Fifty years ago, uranium fever hit Wall Street. It was then just a few years after a Navajo shepherd in New Mexico, by the name of Paddy Martinez, discovered “yellow rocks” on his home, mistaking them at initial for gold. An avalanche of 1950s dollars (more important than the ones we have nowadays) poured into mutual money and uranium mining shares, sending their values to astronomical levels. Get prepared for déjà vu all over once again, as Yogi Berra as soon as mentioned. Trend spotter, James Dines, editor of the Dines Letter, believes uranium mining stocks could grow to be just as hot, or hotter, compared to the Internet stocks with the 1990s. (Editor’s note: StockInterview.com interviewed James Dines on July 20, 2004, when he forecast a “buying panic in uranium.” Since then, place uranium (U3 08) prices have nearly doubled. Over the earlier 35 many years, Dines has successfully predicted mega trends in gold, internet, palladium and uranium price tag movements) And now traders are chasing uranium mining stocks once again.

A look at business leader, Cameco (NYSE: CCJ), which money manager Robert Mitchell called the “Saudi Arabia of uranium,” shows a three-year gain of greater than 700 %. Over the earlier few years, Australian-traded Paladin Resources, skyrocketed from under a dime to over $2/share (A$) A latest Forbes magazine cover story, entitled Going Nuclear, analyzed uranium’s recent price surge, “One reason the price of uranium must maintain escalating is the fact that producers are only starting to ramp up to meet the powerful demand. Utilities globally require 180 million kilos of uranium annually, but at this point a mere 108 million lbs are coming out of the soil.”

Why the sudden jump? A Morgan Stanley institutional report, published in December 2004, explained that with the 1990s, uranium oxide rates stayed reduced since surplus uranium came into the marketplace from weapons decommissioning. That surplus inventory worked its way with the market. The Morgan Stanley analyst forecast a “deep supply-side shortage” of uranium, citing that new mining production hasn’t yet appear online to remedy the deficit. Within the year-ago forecast, the uranium deficit was expected to grow to practically 20 million kilos this year (from a surplus of 6 million kilos in 2003), after which leap with a peak deficit of more than 35 million pounds in 2006. Deficits in excess of 30 million kilos have been also anticipated for 2007 and 2008. In accordance for the Morgan Stanley analyst, $50/pound may possibly be achievable within the spot price tag for uranium oxide, recognized within the trade as “yellowcake.”

Mining Newsletters Favor Strathmore Minerals

What’s that suggest for uranium stocks? Increased costs needs to be anticipated as a lot more traders, mutual resources and hedge resources lookup out the finest returns. Whilst the lion’s share of investment dollars is most likely to chase Cameco’s cost increased, the robust percentage gains in that stock may possibly have previously peaked. Typically, new funds searches for well-capitalized junior mining shares with solid uranium projects in their portfolio. Among individuals most often advised among mining newsletter writers is Strathmore Minerals Corp, trading around the Toronto Venture Exchange (ticker symbol STM.V) Prominent between Strathmore’s projects are in-situ leach mining operations proposed for Wyoming and New Mexico, plus an aggressive exploration program within the world’s richest uranium locations, Saskatchewan’s Athabasca Basin (residence to uranium mining giant, Cameco)

In September, letter writer Lawrence Roulston of Resource Possibilities suggested Canadian-based Strathmore Minerals (TSX-V: STM), writing, “The business is systematically adding value to the projects most probably being significant in the around phrase, specifically those people with near-term manufacturing potential.” Also in September, Resource Planet contributing editor, Alf Stewart, wrote, “The two deposits Strathmore is developing had been ‘cherry picked’ from the inventory of Kerr McGee, largest private explorer of uranium prior to that market grinding to some halt within the early 1980s. As these components are largely drilled off, Strathmore may be considered much more of your uranium development company than an explorer.” This past June, funds manager Adrian Day recommended uranium shares in his investigation report, writing, “So I am focusing on four principal locations in uranium, with a single or two buys in each… top exploration companies that have the goods and are likely to bring properties into manufacturing. Strathmore Minerals, with technically solid management, lots of qualities, and a solid balance sheet, is arguably the finest.”

New Uranium Discovery in the Athabasca Basin?

Here’s one of several stronger factors why investors might anticipate a solid rally in Strathmore’s share price more than the coming twelve months: In the November 16th news release (http://biz.yahoo.com/bw/051116/20051116005591.html?.v=1), Strathmore Minerals announced a discrete conductor, more than 30 miles lengthy, right after completing an airborne geophysical survey on the company’s Davy Lake house, inside the north central portion with the Athabasca Basin. In accordance towards the company’s news release, “The conductor’s profile response indicates a deep and in places, broad source.”

