| Will we see a dramatic spike in uranium prices this | | | | ten hurricanes and up to six Category 3 or higher |
| summer? Some industry insiders have forecast spikes | | | | hurricanes. Dr. Gray's team estimates similar numbers, |
| that could send uranium soaring to between $55 and | | | | but places the brunt of the storms' impact on the |
| $100/pound. Most were not expecting this to occur | | | | eastern United States.Storms mainly cause panic. It is |
| during 2006. However, there are several reasons we | | | | the landfall which causes death and destruction. Using |
| believe something could crack wide open in the | | | | Steering Current Predictors, sea surface |
| uranium market over the next 100 days.RUSSIALet's | | | | temperatures, a 52-year statistical hindcast, North |
| take the Russian situation. U.S. utilities have been | | | | Atlantic and Arctic Oscillations and other parameters, |
| somewhat lackadaisical about uranium pricing because | | | | Dr. Gray forecast in his recent report, "The odds of a |
| they've been getting Russian uranium on the cheap. | | | | major hurricane making landfall along the East Coast |
| Russia's | | | | are more than twice the climatological average value |
| Rosatom head Sergei Kiriyenko has reportedly told | | | | this year." He forecast a 38-percent probability of a |
| U.S. utilities there will be no HEU-2 deal. Whether this | | | | major hurricane hitting land along the Gulf Coast this |
| is a ploy to extract a better deal for Russia, or | | | | year.The most chilling comparisons made in the |
| Russia's announcement it will feed other | | | | "Extended Range Forecast of Hurricane Activity for |
| nuclear-ambitious countries with its uranium is not | | | | 2006" were those which went unremarked by the |
| known.U.S. utilities are now lobbying the U.S. | | | | media. Dr. Gray compared Hurricane Season 2006 to |
| Commerce Department to end the restrictions on | | | | hurricane seasons in 1961 and 2004. Hurricane Carla in |
| importing enriched Russian uranium. They like the | | | | 1961 was ranked 3rd worst by barometric pressure |
| pricing, and are now arguing that higher uranium | | | | at landfall of all hurricanes entering the Gulf Coast. |
| prices are jeopardizing the nuclear renaissance in the | | | | The 2004 hurricane season brought Charley, Frances, |
| United States.Because of rising uranium prices, 85 | | | | Ivan and Jeanne, which were some of the most |
| percent of the utilities, which operate nuclear facilities, | | | | devastating U.S. hurricanes recorded. Such scenarios |
| have formed AHUG (Ad Hoc Utility Group) to | | | | would wreak havoc with already strained energy |
| terminate the import restriction. If AHUG | | | | prices, but would be good for the uranium mining |
| accomplished its goal, the loser would be USEC, which | | | | bulls. Gray concluded, "We believe that 2006 will be a |
| is now arguing on America's "overdependence" of | | | | very active season in the Atlantic basin." The more |
| nuclear fuel. USEC depends upon the Russian uranium | | | | active, the more likely a dramatic spike in uranium |
| to fund its future enrichment facility program. In a | | | | pricing.NUCLEAR EXPANSION: A WORLDWIDE |
| way, this amounts to corporate welfare. USEC is | | | | PHENOMENONYuri Sokolov, Department Head of |
| arguing against unlimited Russian uranium.U.S. utilities | | | | Nuclear Energy for the United Nation's International |
| are now being fed about 50 percent of their nuclear | | | | Atomic Energy Agency (IAEA), told reporters this |
| fuel from decommissioned Russian warheads. Russia | | | | past week, "There is plenty of uranium assuming the |
| is more than a tad upset because the deal they | | | | industry keeps moving ahead with exploration and |
| made does not reflect the current spot or long-term | | | | new mines." Sokolov is confident the "identified |
| price of uranium. Something will likely occur at the G8 | | | | resources" of 4.7 million metric tons can be mined for |
| Summit in St. Petersburg, Russia on July 14-17. Russia | | | | less than $60/pound. That's about 26 percent higher |
| will chair this summit for the first time.Expect | | | | than the current spot price. There was also a warning |
| fireworks. On the official G8 website, Russian | | | | buried in his speech. He cautioned the major risk to |
| President Putin announced, "Russia, as the presiding | | | | uranium supplies would come from possible delays in |
| country, regards it as its duty to give a fresh | | | | moving from discovery to production. Industry |
