"...no near or medium term impact on the uranium market." When you perfect your inflatable nuclear power plant or figure out how to build one in anything less than 5 years let us know. Until then, India's nuclear plans will have no near or medium term impact on the uranium market.
Uranerz does not now, nor has it ever had operations in Texas or New Mexico. Uranerz has not been sued over groundwater or other pollution. Uranium sands are almost always much deeper than the base of treatable water, meaning the fluids used in, and produced by in situ mining never come in contact with fresh water aquifers unless they are stored in surface ponds and leak out. Uranerz injects its wastewater into deep disposal wells.
The most generous thing I can say is someone has no clue about that which he writes.
Last summer Australia signed an agreement to supply India with all the uranium it might need for the foreseeable future. The Indian liability issue centered on foreign companies designing, fabricating, or assembling nuclear components for civilian reactors, not for companies supplying uranium. This agreement has no near or medium term impact on the uranium market.
UUUU owns 6 mines, a handful of prospects and 500,000lb of yellowcake. Pinenut is active but 5 previously active mines are on "standby" waiting for higher prices. It costs $17/lb of recovered uranium to truck Pinenut ore to White Mesa and return the slag. White Mesa's operating cost is about $10/lb. UUUU's cost per pound for Pinenut uranium must be at least $30. Pinenut will play out in H1 2015 and go on "standby". At that time UUUU will have 700,000lb worth of annual contracts and no producing mines.
If the Navajos don't succeed in stopping them, UUUU's $14 million cash will barely bring Roca Honda into production in 2 years, a year after their stockpiled uranium will run out. What's the company to do?
Buy URZ, get 3 more contracts, fill the combined 950,000 pounds of annual contracts in 2015 from UUUU's 500,000lb stockpile, the remains of Pinenut's and Nichols Ranch's ramped up production, show operating earnings of $0.70/share, watch the stock double, issue more shares to pay for further conventional exploration and to develop URZ's ISR-amenable properties for cash flow.
Who benefits? UUUU and URZ executives with large holdings to cash in a year from now, and UUUU's managers, who get to keep managing something for a few more years.
Who loses? $1.60 URZ warrant holders. URZ's 2015 Q2 should have supported $1.60+ per share. Now, depending on management's calculations, UUUU will need to hit $7.50-$8.00 to make the warrants worth exercising. They will conveniently expire before that happens.
Is it worth holding URZ? Holding til conversion earns you 10%, down from 33% and, under further scrutiny, the premium may disappear altogether. Hold until 2016 and if the Annual Report is worded carefully and the Japanese cooperate and investors continue believing UUUU's "standing by" conventional mines aren't worthless and you might double your money. But, what if Roca Honda isn't permitted?
I'd have held URZ long term, but not UUUU. The question now is when to sell.
Ever visit wise-uranium.org? I sent Catchpole thanks last fall for keeping us off the list of shame. Imagine how I feel now.
White Mesa: Various Indian tribes, the Grand Canyon Trust and Federal government are suing UUUU over ground water pollution. UUUU says it doesn't think the suit is important. Google Grand Canyon Trust to see what they think.
Canyon Mine: More Indians and environmentalists are suing the Forest Service for allowing UUUU to build a mine 10 miles south of which widely loved tourist attraction?...the Grand Canyon! Yes! Just 10 miles from Bright Angel Lodge! UUUU says it doesn't think the suit is important, that's not why they stopped construction shortly after finishing the mine's headworks. Google Sierra Club and Earth Justice to see what they think.
Sheep Mountain: UUUU is proposing an open pit mine in the middle of Green Mountain elk, Sage Grouse, and Spotted Bat essential habitat, but the Federal Government insists it not disturb any area not already disturbed by the underground mine abandoned almost 30 years ago. Yes, Sheep Mountain holds 30.3 million ounces of uranium, but its concentration is 0.12%, meaning you've got to excavate, crush and leach half a ton of ore to recover a pound of uranium, and you've got to do it on site because 1) the Federal government opposes building more roads that would "further bifurcate Sage Grouse habitat", and 2) it costs $0.28/ton-mile to haul ore to a mill and the nearest mill is?...White Mesa - 550 miles away. ($0.28 X 550 = $77 per pound of uranium). Why hasn't UUUU built a Sheep Mountain mill? Because, if permitted, it would cost $150 million.
Wonder why there's only 1 uranium mill left in the US? Google Atlas Uranium. Gone are the days when you could dig a hole in the ground, leach acid all over and dump tailings wherever you wanted. I doubt most of UUUU's prospects will ever be permitted and suspect rehabilitating just the 6 mines UUUU has in "standby" mode would bankrupt the company.
Timing is everything. A few days ago I was in Casper, planning to drop in on the company and talk about the future, then - this hit the fan, and everyone's busy and encumbered by legal constraints and there's no information to be had. Everyone, no matter who, must wait for the conference call. So, I'm waiting.
I quit this forum because it was being used by some to manipulate others, causing them to make trades that benefited the manipulators. Instead of a source of information it had become a source of misinformation. I said I'd post again when I thought I might be selling my shares. It will depend on what I hear on the call.
After years of chasing financing and diluting shares, things were looking better for Uranerz. The company had finally put Nichols Ranch into production and with very low operating costs, the company had reached financial stability. It could preserve its 20 million pound, 0.11% low cost asset base and survive by filling only its medium term contracts instead of selling into the spot market - as long as prices improved by 2018.
Now this. Why?
I understand why Energy Fuels is doing it; it's a matter of survival. Energy Fuels bet on $80 uranium and things haven't worked out. They closed most of their mines years ago because they weren't viable when uranium was $50. Instead, they survived by buying uranium on the spot market to fill their $58 contracts, using the $20-$30 spread to maintain their mill and mines. Now, with the spot price of uranium rising what's a marginal hard rock miner to do? What happens when the spot price rises to $60 and Energy Fuels is forced to sell at a loss to fulfill its contracts?
That's why Energy Fuels wants Uranerz, a ready source of $28 uranium.
Why does Uranerz want Energy Fuels, the owner of a half dozen shuttered, litigated, challenged, depleted hard rock mines holding 22.8 million pounds of uranium contained in ore grades averaging 0.3% and the last remaining hard rock mill in the US?
That's the right question.