Want to bet your thumbs down came from a financial analyst? Maybe the one in question?
Every time I've dealt with one of these guys I come away shaking my head and thinking we're all doomed. They spend their mornings reading their emails and arranging lunch. They spend lunch #$%$ chatting with industry contacts. They spend their afternoons plugging numbers into spreadsheets so they can crank out an upgrade or downgrade for their bosses before the market closes and they head to the bar. They wear tasseled loafers and NEVER actually visit an industrial facility or learn anything about the industries they analyze. Pretty much how I see Iwanaka too.
Beyond that, what he's saying is explicitly wrong. Ask management whether lack of a permit slowed down operations and they'll look at you like you're a stuttering moron. We just lost 4 months of revenue, maybe $6 million in cash flow that might have come in handy for a small strategic acquisition this year, and a chance to verify our geologic models before the summer drilling program.
And how does having Cameco's phone number prevent screw-ups in a field of wells that have already been drilled? I'm thinking Captain Wrong went to the bar BEFORE he did his analysis.
Oh, well. Uranerz enters chapter two; we're producers now.
I've been totally honest about this. I've never met or had anything to do with anyone at UEC. I've never owned or shorted the stock. Looking strictly at management's track record I predict this stock will go to single digits and eventually stop trading, as have all their other companies. Just look at how many shares Adnani sells, over 490,000 last year, not counting shares held under other names. They put out optimistic press releases, then offload their shares onto a bunch of unsuspecting investors.
It's very easy for startup miners to put it over on the public. Who ever looks at their cores or logs? Vancouver specializes in fake startups. Canada suspended these guys for fraud. Do you suppose they came south to get religion? I find it amazing how many people will hand over their money to people they've never met to be invested in a business with no revenues in a place they've never been, thinking since the stock is listed it's got to be on the up and up.
I have no dog in this fight. I just didn't want to see you get hurt, because when the end comes there'll be no buyers for this stock. Today's press release was your chance to get out. There may not be many more.
I'm not a trader, but in that case, I would trade this on the short side, because the long trend has got to be down. This will be the 5th startup these guys have run into the ground without ever turning a profit, while they sell millions of shares to the unwitting public. Good trading. Stay short.
And when you called him, what did Higgs tell you?
As with Keystone, even if all studies and inspections and recommendations are positive it only takes a large political donor or luddite in a government office to stop a project. The permit has been in NRC's hands for over a month and the revised wording in their hands for over 3 weeks. I suggest you call the NRC, not Higgs.
I'd never heard of UEC until some goofball named jackpop touted it on the URZ board a few months ago at $1.75. So I researched it and told him what I found and forgot about it until about a week ago, when Jetty said he was buying UEC, so I came over to warn him about the company. I used to drill around Goliad, so I know the area, but I've never had anything to do with UEC and still have nothing to do with them. I don't own or short the stock. I just wanted to get Jetty out before it's too late.
I think the business is junk too. Ore grades are very low, much lower than other ISR mines.
If I were to walk downtown to Wyoming DEQ and file a permit request to mine uranium in my back yard I could send a press release to Newswire saying exactly the same thing UEC just said in their press release. It would be completely honest and completely misleading. While there are traces of uranium in my back yard, I would go broke trying to mine it.
I'm betting Amir Adnani sold another 100,000 shares this morning.
Completely different parts of the same industry. URG mines uranium, USU enriches it however, they face some similar problems: URG competes with private and government sponsored (Russian) miners, USU competes with private and government sponsored (French and Russian) enrichers.
Russia swings the big stick in enrichment. The rest of the world depends on them to such an extent non-Russian nuclear power is at the mercy of Vladimir Putin. If Vlad stopped enriching yellowcake it would take years for the west to build enough capacity to keep our civilian power plants operating. That's why some people think USU will survive no matter what, because the DOE wants their enrichment plant, whether they're bankrupt or not.
URG is going to survive. They'll fix whatever's wrong and ramp up production, however I disagree with Jesenus; this is not selling for taxes, insiders have sold more in shares than they've been paid and, if they're funding vacations they must be going to outer space.
Although I think it's necessary some miners will go bankrupt before this cycle ends, the only one about which I feel confident is UEC, not because uranium is too cheap, because their principal owners and managers are con artists with no experience in mining anything.
Correction; her argument wasn't "shut up", it was "idiot".
I'm guessing she majored in a romance language.
Well stated. Are you familiar with Milutin Milankovitch, long and short term solar activity cycles? I've tried explaining them to the arts and crafts crowd, to no avail. Some of them make it through eccentricity, but by the time I get to precession their eyes glaze over, and by the time I get to the data overlay of earth temperature and solar activity they're all at the other end of the room, whispering about my probable #$%$ heritage.
