| Bad weather may be heading our way. Many very | | | | Bambrough also calculated how much uranium would |
| smart voices have raised their volume over the | | | | be required to fuel those reactors. |
| number of alarming red flags pointing to a worldwide | | | | According to Bambrough, current global uranium |
| environmental catastrophe coming in a few years or | | | | mining production rests at about the 100 million-pound |
| decades hence. One voice, coming from the sharp | | | | level. By 2030, if nuclear energy expands as Moore |
| mind of James Lovelock is resounding across the | | | | insists it should, then the world's utilities will require on |
| world's media nearly every day. His solution: get more | | | | the order of about 1.3 billion pounds every year. With |
| nuclear reactors online and sequester the carbon | | | | regards to a planetary build-up of nuclear energy, |
| dioxide emissions as fast as possible. | | | | Bambrough wrote, "The supply of uranium may well |
| What's the alternative? Move to the Arctic Circle, | | | | be the most limiting factor." |
| where you may someday bask year around with | | | | This may become the new case for a sustained rally |
| temperatures pleasantly at 74 degrees Fahrenheit. | | | | in the spot uranium price. Bambrough wrote, "Much |
| According to findings recently published in the journal | | | | higher uranium prices will be required to attract |
| Nature. About 55 million years ago, there was | | | | enough investment capital to meet the growth in |
| something called the Paleocene Eocene Thermal | | | | demand." This has already begun, as uranium prices |
| Maximum (PETM). In this PETM phenomenon, the | | | | have skyrocketed for the past six years. Long-term |
| entire Earth was heated up by a gigantic release of | | | | uranium recently traded as high as $46/pound, |
| greenhouse gases, like carbon dioxide. Lovelock has | | | | exponentially higher than the spot price of $6.40 |
| insisted we may see that kind of hot later this | | | | pound in late 2000. Bambrough is correct in his |
| century. | | | | conclusion. Building an underground uranium mine costs |
| Now, another brainy man, with whom we have many | | | | far more than it did in the glory days of uranium in |
| chats this year, has issued a special 56-page report, | | | | the 1950s. Environmental regulations force miners to |
| entitled "Investment Implications of an Abrupt | | | | spend more and take longer in constructing any |
| Climate Change." Co-authored by Market Strategist | | | | uranium-producing facility, including an ISL operation. |
| Kevin Bambrough and Eric Sprott, Chief Executive | | | | "Marginal mines will become price setters," wrote |
| and Portfolio Manager of the world-famous money | | | | Bambrough. This helps explain why the Sprott Asset |
| management firm which bears his name, they | | | | Management funds have invested heavily in |
| present a compelling argument as to why and how | | | | companies such as Strathmore Minerals (TSX: STM; |
| global warming and climate change is going to | | | | Other OTC: STHJF), Energy Metals (TSX: EMC) and |
| dramatically impact our financial world. You are well | | | | others. When we first interviewed Strathmore |
| advised to read it. | | | | Minerals Chief Executive, Dev Randhawa, in June |
| Take Your Pick: Nuclear Energy or Cheap Arctic Land | | | | 2004, he told us his strategy was to capitalize upon a |
| Aside from optioning to buy vast tracts of land near | | | | sustained rally in the uranium price by acquiring |
| the Arctic Circle, as Dr. Lovelock's conclusions force | | | | properties which were uneconomic at the sub-$20 |
| us to briefly consider, what can we do to protect | | | | level. His strategy has rewarded shareholders and |
| our finances? Global warming, climate change and an | | | | continued to do so with each uptick in the spot |
| apocalypse soon to dawn on the horizon are | | | | uranium price. If Bambrough's conclusion is accurate, |
| probably too much reality for the here and now. But, | | | | the junior uranium developers could very well become |
| what will you do ten to thirty years from now? This | | | | the Internet high-fliers. That conclusion was reached |
| past week, we interviewed Julian Steyn, author of A | | | | by newsletter writer James Dines, this past |
| Brighter Tomorrow, which he co-wrote with U.S. | | | | November, and repeated numerous times in multiple |
| Senator Pete Domenici. A conservative and rational | | | | reports by others. |
| man, even he admitted in an email, "I am afraid I do | | | | "Large low-cost producers may be able to reap |
| agree with his (Lovelock's) concerns." | | | | Middle East-like oil profits for decades," wrote |
| If one finds logic within the statistical analysis | | | | Bambrough. If the spread between production costs |
| presented by the United Nations Intergovernmental | | | | and spot uranium keeps widening, the smaller uranium |
| Panel on Climate Change (IPCC), a rational mind would | | | | companies are going to hit it big. Those companies, |
| want to start protecting his finances today in order | | | | which postponed uranium mining, will be selling their |
| to ensure future survival for his family and lineage. | | | | uranium production at the kind of |
| Esteemed scientists have picked their way through | | | | profits-to-production spread ExxonMobil or |
| mountains of statistics, charts and projections about | | | | ChevronTexaco now enjoy. |
| what is happening with melting glaciers, rising | | | | Rising uranium prices are probably more of an |
| temperatures, higher sea levels and so forth. They | | | | irritation for fuel traders than the utilities, who worry |
| do not like what they see, they are not alone, and | | | | about construction costs. The actual fuel cost to |
| the better minds are not endorsing wind farms or | | | | operate a nuclear power plant borders on the absurd. |
| solar panels as "the solution." They see nuclear fission | | | | Bambrough wrote in his report, "Fuel costs (for |
