Wednesday, December 5, 2012

Shop Till You Drop (Off The Fiscal Cliff); Post Election Tidbits; Wyoming & Uranerz' $20M Golden Goose -

Shop Till You Drop (Off The Fiscal Cliff)

The fourth-quarter is live-or-die for many businesses, especially retail. And as we gobble turkey watching Black Friday, Cyber Monday and Boxing Day sales, with some football in-between hundreds of rugged truck TV ads, our other bipolar focus worries about whether the whole economy could really be headed off the fiscal cliff in a few weeks.

The stakes are extremely high, but for now the stock market seems content that a Hail Mary pass is in the works. I tend to agree; not so much because of clear election results that should finally sway the GOP that spending cuts AND revenue increases are needed, and not even because both sides will develop a last minute seasonal spirit to do the right thing - self-preservation fear gets deals done!

Money and future votes are more predictable motivators. The prospect of losing both will likely force both sides' hands to get out their lipstick and apply some kind of real-deal this time. The odds are low that everything will be solved, and high that some major issues will be kicked even further down the road. Still, just call this sarcastic political intuition, one almost certainty is that Wall Street will de-stink whatever is produced, to be heralded with a late Ho-Ho Rally - just in time for yearend bonuses!

Post Presidential Election Economic Tidbits

Now that you've regenerated from election exhaustion, here are a few interesting economic postscript items to tuck away for next time.

Our October 5th newsletter researched historic market return trends and investment timing around the four-year presidential election cycle and how stock markets predict winners and losers. This also dispelled the rumour that stock markets do better under Republicans.

We wrote, "This year being another presidential election year, we won't know Obama's second-half return until December 31. However, the S&P 500 was 1,143 on October 1, 2010 and if we apply today's 1,461, this works out to around +28%. Unless there's a crash this month (always a scary thing to say in October) then the stock market may be predicting an Obama win."

I had actually wondered if this historic predictor would hold up again this time. The article was written just two days after the first presidential debate as Romney gained the momentum and was surging in the polls, with the race virtually a dead heat.

That first debate seemed to ignite the polls mostly over how economic questions were handled. Why didn't the GOP keep milking the, "it's the economy stupid", trump card instead of regurgitating confusing sound bites about birth certificates and reflecting on empty chair conversations etc.

Democrats pointed to a lack of details and the math not adding up. Why didn't Republicans simply provide the following interesting economic tidbits that might have swayed more undecided voters? The Pollina / American Economic Development Institute annual business ranking survey shows that 9 out of the Top 10 Pro-Business States were Red States. The election in Virgina was a squeaker and almost resulted in a clean sweep for Red States.

2012 Top 10 Pro-Business Rankings
  1. Utah
  2. Virginia
  3. Wyoming
  4. North Dakota
  5. Indiana
  6. Nebraska
  7. South Dakota
  8. Kansas
  9. Missouri
  10. Oklahoma

It's also interesting that the greatest three-year ranking increases happened in four Red States:
  • Indiana +18
  • Arkansas +17
  • Kentucky +16
  • Alaska +11

And that the greatest three-year ranking drops happened in three Blue States:
  • Connecticut -21
  • Nevada -13
  • Illinois -12

The prestigious annual study of job retention and creation measures a state's economic development prowess. It is considered to be one of the most comprehensive and unbiased of its type for evaluating and ranking states based on 32 factors controlled by state government, including taxes, human resources, education, right-to-work legislation, energy costs, infrastructure spending, workers compensation laws, economic incentive programs and state economic development efforts. Two new factors - state budget deficit and state property tax index - along with a comprehensive State Report Card were added to this year's study. More:

Wyoming Ranks 3rd In Pro-Business States

I came across the above report when researching new information about one of our featured stocks Uranerz Energy (AMEX: URZ)(TSX: URZ)(FF: U9E). Uranerz has 30+ uranium projects to explore in the Powder River Basin of Wyoming, with 19+ million pounds of U3O8 reported so far. URZ is also developing its first ISR uranium mine, expected to commence production next year.

From the report, some of Wyoming's pro-business highlights:
  • Consistent winner in economic development, Top 10 State ranking since study started in 2004
  • Right-to-Work state with an excellent corporate tax structure
  • Low unemployment rate, and no state budget deficit
  • Very excellent High-School Completion rate as well as High Teacher Compensation

Wyoming also recently claimed the ranking of Best Business Tax Climate (Business Facilities Magazine, 2012), and the number 5 spot in the U.S. Chamber of Commerce 2012 Top 10 Next Boom States ranking. More:

When evaluating mining investments we need to understand the implications of where a resource is, almost as much as how much of it there is. I have seen certain mining stocks lose virtually all of their value overnight over risky geopolitical changes, and one of the key reasons why we have followed Uranerz since late 2010 is because they are set to become America's next uranium producer, located in the safe PRB mining district of Wyoming - the state's first new uranium mine in 20-years.

Discovering new economic resources in an established North American mining jurisdiction is getting scarce. As Earth's resources deplete, miners now have to look farther into the world's jungles, mountains, deserts and oceans. In addition to the usual exploration risks of not finding anything, investors have to consider extra costs relating to complicated mining terrains, extreme climates, sparse infrastructure and remote transportation. You might even have to worry about dangers from personal safety to government stability, corruption or law changes, to even how to repatriate profits.

Uranerz is fortunate that their uranium projects are located in Wyoming. The company has been able to focus all of its energy on exploration, and development of its first mine. Permit approval timelines, financings and other URZ milestones have been reasonably predictable. The point is that I probably wouldn't go to Wyoming as an exotic place to vacation, but when looking for strategic mining stocks that avoid the extraneous risks mentioned before - Wyoming is one of the sexiest places to invest!

Uranerz Energy's $20 Million Golden Goose

Uranerz has just discovered another huge bonus of doing business from Wyoming!

The company's November 8th news release details their Q3 financial results. I usually jump to the Cash and Working Capital lines first, showing over $11M as of September 30, 2012. Then I go back to read URZ' recent accomplishments including:

"Subsequent to the third quarter end, the Company received its Class I Underground Injection Control (deep disposal well) permit from the Wyoming Department of Environmental Quality for the Nichols Ranch ISR Uranium Project located in the Powder River Basin of Wyoming, U.S.A. The Company now has all of the regulatory permits and licenses needed to construct and operate an ISR uranium mine in Wyoming. Construction of the Nichols Ranch ISR Mine is nearing completion and uranium production is targeted to commence in 2013."

Then I noticed this:

"On November 6, 2012, the Wyoming Business Council recommended approval of the Company's application for a $20 million loan under the State of Wyoming's Industrial Development Bond financing program. The loan will be repayable over seven years and bear interest at a rate of 4.25%. Final approval for the loan is subject to the completion of due diligence and satisfaction of various other State approvals."

The mission of the Business Council is to facilitate the economic growth of Wyoming. The Business Council, a state government agency, concentrates its efforts on providing assistance for existing Wyoming companies and start-ups, helping communities meet their development and diversification needs, and recruiting new firms and industries targeted to complement the state's assets.

A November 15, 2012, update on the WBC's website now shows: "The board approved an application from Uranerz Energy Corporation for a $20 million State Treasurer Industrial Development Bond for the development of an in-situ uranium mining facility in Johnson and Campbell Counties. (Recommended to the governor and state treasurer for approval)."

The WBC's recommendations will be presented to the State Loan and Investment Board at its December 6, 2012, meeting in Cheyenne. More:

Now you know why I have been writing so much about Wyoming!

Uranerz' budget was $38M - $40M to construct its mine, which their last news release says is nearing completion. While $11M+ cash as of the end of September is a lot of money, they still have to drill their Deep Disposal Wells and cover any other capital and G&A expenses until production ramps up.

In any event it is usually never a bad idea to have a cash buffer if the cost is right. Use it to develop new mines, to step-up exploration, or for new acquisitions etc. In a cyclical industry like mining, whenever a $20 million loan becomes available, especially a low-cost government loan that doesn't dilute shareholders, most miners jump at the opportunity!

Wyoming's state budget surplus has afforded it the opportunity to help local companies like Uranerz Energy to grow faster, with around $600M earmarked for these types of government partnership loans. With the WBC already onside, my understanding is that URZ is just waiting for a third-party appraiser assessment and the governor's signature.