| impetus to efforts to find solutions to key | | | | insiders understand it can take between 12 and 20 |
| international problems in energy, education and | | | | years after a discovery to reach the production |
| healthcare." It should be noted that Russia is now the | | | | stage. U.S. utilities may get more aggressive to |
| world's second largest oil exporter behind Saudi | | | | secure supplies as this year and next pass by. Their |
| Arabia. Russia is also hoping to reach a deal in joining | | | | supply deficit for 2008 through 2012 requires a near |
| the World Trade Organization before the summit | | | | miracle to match demand requirements.Sokolov also |
| opens.We believe Russia may exacerbate the current | | | | set targets in the IAEA's annual Red Book. Depending |
| tight supply situation in the uranium markets and | | | | upon how quickly the nuclear industry expands, more |
| cause prices to rise after the summit. On June 9th, | | | | uranium will be required. By 2025, if global nuclear |
| Russia's news service Novosti reported the country | | | | capacity increases to 22 percent, utilities will need |
| would start constructing two nuclear power units per | | | | 80,000 metric tons per year. An increase to 43 |
| year inside Russia beginning in 2007. Kiriyenko also | | | | percent would require 100,000 metric tons annually. |
| announced Russia would ramp up to four or five | | | | The Red Book forecast new mines, over the next |
| nuclear reactors for 2009-2010. President Putin plans | | | | five years, would add about 30,000 metric tons to |
| to build an international full-service nuclear fuel center | | | | the supply inventories. This new capacity would fill |
| in Russia to provide enriched uranium for the growing | | | | the current uranium supply shortage, unless of course |
| number of countries wanting nuclear energy | | | | the industry is hit with delays. More new mines would |
| programs. It would be hardly likely Russia would | | | | also need to come online to keep pace with the |
| provide additional uranium to U.S. utilities in that | | | | heralded nuclear renaissance. Only the most cynical |
| context.TRADE TECH LLCWhat about going into | | | | industry insiders would disagree the uranium mining |
| Russia's G8 Summit? It appears uranium trading | | | | sector desperately needs a dramatic surge in |
| through June could continue to show a very tight | | | | production between 2010 and 2020 to match the |
| supply situation, where sellers continue to set pricing. | | | | explosive growth ahead for this |
| A recent posting on the Trade Tech LLC website | | | | sector.SUMMARYNuclear energy "hot talk" should also |
| announced the following:A number of buyers | | | | get a boost in August and September, after the |
| concluded transactions during May, which significantly | | | | North American release of James Lovelock's "The |
| reduced outstanding demand. The impasse between | | | | Revenge of Gaia" (Basic Books). The 86-year old |
| buyers and sellers ended this past month, with | | | | scientist has led the charge among the world's |
| buyers apparently reconciling their expectations with | | | | environmentalists to get the greens to go nuclear. |
| recent price increases and current offers. Sellers | | | | The international media has sought out Dr. Lovelock's |
| moved increasingly toward market-related pricing | | | | opinions. Figure we'll see the same boost in "pro |
| terms for spot delivery, and buyers showed a | | | | nuclear" media appearances going into the autumn. As |
| renewed willingness to accept these offers. | | | | the author appears on numerous talk shows, the polls |
| Exceptionally strong long-term demand continues to | | | | should swing more heavily into building more nuclear |
| exert upward pressure on the spot uranium price as | | | | plants. That could add further pressure on utilities to |
| each pound held by sellers is considered more | | | | quickly secure inventory.Russia's desire for a uranium |
| valuable with every new buyer that enters the | | | | nuclear monopoly, hurricanes, tight supplies through |
| market. At least one, and possibly two, uranium | | | | the summer and the likelihood of yet another energy |
| auctions are expected in June. Buyers are expected | | | | crisis before Labor Day could spell a significant boost |
| to compete aggressively for this material and | | | | in spot uranium pricing. It would not surprise us should |
| TradeTech expects uranium prices to continue their | | | | spot uranium trade closer to $60/pound over the |
| upward climb in June.Aggressively competing for tight | | | | next 100 days. Any "shock event" could spike the |
