A Uranium Miner with Strong Potential As the world population continues to grow, its impact on the global environment increases as well. Many of the world’s leading energy users, like China, are starting to shift away from coal. Many reports indicate China will ramp up nuclear facility production over the next decade, a bullish indication for uranium investing. As uranium investing through the commodity can be difficult, the easiest method is through mining stocks. Nations such as China and India need massive amounts of energy over the next decade. Only through nuclear power and, ultimately, uranium investing can they keep up with their growing needs. While they do use traditional fossil fuels like coal, the amount of pollution in some parts of these countries is extremely large. Not to mention nuclear energy is more efficient than coal. Emerging markets have extensive plans to grow their nuclear facilities and uranium investing and mining stocks should benefit. One of the more interesting mining stocks for uranium investing is UrEnergy Inc. (AMEX/URG, TSX/URE). This is one of a few junior uranium mining stocks with tremendous potential as exploration and development firms. When looking at junior exploration mining stocks, there are always risks to the project development schedule. UrEnergy is currently working on completing its needed permits for bringing the Lost Creek mine into production. The company expects to build a processing facility that can handle two million pounds per year. UrEnergy recently announced that it has received the Final Environmental Impact Statement from the Bureau of Land Management with the statement that the Drying Yellowcake OnSite Alternative is the bureau’s recommendation. This statement will go into the record of decision, which should be released shortly. All mining stocks need proper environment assessments and approvals. Uranium investing can be risky, and all government regulations must be strictly adhered to. Over the next month, the company will be reviewing the logistics and timetable for the construction of the project. The company believes that it will take six to nine months to construct these facilities, with production commencing in the first half of 2013.
Chart courtesy of www.StockCharts.com Mining stocks in general have been hit with high levels of volatility this past year. Uranium investing through junior mining stocks can be fraught with danger, but it also offers large upside potential. Since the time lags between exploration, development, and production, uranium investing is best viewed from a longterm perspective. One good piece of news is that the stock has breached and held its 200 day moving average (MA). While the Relative Strength Index (RSI) has become slightly overbought during the recent runup, the move is now being consolidated on a higher plane. If construction plans go as scheduled, this stock could see significant upside potential over the next year. Of course, any problems with this process could cause the stock to sell off, a possibility for those interested in uranium investing through mining stocks to consider. While I wouldn’t jump to invest in this name right now, I would keep my eye on mining stocks when looking at uranium investing. Mining stocks in this sector are going to get more attention over the next few years. Certainly, the world is not shrinking from energy use. We know of many new nuclear facilities being built, which will cause the demand side to go up, a bullish sign for uranium investing. While one must be careful when looking at mining stocks, I do think one should keep
an eye on this sector, as uranium investing has tremendous potential over the next decade.