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Thursday, November 15, 2012 Breakout Small-Caps: DANG E-Commerce China Dangdang, CEL Cellcom Israel, ACRX AcelRx Pharma, MEIP MEI Pharma, TCX Tucows, MEET MeetMe, MJNA Medical Marijuana, tsx/v: PTA Petroamerica Oil

Guru Trader Tweet of 8 Notable Market Movers - High Volume, Price Action & News:

DANG E-Commerce China Dangdang $4.16 +$0.48 2.7m - %G,
CEL Cellcom Israel Ltd $8.86 +$0.31 .6m - %G,

ACRX AcelRx Pharmaceuticals $3.36 +$0.16 1.7m - %G|YH,
MEIP MEI Pharma Inc $1.63 +$0.05 .6m - %YH,

TCX Tucows Inc $1.38 -$0.01 .1m, FT@ $0.84
MEET MeetMe Inc $2.65 +$0.41 .4m - %G|$G,

MJNA Medical Marijuana Inc $0.125 +$0.01 23m - VA,

PTA Petroamerica Oil Corp $0.265 -$0.005 4.2m - VA,

Top 10: VA Volume Active, %G Percent Gainer or $G Dollar Gainer. YH 52-Week High, NH 10-Year New High, FT@ First Tweeted at price (within a year +/-) - verify or follow live at or subscribe to

Recent News Headlines

- Nov 15, (NYSE: DANG) Dangdang Announces Third Quarter 2012 Results (Year-Over-Year Q3 Revenues: Net +42%, Media +33%, General Merchandise +56%)
- Nov 13, (NYSE: CEL) Cellcom Israel Announces Third Quarter 2012 Results (free cash flow +58%, continues efficiency plan, nets 5,000 new cellular subscribers)
- Nov 11, (NYSE: CEL) Cellcom Israel Announces Update Regarding Purported Class Action Pending Against the Company
- Nov 15, (NASDAQ: ACRX) AcelRx Announces Primary Endpoint Met in Phase 3 Non-Inferiority Study of Sublingual Sufentanil NanoTab PCA System vs. IV PCA Morphine for Post-Operative Pain (conference call and webcast today to discuss top-line results)
- Nov 06, (NASDAQ: ACRX) AcelRx Pharmaceuticals Reports Q3 2012 Financial Results
- Nov 06, (NASDAQ: MEIP) MEI Pharma Reports New Data Showing High Response Rates in Clinical Trial of Pracinostat and Azacitidine in Myelodysplastic Syndrome (Data Accepted for Presentation at American Society of Hematology Annual Meeting on Dec 10)
- Nov 05, (NASDAQ: MEIP) MEI Pharma Announces $27.5M Private Placement Financing Led by New Institutional Investors Vivo Ventures and New Leaf Venture Partners
- Nov 15, (AMEX: MEET) MeetMe Inc. Ranked Number 32 Fastest Growing Company in North America on Deloitte’s 2012 Technology Fast 500
- Nov 07, (AMEX: MEET) MeetMe Inc. Reports Financial Results for Q3 of 2012
- Nov 13, (AMEX: TCX) Tucows Plans to Commence Dutch Auction Tender Offer
- Nov 13, (TSX: TC) Tucows Reports Continuing Strong Financial Results for Q3 2012
- Nov 15, (OTC: MJNA) Medical Marijuana Portfolio Company CanChew BioTechnologies Inc. Announces Final Day for Market Survey and Free Product Trial Registration
- Nov 15, (OTC: MJNA) Medical Marijuana Inc. Reports Third Quarter 2012 Revenue and Income Quarter Over Quarter Increase Of Over 1500% From Same Period Last Year
- Nov 7, (OTCPK: MJNA) Medical Marijuana Inc. Sees Growth Opportunities For Its Portfolio Company with Historic Washington 502 Vote to Legalize Marijuana for Recreational Use, Massachusetts New Medical Marijuana Initiative and Michigan Vote to Decriminalize Marijuana in Four Major Cities
- Nov 7, (PINKSHEETS: MJNA) Medical Marijuana Inc. Anticipates Increased Opportunities For Its Portfolio Company with Colorado Voters Passage of Amendment 64, Becoming First State to Legalize Marijuana for Recreational Use
- Nov 13, (TSXV: PTA) Petroamerica Announces Light Oil Discovery at La Casona-1 and Provides an Operations Update for its Colombian Activities

We filter today's market movers, then focus on 5 or more small-cap stocks with seemingly positive news and/or technical chart momentum, while excluding one-day-only events such as a buyout. Click symbols above, or Submit any symbol to our Detailed Quote Portal at, for its stock quote, chart, news, research and to view/post/share comments at any ticker's bulletin board. Sign-up for our Small Cap Stock Observer Newsletter, Featured Stock Profiles & News by Email, and to setup your own My Portfolio, My Watchlist & Alerts and email preferences. Free!

Monday, November 5, 2012

AnyTicker Bulletin Boards; Metals Stocks To Outperform Bullion; Contrarian Plays; URZ Receives DDW Permit -

Our New AnyTicker Bulletin Boards

Do you post on stock Bulletin Boards? Have you ever requested or waited for new boards to open? We asked why there isn't a comment board already setup for every valid ticker symbol that can be quoted. Seems logical... right? But as far as we know there just isn't one, so we built it - marrying our quote data feeds to the best comment platform out there IMHO.

We now invite you to comment about your favourite stocks, investment ideas, trends, market news, or post interesting charts etc. Simply go to, submit a quote symbol, login with any Facebook, Twitter, Google+ etc. account, and type away. You can even add pictures or media, star or vote posts up or down, subscribe via email or RSS, and share posts on your social pages.

To focus discussions, every valid symbol has its own board, including every stock, put or call options, warrant or preferred share, ETF, mutual fund, index, commodity etc. Multiple listed companies have distinct boards, e.g. to facilitate German on a Frankfurt board, English/Spanish on U.S. boards, or English/French on a TSX Canadian board. With 60k+ public companies, and just as many mutual funds and ETFs, plus multiple listings, options etc., our boards already number in the hundreds of thousands! We'll even add a comment board at the bottom of this newsletter, at our website.

Every bulletin board has a Community tab with the Top Discussions, and below this are links to recent comments Also On our site. Use these links to discover new boards, or simply Quote and Post!

Join One Of Our Recent Discussions

Recent comments are shown on our homepage and we have started the discussion with posts about some of the stocks we are watching:
  • Cash Offer with 2-Spinouts: Galway Resources (TSXV: GWY) then $1.57 +.22 on 4M+ shares, although their newest release of 3 new high grade gold zones was a week earlier on October 9, 2012. For over a year GWY has been releasing impressive drill results and we wanted to know more - towards adding the stock to our Top 30 Small-Caps list. Three days later the company announced a cash offer of $2.05 per GWY share, PLUS shares in two new companies (0.9 share to hold the Vetas gold project and US$18 million cash, and 1.0 share to hold the Victorio tungsten-molybdenum project and US$12 million cash). Unfortunately we didn't move faster as V.GWY is now $2.23. We'd like to know your thoughts about Galway, their drill program etc. and the potential of the two new SpinCo's and their metals projects?
  • Merger: Prodigy Gold (TSXV: PDG) then $0.99 +.30 on an agreement to be acquired by Argonaut Gold (TSX: AR), representing $1.08 per PDG share. Longer-term this seems like an interesting combination of PDG's Magino mine with AR to potentially produce 300-500k Au-oz per year. Any thoughts on where AR will settle out, and its potential looking forward?
  • Two More Buyouts: Lorex Technology (TSXV: LOX) agreed to be acquired by FLIR Systems (NASDAQ: FLIR) for $1.30 cash per share. Similarly, Hana Mining (TSXV: HMG) agreed to be acquired for $0.82 cash per share. LOX is new to us but our Guru Trader Tweet has mentioned HMG six times since January 2010, between $1.48 and $2.05. HMG traded as high as $5.68 in December 2010. Both stocks caught our eye last week on high trading volumes with all-cash offers that are slightly higher than where they are trading. Is there more here?
  • Two Oil & Gas Plays: Donnycreek Energy (TSXV: DCK) then $2.01 +.21 on 1M+ shares, recently acquired Deep Basin Montney assets in Alberta and closed a $29M private placement. Petroamerica Oil (TSXV: PTA) then $0.25 has been mentioned in our past Guru Trader Tweets and newsletters about the Colombia Oil Boom. On October 1, PTA announced drilling start-up of the Las Maracas-5 well and a production update. Both PTA and DCK have been trending up for months, with PTA's 52-week high of $0.28 made on October 22, and DCK's all-time high of $2.35 made on October 18. What's your opinion of these oil plays?
  • Split It: Apple Inc. (NASDAQ: AAPL) makes great products, although overpriced IMHO. The stock doesn't seem expensive with a 13 P/E, ok dividend and strong 1, 5 and 10-year charts. Apple is the biggest company, but it's not a conglomerate like Berkshire Hathaway (NYSE: BRK.A), yet even they have a lower priced share (NYSE: BRK.B). The question is would shareholders be better served if AAPL split 10 for 1, or issued a sub $100 class B share?

You're invited to add to these discussions, or start a new one at your favourite stock boards. Just Quote and Post! Note: for Canadian TSX quotes, simply add :CA to the symbol and then Submit.

Metals Stocks Set To Outperform Bullion This Time?

Over the past decade it seemed that while commodity metals prices moved higher, prices of mining shares refused to keep pace - let alone outperform as they had done in previous bull markets. As mentioned in our recent newsletters, we believed that metals prices would rally this fall and that junior mining stocks may be finally set to make their move.

