked out the primary power at Fukushima, it was the backup power to the cooling systems that didn't work that created the real nuclear crisis. If they had their coolant tanks overtop the reactors, similar to newer nuclear plant designs used in China, these gravity fed water tanks could have cooled the reactors for days without any power.

Also older nuclear power plants were individually constructed and fitted as originals piece-by-piece onsite, whereas newer Chinese designs are factory built precision modules that are assembled onsite with fewer parts subject to human or mechanical error. Many new safety enhancements are now standard.

The fundamentals that motivated last year's uranium bull market appears to remain intact - a matter of when, not if, uranium will soar again. As a result of the deep sell-off caused by the Fukushima time machine, perhaps uranium should again be part of the next potential great value for 2011.

Here are some points worth looking into:
  • Fossil fuels are expensive and dirty and nuclear power remains the safest, greenest and lowest cost form of mass-produced power available today and for the foreseeable future.
  • Older nuclear power plants should be evaluated and upgraded if needed, and if this had been the case at Fukushima would there even have been a Japan Nuclear Crisis?
  • It's obvious that today's and future nuclear power plants will be built using safer technology than was used decades ago. This is already in place.
  • Uranium fundamentals remain solid, with future shortages likely. Uranium demand has outstripped production for years, and extra supply from nuclear weapons is dwindling.
  • Regardless, the Fukushima time machine has slashed uranium prices to 6-month ago levels. Oil is back up to $114 a barrel but uranium is only about half, at $56 a pound.
  • (Amex/TSX: URZ) Uranerz Energy traded as high as $5.93 in February and is currently trading at about half, closing at $2.78 on Friday. URZ has $46 million in the treasury and awaits final permit approval to commence construction of their first ISR uranium mine at Nichols Ranch, Wyoming.

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