Practically all the considerable unconformity uranium deposits identified in the Athabasca Basin are directly connected with fault structures associated with graphitic conductors. Deposits this sort of as Key Lake, Cigar Lake and McArthur River were discovered by drilling electromagnetic conductors situated within magnetic lows.

In an interview with Jody Dahrouge, of Edmonton-based Dahrouge Geological Consulting Ltd, he told StockInterview.com, “Early indications are that this conductor is similar with other identified uranium deposits, graphitic conductors with magnetic lows.” On a scale of a single to ten, Dahrouge rated the Davy Lake conductor a ten. “It can be a lengthy conductor, cut by structures, with deep depth and connected by a late fault,” explained Dahrouge. “It is a high high quality conductor that continues to depth, and it is typical of those occurring which are linked with identified uranium deposits.” Dahrouge described how the MegaTem II airborne geophysical survey was capable to pinpoint the conductor as shallow as 600 meters and running deep to 1200 meters. Dahrouge made comparisons to other uranium deposits in the Athabasca Basin. “The Sue Deposit close to McLean Lake is associated with an electromagnetic conductor that is approximately 2.6 kilometers extended,” he stated. “Based on our operate at Waterbury Lake, we identified an 8 kilometers lengthy conductor associated using the Midwest Deposit(s) The ‘P2′ conductor at McArthur River is approximately 13 kilometers long. This feature was very first identified in 1984, by a soil Deep EM Survey. The Shea Creek deposits, based south of Cluff Lake, are linked with an approximately 25 kilometers long conductor, identified as the Saskatoon Lake Conductor.” Dahrouge added, “These deposits are based at depths similar to what we anticipate at Davy Lake.”

What is possibly most considerable is Strathmore’s gamble, by exploring away in the eastern parts of the Athabasca Basin, some 300 kilometers through the eastern Athabasca Basin, where the main discoveries have been produced. “It was essentially unexplored,” Dahrouge mentioned with excitement in his voice. “It’s truly virgin ground.” While there is certainly ample evidence suggesting numerous uranium deposits inside the Athabasca Basin, other junior exploration firms are looking at the shallow parts from the eastern basin, which may not probably yield economic uranium ore. 1 pundit acidly questioned some of the current exploration activity within the Athabasca region, “Are they actually re-flying old ground that’s already been flown a hundred times, or are they just releasing old data to save money?” Dahrouge pointed out that the uranium seems being running deeper for many from the newer discoveries, as he believes the Davy Lake home may possibly hold true for Strathmore Minerals within the north central part of the Athabasca Basin.

Crucial features in several Athabascan uranium deposits are the cross-cutting fault zones. Dahrouge confirmed the Davy Lake conductor has cross-cutting fault zones having a sinistral (left-sided) fault about halfway along its length. According to Dahrouge, there’s also a “conductor extension which crosses the fault from west to east and ‘flows’ out into a small, sub-circular magnetic lower.” As with numerous with the Athabascan uranium deposits, which tend to become discovered between overlying sedimentary units and underlying basement rocks, the Davy Lake conductor fits the bill. Strathmore Mineral’s president, David Miller, told StockInterview.com, “the 50-plus kilometer geophysical anomaly appears to indicate a basement conductor.” However, Mr. Miller tempered the exhilaration in the air, “A geophysical anomaly doesn’t make an ore body. These exciting initial outcomes will be followed up with infill geophysical lines, followed by ground geophysics, followed by shallow drilling, looking for alteration. When we have narrowed the target to drill, we will pull inside the big rigs and test the conductor at the unconformity.” Dahrouge remains excited about the Davy Lake conductor, and said, “Clearly this represents an superb exploration target for unconformity kind uranium deposits.

What does all that suggest? It could explain why Strathmore Minerals may possibly properly be around the road to a world-class uranium discovery as further exploration much more clearly defines how important individuals newly discovered conductors may possibly turn out to be. Meanwhile, Strathmore’s New Mexico and Wyoming qualities (amounting to potentially a number of million lbs of uranium resource) are within the preparatory phase from the permitting method. As the area uranium cost inches forward for the widely accepted short-term target above $40/pound, several of Strathmore Mineral’s properties might grow to be instantly much more valuable to a utility organization who will someday will need the company’s uranium oxide to fuel their nuclear reactor.

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