Despite generally weak equity markets (S&P 500 -2.0%, DJIA -2.5% in October), gold, silver, platinum, palladium and most base metals prices have moved higher this fall. Our mining stock posts above are just a glimpse of all the consolidation, financing, merger and buyout activity lately. Perhaps together this is an early indicator that unless the economy goes off the fiscal cliff in December, that 2013 could be one of the best years ever for exploration and mining shares versus bullion or ETFs.

Contrarian Resource Plays - Nat Gas, Diamonds, Uranium

The contrarian in us is always looking for low tides that may be ready to reverse trend and break new waves higher again. This time last year we wrote that we like, "beaten up natural gas and diamond plays that have an established resource, for a turnaround sometime over the next year".

While carat prices have mostly recovered from the 2008 economic crisis, diamond-mining stocks have yet to show clear signs of a commodity-price macro-driven uptrend. Similarly, decade low natural gas prices have recovered close to double its sub-$2 price set last April, but this 6-month uptrend is not as easily identified in share prices - as most natural gas companies also produce oil, or are utilities. Small-cap diamond and natural gas exploration plays remain of interest and on our radar.

Uranium investments are very interesting to track, as they tend to establish clear trends with big moves. U3O8 made its record high of $138 a pound in June 2007, one year before oil made its new high of $145 a barrel. Both crashed by the end of 2008 during the economic crisis. Oil has since recovered to now over double its 2009 low, with uranium barely above its $40 trough low.

In 2010 U3O8 prices were again over $70 a pound. Uranium mining stocks were one of the hottest investments right up until March 2011 when Japan's record 9.0-earthquake and tsunami hit the Fukushima-Daiichi nuclear power plant. Our past newsletters describe how the media, public, governments and markets overreacted in punishing anything nuclear reactor related. We've shown how much nuclear power capacity is being built worldwide, and how uranium is not just a long-term growth story, as the world's mined supply doesn't even cover current demand. Japan's nuclear reactors are already being put back online, as practical and economic realities are sinking in.

It's ironic how all the uranium good news recently has so far only resulted in even lower prices. That's what makes uranium a contrarian resource play today, as the market's momentum and price trends don't seem to recognize the fundamental positives. As any contrarian sector starts to turn around, focus on the strongest and best-positioned companies, as these tend to move first and farthest!

URZ Outperforms All Tracked Uranium Investments

Uranium prices stubbornly continue to be the weak outlier in an otherwise seasonally strong metals environment. While precious and base metals continue to build technical support, with many believing that gold will take out previous highs and $2,000 an ounce over the next year, uranium prices have not yet participated. Instead, the spot U3O8 price has fallen another $4.00 to $42.50 a pound, down another 8.6% over the past month.

Here’s how the uranium stocks, ETFs and holding companies that we track have performed, based on month-end closing prices on October 31 compared to September 28, listed from worst to first:

This includes a variety of uranium miners, from small-cap exploration and development companies to some of the world's largest uranium producers. Not included are integrated majors like BHP Billiton (NYSE: BHP) and Rio Tinto (NYSE: RIO) that produce uranium but are more influenced by precious metals and other base metals prices.

URZ has not just outperformed every other pure uranium investment that we track; it's the only name on the list that's not down over the past month! This seems even more impressive when you compare news flows of these various uranium companies, with URZ not releasing any news for almost two months prior to October 23rd.

Uranerz Energy Receives Deep Disposal Well Permit

Uranerz Energy (AMEX: URZ)(TSX: URZ)(FF: U9E) has been our featured uranium company since late 2010. Around then uranium was the hot sector, and Uranerz seemed ideally positioned to become America's next uranium producer. The company already had NI 43-101 resources of 19M+ pounds of U3O8, with 30+ projects to explore and develop in a prolific uranium-mining region.

URZ was one of the best performing uranium stocks back then, doubling in just a few months from under $3 to almost $6 as the company achieved several financing and permitting milestones. Then suddenly Fukushima hit all uranium investments hard, and most have still not recovered.

Summary of Uranerz Energy accomplishments since March 2011:
  • Initiated Powder River Basin drilling program (205 wells drilled as of August 15, 2012)
  • Added to the Russell Family of Indexes (one of only two uranium small-caps still listed)
  • Final NRC permit approval (Nuclear Regulatory Commission)
  • Commenced construction of the company's first mine (plant is near completion)
  • Signs processing agreement with Cameco (sales contracts with Exelon and another utility)
  • Production well and development updates (discovers new U3O8 trend, Monument Project)

As you can see, Uranerz Energy has been busy! Since Fukushima the company hasn't missed a step in its exploration, development and mine construction plans. However, when looking at URZ' current $1.55 share price, with 6.65M shares sold short as of October 15, you might wonder how close this company really is to becoming a uranium producer. After a quiet period since August, the company may have delivered the last piece of the puzzle and your answer in its October 23 news release:

"Uranerz Energy Corporation announces that the Wyoming Department of Environmental Quality has issued the Class I Underground Injection Control (deep disposal well) permit for the Company's Nichols Ranch ISR Uranium Project located in the Powder River Basin of Wyoming, U.S.A. This deep disposal well authorization is the last permit required to begin operations and commercial uranium production at Nichols Ranch.

'The receipt of the deep disposal well permit concludes a long but successful effort to obtain all of the regulatory permits and licenses needed to construct and operate an ISR uranium mine in Wyoming,' stated Mike Thomas, Vice President of Environment, Health and Safety.

'With this final permit in hand, Uranerz will focus on installing two deep disposal wells this winter while completing the remaining construction activities,' stated Company President and CEO, Glenn Catchpole. 'We are all very excited at the prospect of becoming America's next ISR uranium producer in 2013.'

The Nichols Ranch ISR Uranium Project is expected to become the first new uranium mine built in Wyoming since 1996. The project is licensed for a production level of up to two million pounds of uranium per year with initial annual production targeted for 600,000 to 800,000 pounds after ramp-up. The project will also serve as a platform to develop the Company's other Powder River Basin properties with enhanced economics for adjacent and satellite projects."

Nichols Ranch Aerial View, Sept. 2012.
More URZ Mine Construction Photos:

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Wednesday, October 17, 2012 Breakout Small-Caps: ARNA Arena Pharma, SIFY Sify Tech, MTG MGIC Invest, ONCS OncoSec Medical, tsx/v: RTK Artek Expl, CQE Cequence Energy, DCK Donnycreek Energy

Guru Trader Tweet of 7 Notable Market Movers - High Volume, Price Action & News:

ARNA Arena Pharmaceuticals $9.75 +$0.39 14m - VA|FT@ $3.20,
SIFY Sify Technologies Limited $2.78 +$0.49 3.5m - %G,

MTG MGIC Investment Corp $2.03 +$0.29 13m - %G,

ONCS OncoSec Medical Inc $0.395 +$0.06 3.5m - VA,

RTK Artek Exploration Ltd $2.90 +$0.47 2.8m - VA|YH,
CQE Cequence Energy Ltd $1.94 +$0.17 6.3m - VA,

DCK Donnycreek Energy Inc $2.01 +$0.21 1.4m - $G|NH,

Top 10: VA Volume Active, %G Percent Gainer or $G Dollar Gainer. YH 52-Week High, NH 10-Year New High, FT@ First Tweeted at price (within a year +/-) - verify or follow live at or subscribe to

Recent News Headlines

- Oct 12, (NASDAQ: ARNA) Arena Pharmaceuticals Initiates Phase 1 Multiple Dose Clinical Trial of APD811 for Pulmonary Arterial Hypertension
- Oct 17, (OTCBB: SIFY) Sify Reports Revenues of INR 2059 Million for Second Quarter of Fiscal Year 2012-13
- Oct 08, (NYSE: MTG) MGIC Releases Monthly Operating Statistics
- Sep 28, (NYSE: MTG) MGIC Announces Status Update Regarding Freddie Mac
- Oct 17, (OTCBB: ONCS) CE Certification Enables Commercialization of OncoSec Medical System (OMS) Electroporation Device in European Economic Area
- Sep 13, (TSX: RTK) Artek Exploration Ltd. Provides Drilling Results Update at Inga
- Oct 04, (TSX: CQE) Cequence Energy announces appointment of new director
- Sep 10, (TSX: CQE) Cequence Energy announces Falher discovery at Simonette/Resthaven
- Oct 15, (TSXV: DCK) Donnycreek announces Closing of $29 Million Private Placement Equity Financing and Acquisition of 169.5 gross (115.5 net) Sections of Deep Basin Montney Assets

We filter today's market movers, then focus on 5 or more small-cap stocks with seemingly positive news and/or technical chart momentum, while excluding one-day-only events such as a buyout. Click symbols above, or Submit any symbol to our Detailed Quote Portal at, for its stock quote, chart, news, research and to view/post/share comments at any ticker's bulletin board. Sign-up for our Small Cap Stock Observer Newsletter, Featured Stock Profiles & News by Email, and to setup your own My Portfolio, My Watchlist & Alerts and email preferences. Free!