BTW, hope you weren't a USU shareholder.
I don't see $70 that soon. While projects were delayed (BHP put Olympic Dam on ice and Kazakhstan halted all new projects) when prices dropped below $45, it took sub $40 to bring about actual production cuts (which amounted to less than the new production CCJ will get from Cigar Lake) so I'm guessing when we get back to $40 those cuts will go away and once we get above $45 the project delays will go away. The world currently uses more than it produces, but I think mothballed production will come back and new production will come on well below $70. People do what's profitable. Most miners were making money at $45, so we'll only get to $70 if something creates a shortage.
Russia's Megatons to Megawatts obligation has ended, but their opportunity to profit by downblending and selling LEU remains. (I believe we continue shipping our own HEU to Russia for downblending, in addition to buying downblended Russian uranium.) As a strategic weapon, Putin could stop providing such services, but that would create a shortage of LEU, not yellowcake, hurting miners.
I think fewer than half of Japan's reactors will restart, let's say 15. The average German seems happy enough to pay higher power bills, so I'm not predicting they'll restart. Rosatom will supply all Russian and Russian customer country needs. Power generators in the US will continue to feel financial pressure due to the availability of cheap natural gas. As repairs are necessary nuclear plants will be decommissioned. Leaving China, commissioning what, 3 reactors per year, as the source of new yellowcake demand. Not enough to create a shortage.
This will turn around when we see junior miners sell out or go bankrupt. I would pick the lowest cost producers and think longer term. Remember Uranerz's recent statement they'll retain cash on hand and might return to the equities markets if they see an attractive opportunity? Crazy? Not if you have money. If you have money $33 spot can present opportunities.
I agree; many sellers in the month or so prior to their announcement about stopping production means they knew the problem was serious. I don't think they're dishonest, but they're leaving too many questions unanswered. It could be a buying opportunity - or not. For comparison, the total number of shares sold by a dozen URZ insiders over the past two years is ten-thousand shares - a heck of a vote of confidence.
This is the URG portion of something I posted elsewhere in response to Kinged:
Something's gone wrong at URG. Shutting down production after 5 or 6 months is not normal. Above ground plumbing isn't mysterious, in fact it's pretty standard stuff. It's hard for me to see them getting it wrong. On the other hand, if their geologic models were wrong and the flow from injection to production wells isn't working, it's possible they'll have to do a bunch more drilling and subsurface plumbing to fix the problem. Whatever it is, it's serious enough to make them borrow more and extend their payments. Should we be suspicious? Yes. Should we assume the worst? No, but I'm not buying the stock.
I've never met anybody at UEC, worked for them, or bought or sold UEC shares, so they haven't had any affect on me. In fact, until that jackpop character came along trying to convince us to sell URZ and buy UEC I'd never heard of them. I've learned since then.
Did you see "Wolf of Wall Street"? Canada suspended the chairman and CEO for fraud and unethical stock promotion. Then, with no gold mining experience, they raised tens of millions to mine gold and - went bust. Then, with no uranium mining experience, they raised hundreds of millions to mine uranium and - after years of operations their latest report says they have no immediate plans to start mining.
I don't believe people who get caught defrauding investors of millions of dollars reform themselves and don't do it again. I believe they learn from getting caught and refine their scams to avoid getting caught again. If UEC goes bankrupt, it will be the 5th company they've started and bankrupted without returning a cent to their shareholders. They aren't the worst fraudsters I've come across, but why would you give your hard earned money to someone whom the Canadians suspended for fraud?
At times I disagree with the way Uranerz manages its business but the people are real, their compensation is reasonable (I make more money than any of them.), their facilities are modest (You'd be totally unimpressed with their Casper office.) and competently run. I know this because I used to work in the area and before I bought a share of their stock I met them and took a look at their properties and facilities and, the day they quit taking my calls or can't answer my questions I'll start selling my shares.
URZ's operating budget for the year is only $9 million. That's how much profit they anticipated for the year (which is reasonable, given a $20/lb margin on their long term contracts, plus a $5/lb margin on production over 400,000lb. The CEO says specifically they will tailor their burn rate to match to their income, holding their $12 million in cash in reserve for potential acquisitions. (Acquire what? I don't know, but Catchpole may have anticipated the market and may think he can pick something up cheap this year, and he may be right.) The only potential fly in the ointment would be NRC's failure to deliver the verbally approved operating permit for Nichols Ranch. Could that happen? Could they study it for 5 years without signing? Repeat after me: Keystone, Keystone, Keystone...BLM has been withholding undisputed permits for oil and gas production since Mr. Obama became president. They do not refuse them, they just fail to approve them, and oil production from Federal lands has gone down as a result.