| uranium supplies lends credence to a possible rise | | | | spot uranium price above that level, and possibly |
| through the $50/pound level before the G8 Summit | | | | make a run for $100/pound uranium.Such a level |
| ends.ANOTHER BAD HURRICANE SEASONUnusually | | | | would be unsustainable, of course, but it would be an |
| bad weather drives up energy prices. This summer's | | | | eye-opener and attract renewed interest in the |
| hurricane season may be the equivalent to this past | | | | domestic uranium mining sector. The key domestic |
| winter's European gas shortages, which came | | | | contenders for adding new mining capacity in the |
| courtesy of the Ukraine/Russian squabbling and a bad | | | | United States appear to be Strathmore Minerals |
| European winter. Many countries began expressing | | | | (TSX: STM; Other OTC: STHJF), Uranium Resources |
| interest in a nuclear energy program after that | | | | (OTC BB: URRE), Energy Metals (TSX: EMC), |
| episode. Another climate event might compel more | | | | UR-Energy (TSX: URE.TO), and Uranerz Energy (OTC |
| to head for more nuclear.Over the past two | | | | BB: URNZ). There are others, but we have not |
| decades, hurricane watchers have learned to pay | | | | followed their developments as closely.Should the |
| attention to Dr. William Gray of Colorado State | | | | Russians absolutely confirm there will be no HEU-2 |
| University's Department of Atmospheric Science. | | | | deal, U.S. utilities will be driven to closely investigate |
| While based in hurricane-absent Fort Collins, Colorado, | | | | working relationships with domestic uranium |
| his atmospheric studies have proven Nostradamus-like | | | | development companies for reliable nuclear fuel |
| prescient over the past 22 years. Why are we talking | | | | supplies. Itochu has established a relationship with |
| about hurricanes? Hurricane announcements tend to | | | | Uranium Resources (UOTC BB: URRE), and we |
| drive up energy futures. The number of hurricane | | | | expect more of these joint ventures to materialize. |
| days adds pressure to an already tight energy | | | | As for market capitalizations versus |
| market. Hurricanes start to show up on an investor's | | | | pounds-in-the-ground, during the last uranium bull |
| radar during August and remain there through | | | | market (in the 1970s), utility companies were buying |
| September.Because of anticipated tight uranium | | | | uranium companies for about $5-6/pound of uranium. |
| supplies for June utility buying and the anticipation of | | | | Some of our favorite companies, which host |
| Russian fireworks in mid July, a fitting climax for a | | | | historically reliable and NI 43-101 compliant uranium |
| strong surge in uranium pricing might come along with | | | | resources over 100 million pounds, would be severely |
| a major hurricane hitting the Gulf Coast. Last year's | | | | undervalued under a parallel scenario.StockInterview's |
| Katrina can serve as a reminder that climate changes | | | | "Investing in the Great Uranium Bull Market: A |
| can impact energy prices, uranium included. Based | | | | Practical Investor's Guide to Uranium Stocks" debuts |
| upon the weather forecasts, we believe in the high | | | | its e-Book edition this coming weekend. The number |
| probability of an encore to last year's energy | | | | of investors now following developments in the |
| shortages.While this year's hurricane season is not | | | | uranium sector has grown exponentially over the |
| expected to match the devastation of 2005, it still | | | | past two years. The mad rush for data about |
| highly rates at 195 percent for a Net Tropical Cyclone | | | | uranium companies and industry developments has |
| Activity rating. Last year's first tropical storm, Arlene, | | | | catapulted this website's traffic into the top ten |
| formed on June 9th. This year's Tropical Storm | | | | percent of all Internet websites. When the print |
| Alberto formed a year and a day later. Exclude the | | | | edition arrives in bookstores and libraries, and is |
| busiest hurricane season in 154 years of | | | | offered through book clubs and other allied groups, |
| storm-tracking, and this year is expected to rate well | | | | the demand for uranium and interest in the nuclear |
| above the average hurricane season. The National | | | | fuel cycle should make another leap forward.James |
| Oceanic and Atmospheric Administration (NOAA) | | | | Finch contributes to and other publications. |
| estimated up to a total of 16 storms, as many as | | | | |