Friday, October 5, 2012

Eye-Popping Election Cycle Stock Market Returns; Metals Rallying; (AMEX/TSX: URZ) Uranerz Energy -

But Which Trend, Is Your Friend?

I've always been told and believed that timing the market daily is a mug's game. I mean that going bug-eyed watching a trading screen all day in hopes of scalping an extra fraction of a point here or there is fine for some; but for most of us doing something else for a living, trying to flip stocks daily in the hopes of consistently outperforming the market has proven to be a total waste of time. In fact, it's usually detrimental to long-term returns compared to a simple Buy-&-Hold investment strategy.

This doesn't mean hold-forever; I'm just not a big believer in short-term Day Trading. But I do believe that intermediate to long-term Trend Trading can be very useful in timing better entry and exit points - because it takes more than a few days momentum data to confirm a meaningful trend.

My favourite momentum data comes from established market cycles. They repeat often and therefore tend to be more reliable. However I'm not talking about the Super-Bowl Market Predictor that says that an old NFL-team win means rising stocks, while an old AFL-team win means falling stocks. Yes I know it's been around a long time, with an impressive 80% accuracy, but there still needs to be some common sense reasons why a trend worked, before betting your savings on it repeating.

Market Timing Around The 4-Year Presidential Election Cycle

One of the most important market trends to consider has been the Four-Year Presidential Election Cycle. You too may have known about this for years, but I'll guess that after looking closer that you had no idea just how predictable and powerful this market indicator is. I didn't, but will from now on!

History suggests that during the first two-years of a presidential term, that the market underperforms compared to the last two-years. The first year is usually the worst, and the second year is also below average. Wars, recessions and bear markets tend to start or occur in the first-half of a term. The third year is usually the strongest and the fourth year, an election year, also tends to be above average.

S&P 500 Total Return Index - 1948-2008 average by U.S. Presidential Term-Year:
  1. 7.41%
  2. 10.21%
  3. 22.34%
  4. 9.79%
This only makes sense as politicians are always campaigning, wanting to get any unpopular new policies and actions out of the way and forgotten by the next election. Budgets, tax changes and law reforms can have considerable impact on the economy and the stock market. The basic re-election formula for both parties has been to cut early and hold off spending until the second-half of the term.

In 1936 Keynesian Macroeconomics introduced the need for governments to use these spending taps. This theory called for governments to ease business cycle recessions by stimulating demand through fiscal policy. A decade or so later the idea became government gospel, especially as a political tool to influence the timing of when the economy (and voter enthusiasm) would be inflated.

Although the Federal Reserve is supposed to be independent of the president and Congress, monetary policy appears to follow the presidential election cycle. Monetary policy expanded 65% of the time during the third year, compared to 48% for the other years. Does it still seem like a coincidence why the third year of a president's term is usually the market's best year?

Huge Second-Half Gains Versus First-Half Losses

There are many similar tables and graphs that demonstrate market returns for each year of any four-year presidential term. However it is not as meaningful to look at election years prior to 1952, because other than for WW2 the government generally did not attempt to influence the economy before then. When analysing market performance the S&P 500 (SPDR ETF (NYSE: SPY)) is the benchmark, excluding commissions, dividends, interest, and of course taxes, that are not factored in for simplicity.

The best investment returns were not surprisingly provided by the 27-month period from October 1 of year-2 until the end of a presidential election year. This is compared to the 21-months starting on the first trading day of the inaugural month until September 30 of year-2. What did surprise me is the consistency and magnitude of how far these grouped cumulative returns were apart!

Starting with the 1952 election year, $1,000 reinvested only during the first-half of every presidential term would have returned a measly $643 in the year 2002, a loss of 36% after 50-years - not including inflation! If you had instead invested only during the second-half of every presidential term this would have returned $72,701, a gain of 7,170%. Wow!

Further, second-half'ers won during all thirteen terms from +16% to +70%, and averaging around 40%. First-half'ers won seven times from +7% to +49%, but lost six times from -2% to -47%.

The problem is that these tables only go up to the year 2000. A lot has happened since then including 9/11 and the so-called Great Recession from December 2007 to June 2009. I'd like to also know how well this trend predictor held up under these extreme conditions. Using our website's Historical tab after quoting the symbol ^SP500 allows me to calculate returns for the 2004 and 2008 election years.

My chart below plots all of this data for the 1952-2008 presidential election years. It appears that the second-half predictor held up well after 9/11, as the S&P 500 gained around 48% from October 1, 2002 until December 31, 2004. However almost all of this gain was given back during Bush's last term ending in 2008, marking the first second-half loss of any presidential term in over six decades.

The first-halves were up around +10% and +26% for the 2004 and 2008 election years. Not bad until you realize that the 1952-2010 first-half terms cumulative value is still under the initial $1,000.

Stock Markets Predict Presidents And (DO NOT) Do Better Under Republicans

This predictor may even work in reverse, as many believe that the stock market's social mood can predict who wins the next election. The incumbent usually wins if the market is strong and the other party usually wins if the market is weak, going into an election.

Contrary to popular belief, research studies of market data from 1927-2003 show that excess returns for Democratic presidents have been about 11%, while only 2% for Republican presidents. For small-cap stocks this is more pronounced, with a difference of excess returns of about 22% for Democrats compared to Republican administrations. Market volatility for Democrats has even been lower.

This year being another presidential election year, we won't know Obama's second-half return until December 31. However, the S&P 500 was 1,143 on October 1, 2010 and if we apply today's 1,461, this works out to around +28%. Unless there's a crash this month (always a scary thing to say in October) then the stock market may be predicting an Obama win.

Precious Metals Rallying

We often refer to ratios such as the Gold / Silver, Gold / Oil and Dow / Gold ratios. Investments like these compete for investor attention, and knowing their historic ratio averages, and upper and lower ranges, help identify when one might be cheap or expensive overall, and its relative value. Last month's newsletter showed gold's 10-year uptrend, with corrections in 2006, 2008 and 2011, and how metals were seasonally poised to rally again, with the gold/silver ratio indicating that silver was relatively cheap. Gold is now higher... and silver has materially outperformed it!

Gold and silver's biggest ETFs are SPDR Gold Trust (NYSE: GLD) and iShares Silver Trust (NYSE: SLV). Global X's related ETFs include: Pure Gold Miners (NYSE: GGGG), Gold Explorers (NYSE: GLDX), Silver Miners (NYSE: SIL) and a new diversified Junior Miners ETF (NYSE: JUNR).

Now that gold's decade long uptrend appears to be intact and may be gaining strength again, we might be able to extend gold's established trend lines to suggest its next major technical resistance. This assumes that gold's corrective phase that started last fall has concluded, and that gold can smash through its previous high resistance of $1,923 this time. Looking out a year or so, based on these highly conditional technical observations alone, I come up with around $2,650 an ounce for gold.

If this happens then silver works out to $52 if the gold/silver ratio remains where it is now, at 51. However, if the gold/silver ratio drops back to its historic level of 15 at that time, like it did as gold and silver's last major uptrend peaked in 1980, this might suggest around $175 an ounce for silver.

Base Metals Rallying

Since our last two newsletters about bottom fishing gold and other metals and related stocks, most base metals have kept pace with precious metals. Since August 7, the approximate spot price increases were: Gold and Palladium +10%, Platinum +20%, Silver +24%. For base metals: Copper +10%, Zinc and Aluminum +12%, Lead and Nickel +20%.

There are lots of supply and demand reasons, based on monetary versus industrial or other uses, why precious metals and base metals prices shouldn't necessarily run together. In any event, once again gold's established trickle-down trend effect on base metals has held.

Spot Uranium, The Outlier

One metals train that has stubbornly refused to leave the station is the short-term U3O8 price. Stuck at around $50 a pound for a year now, uranium peaked back in 2007 at $137. Back then uranium prices, and similarly record high oil prices, were technically extended and due for a major correction. Oil has since recovered to more than double its lows, while uranium and related investments suffered further and has yet to recover after Japan's record earthquake and tsunami on March 11, 2011.

Investors near abandonment of anything uranium was blamed on the Fukushima-Daiichi nuclear accident. The media hyped nuclear fear, and governments worldwide reacted. Most have reasonably mandated reactor stress-tests and review, while Japan and a few others like Germany didn't wait for the facts before rashly stating they would end their use of nuclear reactors altogether.

The fact is that the March 11, 2001 Japanese earthquake and tsunami was a natural disaster. Over 16,000 people were killed and 3,000 more are missing. However, a year and half later not one of those deaths are attributed to nuclear radiation.

Another fact is the same earthquake caused a hydroelectric dam to collapse in the same Fukushima district. This resulted in hundreds of deaths and thousands of homes being destroyed. I don't recall any media reports, government statements or public outcry for ending hydroelectric power!

Despite these facts, the U3O8 spot price is now $45.75. It was close to $70 just before Fukushima.