URZ has about 1.4 year's worth of cash on hand. Once the permit is signed URZ's management has said they can and will fund all operations via production.
Something's gone wrong at URG. Shutting down production after 5 or 6 months is not normal. Above ground plumbing isn't mysterious, in fact it's pretty standard stuff. It's hard for me to see them getting it wrong. On the other hand, if their geologic models were wrong and the crossflow from injection to production wells isn't working, it's possible they'll have to do a bunch more drilling and subsurface plumbing to fix the problem. Whatever it is, it's serious enough to make them borrow more and extend their payments. Should we be suspicious? Yes. Should we assume the worst? No, but I'm not buying the stock.
It only seems like there have been cutbacks; new production from Cigar Lake will exceed the announced cutbacks of which I am aware. We need someone serious to shut down before this will turn around.
I think you're wrong.
Russia exports $3 billion of uranium per year, far less than their nickel or uranium exports. Russian exports $60 billion of natural gas per year. Russia exports $255 billion of oil per year. To Russia, uranium is a trivial source of forex and Russia isn't necessarily the world's low cost producer. Dumping uranium into a weak market cuts Russian margins as much as everyone else's, whereas withholding uranium would increase Russian margins. At the same time it would make nuclear power more expensive for Europeans, allowing Russia to increase prices for its gas and oil exports, a far greater financial impact than selling a few million more pounds of uranium.
See where I'm going? Vladimir Vladimirovich has no financial or strategic reason to dump uranium on the market. He has several financial and strategic reasons to withhold uranium from the market. Vlad is much smarter and more imaginative than the current batch of western leaders. He has successfully taken Crimea. As a result of Stalin's crimes and decades of Russian policy, eastern Ukraine's population is majority Russian. They will secede and join Russia. There is no one in the west who will stop them. Vlad will have acquired a million square miles without firing a shot and will become even more popular in Russia than he now is.
Vladimir Putin is playing chess against people who can't even play checkers.
I see them very differently; URG has already produced and sold uranium; UEC is at least 2 years away from production (if ever); URG can tailor its exploration and development to its income; UEC has no income, is burning through $21 million/year and hasn't even permitted the mandatory deep disposal wells, which will cost them around $10 million; URG's management are selling some, but not nearly all their shares and have a reasonably successful track record in the industry; UEC's management are selling millions of shares each year and have bankrupted 4 companies in the past decade and been accused of securities fraud in Canada.
In short, URG has value as a going concern. UEC does not. URG is likely to succeed. UEC is likely to disappear, as have all Adnani's other companies.
Is this drop really warranted? URG is well financed, completely permitted and operational. The company has produced uranium and recorded enough revenue to convince me they can survive in the current environment and should prosper sometime in the future, when uranium prices increase.
I haven't bought into URG because we don't know what they got from Pathfinder. The deal was cheap, but they'll spend millions drilling and logging and, until we get the data, we won't know whether Pathfinder's properties are worth mining. Still, sometime this year the company will release positive results and continue drilling, or release disappointing results and go back to making a small profit from its Lost Creek operation.
So what am I missing? Why is the stock so weak and why are so many insiders selling?
Consideration of other readers.
If I want to discuss those companies I'll visit their message boards. Mentioning another company is one thing, spending multiple posts analyzing another company on this board seems misplaced and inconsiderate of the people who come here to read about UEC. Visit URZ and you can read my in depth analysis of that company, which has no bearing on UEC. I apologize for Jetty injecting URZ into this discussion. I consider him a digital friend and wanted to warn him about UEC, not sell him on URZ.
A few months ago some ignoramus invaded the URZ board in a worse fashion, trying to get us all to buy UEC at $1.75. He knew nothing about URZ and apparently didn't know much more about UEC.
I have no ability to read charts, so listen to King on where to buy, but I have noticed a very interesting difference between URZ and URG: URZ insiders have sold a total of 10,000 shares in the past 2 years. Yes, ten-thousand in two years. Whereas there's been quite a bit of insider selling at URG since the first of the year. (Nothing compared to UEC, where the insiders are selling millions of registered shares per year and no one knows how many shares held by their fully owned but unregistered offshore companies, but still no URG insiders are buying, just selling, and selling hundreds of thousands of shares.) URZ insiders are betting on the company. URG insiders not so much.