Long-Term Uranium Demand, Supply and Prices Remain Supportive

We have been writing for months about positive fundamental developments in the nuclear power industry. China is the main driver for new nuclear power reactors and is now going ahead on projects that were put on hold after Fukushima. Next in the pecking order for the world's 552 reactors currently in construction, planned or proposed are: India, Russia, United States, Japan, United Arab Emirates, Ukraine, United Kingdom, Vietnam, Canada, South Korea and others.

Not only are these nuclear power programs still going ahead, we have recently cited industry experts and major publications that say many of these countries are now accelerating their nuclear energy efforts. Facing looming power shortages and higher energy costs going into elections over the next year, politicians in Japan and Germany have been back-pedalling on their anti-nuclear positions. Reactor closings may get delayed in Germany, and two reactors are now back online in Japan, with construction now resuming at J-Power's Ohma nuclear power plant, announced October 1.

On September 19 Japan's government retreated from recommendations calling for the elimination of nuclear power by 2040. The New York Times and Kyodo News implied that by dropping this goal, the Japanese government appears less committed to a nuclear phase out. Japan's dependence on imported energy and rising energy costs are unsustainable and many now believe the 35 "safe" idled nuclear power plants will be allowed to restart after the 2013 election.

Weak short-term prices have caused uranium-mining projects, like BHP Billiton's (NYSE: BHP) huge Olympic Dam mine in Australia to be deferred last month. This worsens a supply deficit that the world already has, not including the effects from all the positive demand factors reported recently.

Another major reduction in world uranium supply should happen as the U.S. and Russia complete their 20-year Highly Enriched Uranium (HEU) Program, scheduled to end next year. Also referred to as Megatons to Megawatts, or Swords to Ploughshares, uranium from nuclear warheads is converted for peaceful uses such as nuclear power. By the end of 2013, 500-tons of HEU will have been down-blended. Going forward, this removes about 13% of the world's annual uranium supply.

Raymond James, Morgan Stanley and others seem to agree, forecasting a uranium shortfall after next year, with spot prices around $70. Currently the 24-month or later U3O8 price is around $60.

Uranium Stocks

U3O8 is radioactive and highly regulated, and therefore can't be held like bullion. Uranium also does not have a fully transparent active market, as utilities and uranium producers usually don't announce transaction prices or even the name of the buyer.

To ride the next uranium trend investors have to look at ETFs like Global X Uranium (NYSE: URA), or at specific uranium mining stocks. These include major producers like Cameco (NYSE: CCJ)(TSX: CCO) and Rio Tinto (NYSE: RIO). Our featured uranium stock continues to be Uranerz Energy (AMEX: URZ)(TSX: URZ), a $129-million market-cap company actively exploring, developing and expected to soon be producing uranium in Wyoming's Powder River Basin (PRB).

You have to credit Uranerz' management, or at least their good luck. Just before Fukushima, when URZ traded around $5 a share, they raised $47-million for mine construction and related costs. URZ then sold-off like everything else uranium in 2011/2012, but the fortunate timing of that funding provided much less share dilution compared to today with URZ now trading at around $1.67 a share. This summer URZ remained one of only two uranium small-caps in the Russell Indexes.

Uranerz keeps advancing its projects while many other uranium companies have had to slow down and re-evaluate. The Nichols Ranch plant at the company's first uranium mine is near complete and just waiting for the company's Deep Disposal Well (DDW) permit before hopefully setting a production date soon. URZ is also exploring its 30+ uranium projects in the PRB, with over 200 wells drilled so far this year, including a new uranium trend they just discovered called the Monument Project. URZ remains very well positioned for when uranium prices start to run again!

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Wednesday, October 3, 2012 Breakout Small-Caps: SIRI Sirius XM Radio, BIOL Biolase, VRNG Vringo, tsx/v: AC.B Air Cda, GQC GoldQuest Mining, ZEN Zenyatta Ventures, UCU Ucore Rare Metals, TNR Gold, NQ Northquest

Guru Trader Tweet of 9 Notable Market Movers - High Volume, Price Action & News:

SIRI Sirius XM Radio Inc $2.70 +$0.08 75m - VA|YH|FT@ $0.73,
BIOL Biolase Inc $2.22 +$0.56 3.5m - %G,

VRNG Vringo Inc $3.89 +$0.80 22m - VA|%G|$G|FT@ $3.94,

AC.B Air Canada $1.43 +$0.08 3m - VA|YH,

GQC GoldQuest Mining Corp $1.37 +$0.09 1m - $G,
ZEN Zenyatta Ventures Inc $0.47 +$0.045 2.7m - VA|YH,
UCU Ucore Rare Metals Inc $0.55 +$0.01 3m - VA|YH,
TNR TNR Gold Corp $0.15 +$0.005 2.3m - VA|YH,
NQ Northquest Ltd $0.71 +$0.07 .2m - $G,

Top 10: VA Volume Active, %G Percent Gainer or $G Dollar Gainer. YH 52-Week High, NH 10-Year New High, FT@ First Tweeted at price (within a year +/-) - verify or follow live at or subscribe to

Recent News Headlines

- Oct 03, (NASDAQ: SIRI) Sirius XM Radio to Announce Third Quarter 2012 Results
- Oct 03, (NASDAQ: BIOL) BIOLASE Receives FDA Clearance and CE Mark for Its EPIC 10(TM) Diode Soft Tissue Laser
- Sep 27, (AMEX: VRNG) Vringo Comments on U.S. Patent Office Action
- Oct 02, (TSX: AC.B) Air Canada to Form Leisure Group with Combination of New Low-Cost Airline and Air Canada Vacations; Michael Friisdahl Appointed as President and CEO of new unit
- Oct 01, (TSX: AC.A) Air Canada Announces Fleet Plan for International Growth
- Sep 23, (TSXV: GQC) GoldQuest: Drill Results at Romero, Dominican Republic; Includes Deepest Mineralization to Date of 123 Metres Grading 2.64 g/t Gold and 0.33% Copper
- Oct 03, (TSXV: ZEN) Zenyatta Ventures Achieves High Grade Purity of 97.2% C (Graphite) on First Test; On-Going Work Targets Greater Than 99.0% Purity
- Oct 03, (TSXV: UCU) Ucore Reports Dysprosium Separation Breakthrough
- Oct 01, (TSXV: UCU) US Department of Defense Contracts With Ucore for Metallurgical & SPE Studies
- Oct 02, (TSXV: TNR) TNR Gold Corp. Appoints Greg Johnson To The Board
- Sep 27, (TSXV: TNR) TNR Gold Extends Mineralized Zones At Shotgun With 209 Metres Of 1.02 g/t Gold
- Sep 13, (TSXV: ILC, TNR) TNR Gold Intersects 242 Metres of 1.25 g/t Gold on New Geophysical Target at Shotgun
- Sep 26, (TSXV: NQ) Northquest Ltd. stakes additional Claims at the Pistol Bay Gold Project, Nunavut, Canada
- Sep 25, (TSXV: NQ) Northquest Ltd. Commences Drilling with a Second Diamond Drill Rig at the Pistol Bay Project, Nunavut, Canada
- Sep 24, (TSXV: NQ) Northquest Ltd. Announces Additional Drilling Results from the Pistol Bay Project, Nunavut, Canada
- Sep 06, (TSXV: NQ) Northquest Ltd. intersects 164 metres grading 5.39 grams gold per tonne in drill hole PB-12-09 at the Vickers Target, Pistol Bay Gold Project, Nunavut, Canada

We filter today's market movers, then focus on 5 or more small-cap stocks with seemingly positive news and/or technical chart momentum, while excluding one-day-only events such as a buyout. Click symbols above, or Submit any symbol to our Detailed Quote Portal at, for its stock quote, chart, news, research and bulletin board. Sign-up for our Small Cap Stock Observer Newsletter, Featured Stock Profiles & News by Email, and to setup your own My Portfolio, My Watchlist & Alerts and email preferences. Free!

Wednesday, September 12, 2012 Breakout Small-Caps: FB Facebook, ODP Office Depot, APP American Apparel, ZERO Save The World Air, tsxv: BTT Bitterroot Res., CSL Comstock Metals, SCZ Santacruz Silver

Guru Trader Tweet of 7 Notable Market Movers - High Volume, Price Action & News:

FB Facebook Inc $20.69 +$1.26 95m - VA,

ODP Office Depot Inc $2.26 +$0.37 19m - %G,

APP American Apparel $1.40 +$0.11 2m - VA|%G|YH,

ZERO Save The World Air Inc $0.93 +$0.16 1.6m - NH,

BTT Bitterroot Resources Ltd $0.13 +$0.025 1.8m - VA|YH,
CSL Comstock Metals Ltd $0.41 +$0.045 .7m - NH,
SCZ Santacruz Silver Mining $1.71 +$0.06 .3m - NH,

Top 10: VA Volume Active, %G Percent Gainer or $G Dollar Gainer. YH 52-Week High, NH 10-Year New High, FT@ First Tweeted at price (within a year +/-) - verify or follow live at or subscribe to

Recent News Headlines

- Sep 12, (NASDAQ: FB) Facebook rallies on Zuckerberg’s upbeat mobile view
- Sep 05, (NYSE: ODP) Office Depot to Affirm Its Full-Year 2012 Outlook at the Goldman Sachs Global Retailing Conference
- Aug 30, (AMEX: APP) American Apparel Announces Comparable Store Sales Increased 24% Through August 28, 2012
- Aug 14, (NYSE: APP) American Apparel Reports Second Quarter 2012 Financial Results and Raises EBITDA Outlook for 2012
- Sep 06, (OTCBB: ZERO) STWA Announces Appointment of Its CFO, Gregg Bigger, to the Additional Role of President
- Aug 09, (OTCBB: ZERO) STWA Begins Commercial Manufacturing of AOT 2.0
- Sep 10, (TSXV: BTT) Options Granted; Aeromagnetic Surveys Completed at Windy Gold Project, Nunavut
- Sep 05, (TSXV: BTT) New Ni/Cu/PGM Targets Identified In Michigan
- Sep 07, (TSXV: CSL) Comstock Commences Drilling at VG Zone on QV Project
- Sep 04, (TSXV: CSL) Comstock Samples 3.31 g/t Gold Over 95 m at VG Zone on QV Project
- Sep 04, (TSXV: SCZ) Santacruz Announces Filing on SEDAR of the San Felipe NI 43-101 Resource Estimate Report
- Jul 26, (TSXV: SCZ) Marc Prefontaine Joins Santacruz Board of Directors

We filter today's market movers, then focus on 5 or more small-cap stocks with seemingly positive news and/or technical chart momentum, while excluding one-day-only events such as a buyout. Click symbols above, or Submit any symbol to our Detailed Quote Portal at, for its stock quote, chart, news, research and bulletin board. Sign-up for our Small Cap Stock Observer Newsletter, Featured Stock Profiles & News by Email, and to setup your own My Portfolio, My Watchlist & Alerts and email preferences. Free!

Thursday, September 6, 2012

Metals Stocks Poised To Move - Gold & Silver, Uranium Activity; (AMEX/TSX: URZ) Uranerz Energy -

Gold And Silver Set For Fall Rally?

As the "sell in May and go away" crowd focuses more on their golf-swing, instead of their swing-trades, market volumes and prices tend to sag until the "Summer Doldrums" end, sometime after Labour day. If history serves, while a lot of these funds and day traders remain in sleep mode, the time is right-now for savvy patient investors to quietly build positions in metals and metals stocks in anticipation of a seasonal rebound.

Gold made new all-time highs of $1,923 an ounce this time last year, when it was technically extended and due for a correction. It did, falling back to as low as $1,528 by May 16th of this year. Since then gold has remained flat at around $1,600 for months, well off its highs, now going into the fall and winter seasons when metals and metal stocks are usually strongest. Gold is currently $1,693 and seems to have formed a nice base to build on, trading solidly above $1,600 for over a month now.

Silver peaked over the winter in 2011 at close to $50 an ounce before correcting, pushed even lower this year as gold and the markets in general sold off. Almost cut in half, silver traded as low as $26.30 at the end of June, but for the first time in four months silver is again over $30 an ounce. We are even more bullish on silver than gold, for a variety of reasons from silver's lower price (especially with the "Gold / Silver Ratio" at 52, compared to its historic ratio of as low as 15), to its many more uses as both a precious and industrial metal, to silver's higher demand and much smaller above ground physical supply (in ounces), and the potential leverage all of this may represent compared to gold.

However, most gold and silver stocks have not kept up, not even close, with the great returns seen in precious metals bullion and ETFs over the past decade. Many believe, us included, that mining stocks are overdue to outperform their underlying metal. While some mining stocks may not be as liquid to trade and can be complicated to value, at some point institutional investors should start to recognize how much mining stocks have been discounted, and how much cheaper gold and silver can be bought in the stock market versus owning bullion or their ETFs.

We believe in the long-term uptrend in precious metals; and in silver over gold; and in quality precious metals stocks over bullion or their ETFs. We hope to feature a few emerging precious metals producers and junior explorers this fall and over the winter. To drill-down your own research of individual or groups of companies, search our Small-Cap Directory that lists each stock's market data, news, contact info and description - for close to 500 resource and non-resource stocks.

If proven right that gold can take out its 2011 highs over the next year, then gold's recent 20% selloff will seem like a gift. From a timing-perspective some of the current strength in precious metals ETFs, or what I call e-gold (NYSE: GLD) and e-silver (NYSE: SLV), has to be due to seasonal positioning.

How Can Uranium Prices Stay This Low Much Longer?

Last month we looked at worldwide uranium macro-events from Japan's restarting of its nuclear power fleet, to Germany's recent softening stance going into next year's elections. This report focuses more on the recent developments of specific uranium mining companies.

Uranium metal is the fuel used in nuclear reactors. Uranium and its related mining and exploration stocks sold off dramatically last year after the Fukushima reactor accident. While reactors worldwide had to be stress-tested, 170-million pounds of uranium were still consumed while only 140-million pounds were mined.

This begs the question how can U3O8 prices remain at around $50 a pound much longer? I mean if current mined supply can't even meet demand in a year when many of the world's reactors are shut down, how can demand be met at these prices as the world moves from 435 to 820 reactors?

And new uranium supply keeps getting delayed! For example, flooding has caused Cameco's (NYSE: CCJ)(TSX: CCO) huge high-grade Cigar Lake mine to be delayed a few times, now targeted to open in 2013. Due to low uranium prices, BHP Billiton (NYSE: BHP) just announced delays and that it needs lower cost designs for its massive (world's 2nd largest) Olympic Dam mine in Australia.

Are Utilities Scrambling For Future Uranium Supply?

Uranium is radioactive. For investors, this means they simply need to look at uranium mining stocks, ETFs the like the Global X Uranium ETF (NYSE: URA), or holding companies like Uranium Participation Corp. (TSX: U), as U3O8 can’t be held like bullion.

or ETFs like Uranium Participation Corp. (TSX: U), as U3O8 can't be held like bullion.

The exploration, mining, sale, use and disposal of uranium are also highly regulated. For utilities, this results in long lead times, meaning they have to secure uranium supply years in advance. For competitive reasons, deals between utilities and uranium producers are often secretive, not disclosing certain terms to the public such as prices or even the name of the purchaser.

Uranium prices hit $137 a pound in 2007, but the spot price for U3O8 is only $48.00 today! You might be thinking with prices that low, there must be lots of supply available right now. Just look at how far some utilities will go to secure their long-term uranium supply!

Paladin Energy (TSX: PDN)(AMEX: PDN) recently announced a long-term uranium supply contract with an unnamed major utility. What has raised many eyebrows is that the off-take agreement includes a huge US$200 million pre-payment; potentially solving any liquidity issues in ramping up production, and adding to PDN's takeout potential.

Why would a conservative utility accept all the risks with putting up such a landmark pre-payment, for uranium hopefully to be delivered over years, with uranium prices seemingly stuck around $50?

Activity In The Uranium Space Shows Interest Is Steadily Growing

Several analysts have resumed or increased their uranium industry coverage lately. Many of these stocks have seen upgrades because of higher uranium price expectations in general, or because of positive developments with specific companies that are producing uranium, or transitioning to the production stage. A few notable updates:

Cameco has a "Double U" plan to double its annual uranium production to 40M pounds by 2018. On August 26 they announced acquiring the Yeelirrie deposit from BHP Billiton for $430M. Yeelirrie is near the smaller Kintyre deposit that Cameco is currently developing in Western Australia.

Cameco is the world's largest public uranium company and should know when uranium stocks are undervalued. Cameco has completed 17 acquisitions since Fukushima - versus only three in the preceding two years!

One deal that got away from Cameco last year was Hathor's 57.9M pound Roughrider project. Rio Tinto (NYSE: RIO) won that fight by outbidding Cameco. Now RIO has a toehold to build-on in Canada's uranium-rich Athabasca Basin region - that Cameco still dominates.

The question is who's next on these uranium giants' menu? Keep an eye on Denison Mines (TSX: DML)(AMEX: DNN) that recently sold its U.S. mining interests, potentially making it more attractive to a company looking to acquire significant uranium assets in the Athabasca Basin.

Denison also owns a significant chunk of the Midwest JV: Areva (PA: AREVA) 69.16%, Denison Mines 25.17%, OURD Canada 5.67%. This 43.3M pounds of uranium open-pit project just received Canadian Federal Minister of Environment approval of the Midwest Environmental Assessment.

URZ Reports Further Good Uranium Grades And Q2 Financials

Another company to watch closely is our featured stock Uranerz Energy (AMEX: URZ)(TSX: URZ) that is constructing its first ISR uranium mine - targeted to open by the first half of next year! Uranerz has reported NI 43-101 resources of over 19M pounds of U3O8 from only 7 out of over 30 projects explored so far, and has recently reported finding a new uranium trend on their Monument Project.

From URZ' news release on August 28, "Uranerz Reports Production Well and Development Update - is pleased to report the receipt of further good uranium grades in wells drilled during the Nichols Ranch production well-field installation. As of August 15, 2012 the Company has drilled and cased 205 recovery and injection production wells in Production Area #1 of the Nichols Ranch ISR Mine, located in the Powder River Basin of Wyoming. To date, 22.5% of the installed production wells have resulted in a grade thickness ("GT") near or above 2. This is the third news release issued this year on the continued receipt of good uranium grades as development at Nichols Ranch continues.

Examples of some of the best drilling results from the wells drilled since April 1, 2012 are provided ...

'A hole with a GT of 1 is usually considered good in the ISR uranium mining industry thus we are very encouraged to see that we have been receiving GT's as high as 4.7 in these most recent drill results,' stated Kurtis Brown, Senior Vice President, Geology & Development.

Construction of the central processing plant and installation of the environmental monitor and production wells for ISR mining are proceeding. Concurrently, the Company is pursuing the final authorizations required for commencement of uranium production, including the permits for waste water disposal facilities." ...

Uranerz Energy's Nichols Ranch Mine, Ion Exchange Columns & Sand Filters
- Board of Directors Site Visit, June 2012.

See URZ' mine construction photos:

On August 9, Uranerz announced their 2nd Quarter 2012 Financial Results ended June 30, 2012, which showed over $19M in cash, almost $17M in working capital, and no long-term debt. This appears to be a healthy cash position as the cost to construct the Nichols Ranch mine was projected to be around $35M, and my understanding is that the plant is near completion, with the timing of a production start tied mainly to the approval of the company's Deep Disposal Well (DDW) permit.

All I have to say about the DDW permit process is that there has never been an application denied that I know of, and that URZ’ DDW would tie into the same stratigraphy (rock layers) used by DDWs of two other uranium producers in the region. One can only presume that "any day now" is a best guess.

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Tuesday, August 7, 2012

Bottom-Fishing Gold & Other Metals; Uranium's Next Move; (AMEX/TSX: URZ) Uranerz Energy -

Summer Doldrums And Gold-Fish Stocks

Rewind to 2001 as that 20-year-old gold bear-market was putting in its sub $260 an ounce lows. You might have been thinking back then how much gold stocks will fly if gold ever trades over its previous $850 highs again. Some arbitrarily imagined $1,000 an ounce was possible, with a few keen observers pointing to gold's inflation-adjusted target being well over $2,000 an ounce - for it to just equal the old 1980 high in today's dollars.

A decade later gold has outperformed most other investments. Gold bullion that is, but strangely not gold stocks. Almost a year after gold made new all-time highs of over $1,900 an ounce, gold has since corrected to just over $1,600 currently. Still, this is down just -15% from gold prices that had shot up over 7-fold over the last 11-years.

The largest gold ETF, SPDR Gold Trust (NYSE: GLD), tends to mirror gold returns and is down -14.44% from its September 6, 2011 closing high. Here's how half of the world's top 10 gold producers have fared since then: Barrick Gold (NYSE: ABX)(TSX: ABX) -38%, Newmont Mining (NYSE: NEM) -30%, Kinross Gold (NYSE: KGC)(TSX: K) -52%, Goldcorp (NYSE: GG)(TSX: G) -33%, Eldorado Gold (NYSE: EGO)(TSX: ELD) -47%.

Gold bullion prices may have been due for a breather, but why did major gold producers decline so much in comparison - double to over triple as much as gold? Is this an opportunity going into the seasonally strong Indian wedding, fall and winter seasons?

Further, why did junior gold stocks fall off a cliff, and is this an opportunity? The TSX Venture Exchange is down 34%, with many resource exploration stocks with seemingly real-projects now beaten down by 50%, 70% to even 90% of prices last fall. Of the over 470 stocks listed in our searchable Small-Cap Directory, around 10% of these have renamed, sold out, merged, consolidated their shares or restructured in other ways this year. You'd swear gold prices were back under $400 an ounce, instead of 4-times this.

We think this year's Summer Doldrums have been especially harsh, with many low-hanging fruit available for those so inclined to bottom-fish and wait. The timing may be right and we are looking at several junior gold and other resource stocks to feature over the next year.

One quick and easy method that our members use to track stocks for timing purposes is to login at our website, select My Portfolio or My Watchlists & Alerts under our My Preferences menu, and add the ticker symbols you follow. You can login and view/edit these anytime, or many find it useful to just update alerts or select when to be emailed - every weekday or just on Friday's, after the markets close.

Uranium's Next Move

Our featured uranium stock continues to be Uranerz Energy (AMEX: URZ)(TSX: URZ). URZ is constructing its first ISR uranium mine in the Powder River Basin of Wyoming that is targeted to open this year. The company has reported NI 43-101 resources of over 19-million pounds of U3O8 from only 7 out of over 30 projects explored so far, and has recently reported finding a new uranium trend on their Monument Project.

Uranerz has another critical asset that resource companies urgently need these days; they still have close to $20-million in cash! As we wait for more URZ mine construction and exploration updates, we should always remember to keep an eye on nuclear energy macro-events globally that can impact all uranium related investments.

Uranium stocks started strong this year, only to fall back again recently. The Global X Uranium ETF (NYSE: URA) is down more than 30% over the past 6-months. However, there seems to be more uranium news than usual recently, and after reading the following nuclear industry snippets and media coverage, you might agree that uranium investments seem poised for another upswing.

Politics Is The Same Everywhere - Let The Back Pedalling Begin

The fact is that nuclear power is safe, efficient, abundant, low-cost and clean energy. To switch now means job losses and higher energy costs, with harmful effects on the economy, the environment, and especially to a politicians chances of being re-elected!

As you will see, politics in Japan and elsewhere is the same as here. Politicians react emotionally at first and then flip-flop as the scientific and economic facts are realized. We have been saying this would happen, with an inevitable revival of uranium stocks despite the Fukushima meltdown of 2011.

Japan's Government May Restart All 50 Nuclear Reactors

With surging summer energy demands, the Japanese government is encouraging all fifty of Japan's reactors to be restarted. See Japan restarts reactors to avert power crisis.

Kansai Electric Power Company recently restarted two reactors at its Ohi power plant and now says its Takahama plant is most likely next to be restarted. Units 3 and 4 stress tests are almost completed.

But Isn't Everyone In Japan Against Nuclear Energy?

It may surprise you that most people in Japan, even post Fukushima, are NOT against nuclear energy! But it shouldn't, because the facts are that while many thousands died as a result of Japan's record 9.0 earthquake and tsunami on March 11, 2011, not one of those deaths were caused by radiation from the Daiichi nuclear plant accident! Furthermore, it does not appear likely that there ever will be any future deaths attributed to Fukushima. See the following video

An earthquake relief non-profit organization called shows that as of one-year later, approximately 16,100 have been killed and 3,000 are missing (19,100 in total). Various diagrams and tables break down the earthquake/tsunami related deaths and injuries, the economic costs of $574 billion and 1.2 million buildings damaged etc. It shows Fukushima power plant economic losses, but no nuclear related deaths. Sadly, over 94% of the deaths are tsunami and drowning related.

But What About The Anti-Nuclear Protests In Japan?

From a July 27, 2012 Wall Street Journal article titled, Political Clout of Japan's Anti-Nuke Movement Tested, ... "While the anti-nuclear protests have gotten larger and louder, they have yet to find a home in Japan's mainstream political system. Most in the ruling Democratic Party of Japan have supported restarting Japan's nuclear reactors, idled for maintenance and stress tests after the Fukushima accident. The main opposition party, the Liberal Democratic Party, which had ruled Japan for a half century until 2009, was the engine behind the growth of Japan's nuclear industry.

A few smaller political parties have long opposed nuclear power. The Communist Party and the Social Democratic Party are among them, and they are active participants in the protest marches. And some emerging forces are trying to take advantage of the anti-nuclear sentiment, particularly as prospects grow for imminent general elections. ...

But none seems to have captured the imagination of the protesters, who have gathered every week in recent months to oppose the government's decision to restart nuclear reactors. While no such anti-nuclear party has emerged nationally, sympathetic local candidates have appeared around the country in local elections. Most have failed. In the latest example, the incumbent, pro-nuke governor of Kagoshima prefecture won re-election by a landslide three weeks ago against a nuclear-power critic. ...

One factor that makes it hard for anti-nuclear candidates to win local races is the contribution of nuclear energy to regional economies. While polls of Yamaguchi voters show that as many as 70% oppose the Kaminoseki project, they also show that voters care more about jobs and the economy - the main reason why host communities have been hesitant to shake off their nuclear dependency, even after Fukushima.

Anti-nuclear politics can be even more complicated at the national level. 'No political party that has a shot at becoming a ruling party wants to make nuclear energy an election issue,' said Tomoaki Iwai, a professor of politics at Nihon University. 'The reality of having to draw out an actual energy policy for the major parties makes anti-nukes the stuff of minority opposition parties.'

The political balancing act of opposing nuclear power while assuring a steady power supply, was demonstrated by Mr. Iida's former boss. While Mr. Hashimoto has been critical of nuclear energy in general, he ended up dropping his opposition to the restart of the idled Ohi nuclear reactor in his region after officials said that Osaka could experience an 18% energy deficit in the peak summer months.

And Mr. Hashimoto has declined to back his former adviser in this Sunday's election. He has said it would be 'difficult' for the widely popular local party he heads to endorse Mr. Iida. Indeed, the only established party that has backed Mr. Iida has been the Communists. And even they did so only unofficially - due to Mr. Iida's past ties with Mr. Hashimoto's pro-market, small-government party." ...

But What About Germany's Plans To Totally Exit Nuclear Power?

From a July 17, 2012 Bloomberg report titled, Germany May Scrap Energy-Source Goal as Nuclear Overhaul Stumbles ... "Economy Minister Philipp Roesler told today's Bild newspaper that Germany may readjust targets linked to the plan to exit nuclear energy-generation by 2022 if jobs are threatened. The comments came a day after Environment Minister Peter Altmaier told Bild the coalition may fail to reach a goal to cut power consumption 10 percent by 2020. Merkel said July 14 that Germany probably won't use carbon capture and storage facilities after passing the required bill in parliament.

'Instead of questioning targets or declaring the entire energy switch a failure, we now need the right decisions for more energy efficiency, grid expansion and smart market design,' Claudia Kemfert, the chief energy expert at the Berlin-based DIW economic institute, said today by e-mail.

The government is struggling to grasp the scale of the effort needed to shift Germany away from nuclear power 16 months after Merkel promised to phase out reactors in favor of renewable such as solar and wind following the meltdown in Japan." ...

It will be interesting to see if Merkel's anti-nuclear stance softens further as the power shift gathers pace going into Germany's 2013 fall elections.

Global Nuclear Power Momentum Builds

From a July 26, 2012 joint report by the OECD Nuclear Energy Agency (NEA) and the International Atomic Energy Agency (IAEA), ... "Demand for uranium is expected to continue to rise for the foreseeable future. Although the Fukushima Daiichi nuclear accident has affected nuclear power projects and policies in some countries, nuclear power remains a key part of the global energy mix. Several governments have plans for new nuclear power plant construction, with the strongest expansion expected in China, India, the Republic of Korea and the Russian Federation. The speed and magnitude of growth in generating capacity elsewhere is still to be determined.

By the year 2035, according to the joint NEA-IAEA Secretariat, world nuclear electricity generating capacity is projected to grow from 375 GWe net (at the end of 2010) to between 540 GWe net in the low demand case and 746 GWe net in the high demand case, increases of 44% and 99% respectively. Accordingly, world annual reactor-related uranium requirements are projected to rise from 63 875 tonnes of uranium metal (tU) at the end of 2010 to between 98 000 tU and 136 000 tU by 2035." ...

Here are some recent media snippets of nuclear power project updates in these countries:

China And Canada

From a July 20, 2012 China Daily business report, Govt set to resume nuclear projects, "China is ready to resume nuclear power project approval, suspended last year in the wake of the Fukushima nuclear disaster in Japan, according to the former head of the National Energy Administration."

Four plants that had been approved, located in Fujian, Zhejiang, Guangdong and Shandong provinces, would now be cleared for construction.

And from a July 20, 2012 StarPhoenix article, Canadian uranium china-bound, "Canadian companies are now able to export Canadian uranium to China under a deal signed ...

'This does give some certainty to Cameco and the future of the industry in Canada. China is the world's fastest-growing nuclear program and obviously the fastest-growing market for uranium, so that offers significant opportunities.'

China is one of the world's largest consumers of nuclear energy. According to the World Nuclear Association, there are 14 reactors in operation in the country, 26 under construction and there are additional units in the planning stage."

Cameco Corp. (NYSE: CCJ)(TSX: CCO) is a major benefactor of the deal and has stated it wants to increase annual uranium production to 40-million pounds by 2018. China plans to build 100 nuclear reactors by 2030.

June 26, 2012, "About 15% of Canada's electricity comes from nuclear power, with 17 reactors in three provinces providing over 12 GWe of power capacity. Canada plans to expand its nuclear capacity over the next decade by building two more new reactors.

For many years Canada has been a leader in nuclear research and technology, exporting reactor systems developed in Canada as well as a high proportion of the world supply of radioisotopes used in medical diagnosis and cancer therapy." ...

India And Russia

How urgent is the world’s need for more power? Just look at India today! As I write this, the news wires are reporting about total blackouts affecting half of India’s population – 670-million people, or over 10% of the world’s population! Electricity is a luxury in India and rolling blackouts happen every day, with one-third of India’s households not even connected to the grid.

See articles: August 1, 2012, July 31, 2012, August 1, 2012 … "Prof SK Gupta, Delhi-based expert, citing Indian Planning Commission figures, said that the government must take steps to start full production of nuclear power in atomic plants across the country, by putting an end to protests by locals against nuclear power plants. 'All developed countries depend to some extent on atomic power. India claims to be a superpower. So, it needs to start the production of nuclear power to meet the growing needs.'" …

Last week India and Russia signed a deal by which Moscow will finance two new reactors in Tamil Nadu through an export credit of $US3.4 billion. See July 18, 2012 article, India, Russia sign Kudankulam project funding protocol.

India says it will increase its nuclear generation capacity over 12-fold from 5,000 MW to 63,000 MW by 2030. Russia has affirmed its plans to double nuclear capacity by 2020 from 24,000 MW currently.

South Korea

From a July 20, 2012 World Nuclear News article, "South Korea's newest nuclear power reactor has entered commercial operation. The country now has 23 nuclear units that together supply about one third of its electricity." ...

South Korea has another nuclear reactor under construction at Shin-Wolsong, with two more units currently being built at Shin-Kori. A further six more units are planned to begin operation in the next nine years as part of a program to establish nuclear power at 59% of supply by 2030.

Saudi Arabia And Other Major Oil & Gas Producing Gulf States

Coming soon to a desert near you - nuclear power! Can you believe that even Saudi Arabia, which recently surpassed Russia as the world's largest oil exporter, and other major oil & gas producing Gulf States want nuclear power?

The United Arab Emirates (UAE), Qatar, Jordan, Morocco and Libya all want nuclear power to lower their energy costs. Abu Dhabi's environmental agency has approved plans for a four-reactor nuclear plant that has already started full construction this month, due to start generating power in 2020.

Ironic, but this actually makes sense when you consider that Gulf States heavily subsidize their citizens electricity needs, where air conditioners are on non-stop, and they are giving up billions of dollars from oil sales by not switching to lower cost nuclear power.

New And Existing Nuclear Programs Expand

Many countries with existing nuclear power programs (Argentina, Armenia, Brazil, Bulgaria, Canada, China, Czech Rep., Finland, France, India, Japan, Pakistan, Romania, Russia, Slovakia, South Korea, South Africa, Taiwan, Ukraine, UK, USA) have plans to build new power reactors (beyond those now under construction).

Emerging nuclear power projects include: Bangladesh, Belarus, Kazakhstan, Lithuania, Poland, Turkey, Vietnam and others. Others are uprating existing reactors as a cost-effective way to expand nuclear power capacity, instead of planning new reactors at this time.

Nuclear Power And Uranium Fundamentals Remain Robust

Fukushima has affected nuclear power in the short-term, but only to the extent that projects needed to be safety checked. This pause in the pre-Fukushima uranium bull-market has severely depressed prices of uranium investments. This, despite the long-term growing need for more and more clean, low-cost energy, has at least produced nuclear safety improvements.

However, far from halting nuclear power generation in 2011, it is estimated that 170-million pounds of uranium were used while only 140-million pounds were mined. If this is the supply/demand equation during a year when many reactors globally were shut down to be stress-checked, imagine future uranium demand and prices as the world moves from 435 to 820 reactors!

Uranium supply has to catch-up quickly just to meet current demand! Past shortfalls have been met by the Megatons to Megawatts program, established by the USA and Russia to convert weapons-grade uranium into civil fuel. Most of this excess uranium is now gone, and unless renewed the program is scheduled to end in 2013. And some of the world’s largest uranium projects have seen delays, such as flooding at Cameco’s high-grade Cigar Lake mine now targeted to open in 2013. Unless prices move higher, BHP Billiton (NYSE: BHP) is likely to delay a $30-billion expansion at its Olympic Dam mine in Australia (world’s 2nd largest uranium mine), see July 29, 2012 report.

The bottom line remains that there is no reasonable alternative to nuclear power, and the growth fundamentals of uranium investments have never looked better. For bottom-fishers of gold, uranium (like URZ) and other metal resource stocks, you have to be asking yourself if the timing will ever be better than right now!

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