| reactors as mandatory, and the faster these go | | | | nuclear) are merely 4.5 percent of total costs, even |
| online, the less we will later have to sweat (literally). | | | | with uranium at $40 per lb. If uranium rises to $100 |
| Eric Sprott and Kevin Bambrough have laid out a | | | | per lb (a further 150 percent increase), the cost of |
| possible solution, a cogent thesis as to why we must | | | | nuclear power would only rise by approximately 6.75 |
| stop fooling around now. They didn't write the report | | | | percent." Fuel costs for coal and gas are 35 and 73 |
| to alarm and cajole you to lynch the next | | | | percent, respectively. And they release massive |
| environmentalist or anti-nuke whom you come across. | | | | doses of CO2 into the air. |
| Messrs. Sprott and Bambrough provided a blueprint of | | | | What else can be done aside from a worldwide, |
| what must be done by governments and | | | | unanimous endorsement of nuclear energy? There |
| decision-makers. More importantly, they have given | | | | may still be difficulties ahead. Lovelock told us the |
| us extremely provocative advice on HOW to protect | | | | CO2 emissions problem should have been addressed |
| our finances during the brewing crisis. | | | | 50 years ago. It takes between 50 and 100 years for |
| Remember, it won't just be some meteor hitting the | | | | the atmosphere to cycle through those emissions. |
| earth (although that might happen, too). Global | | | | The Sprott report co-authors concluded there will be |
| warming is tantamount to boiling water on your | | | | supply problems for food, water and energy. They |
| stove. First, it gets warm, then warmer and warmer. | | | | envision problems with national security, soaring grain |
| Eventually, it gets hot. Then, the water boils. In other | | | | prices, and greater investments needed to provide |
| words, the catastrophe will brew for a while, causing | | | | water and energy to those who aren't buried ten |
| political and economic instability, and a host of other | | | | feet deep in their indebtedness. They foresee a |
| ills, probably better described in biblical terms. Most of | | | | currency collapse as central banks flood the money |
| us, unfortunately, will wait until the next Hurricane | | | | system to provide liquidity. And, of course, gold will |
| Katrina is a few miles down the road before waking | | | | resume the role it has always held during times of |
| up. | | | | overpowering economic calamity. |
| Through the first half of the report, the authors | | | | Is this too much reality for you? Should we just wait |
| cover global warming and climate change, in just | | | | a while and see what transpires? We might not be |
| about every way imaginable. Messrs. Sprott and | | | | so lucky. Some experts, such as the Chief Claims |
| Bambrough found nooks and crannies which may | | | | Strategist for Swiss Re, wrote in a March 2006 |
| alarm you. Did you know the world's largest aquifer, | | | | CERES report, "Global warming has accelerated from |
| the Ogallala aquifer in the United States, is drying up | | | | a problem that might affect our grandchildren, to one |
| because the glaciers, which created this aquifer, are | | | | that could significantly disturb the social and economic |
| receding? Fresh water is already in short supply for | | | | conditions of our lifetime." |
| one-third of the world's population. We may be | | | | In other words, Messrs. Sprott and Bambrough are |
| surrounded by water, but could lack a glass of fresh | | | | correct in their assumptions and conclusions. The time |
| water to drink. Ask the Saudis why they are building | | | | to get moving is today, not thirty years from now. |
| desalination plants as fast they can. Imagine if those | | | | For a second opinion, before completing this column, |
| arid conditions prevailed across more than 90 percent | | | | we forwarded the Sprott report to David Miller. He |
| of the landmass of earth. | | | | wears many hats, including a consultancy to the |
| What happens as the earth's temperature goes up? | | | | International Atomic Energy Agency, third-term |
| Increased urbanization, growing GDPs and demand | | | | Wyoming legislator, president of Strathmore Minerals |
| for all the niceties that come with "civilization" have a | | | | (TSX: STM) and a walking encyclopedia on uranium, |
| price: more CO2 emissions. Deadly CO2 emissions, | | | | geology, nuclear power and politics. He responded |
| which raise the earth's temperature, poison our air | | | | quite bluntly, "The fuel of the 19th century was coal. |
| and kill our plants (and us), are very likely going to | | | | The fuel of the 20th century was oil. Both have run |
| turn this earth into a potboiler before the century | | | | their economic course. Uranium is on its way to |
| ends. | | | | becoming the energy fuel of the 21st century. The |
| Nuclear Expansion Needs More Uranium "This IS the | | | | crescendo of countries clamoring for nuclear energy |
| perfect storm," Kevin Bambrough warned, not as the | | | | has been growing louder in each year of this new |
| abused cliché the term has become, but as | | | | millennium." Perhaps, we may yet see Moore's energy |
| an angry voice demanding decision-makers take to | | | | mix come to pass, or at least dramatic growth in the |
| heart the gravity of CO2 emissions. "We need more | | | | nuclear sector to more closely approach his targeted |
| nuclear reactors now," he told us. He directed us to | | | | percentage level. |
| environmentalist Patrick Moore's contention that the | | | | One key question remains unanswered, during our |
| U.S. should reverse its energy source mix from an | | | | two-year investigation into uranium and nuclear |
| 80-percent dependence upon fossil fuels, relying | | | | energy. Sure, we've gotten a lot of answers, but we |
| instead upon nuclear energy for 60-percent of our | | | | remain unconvinced. No one has satisfactorily |
| electrical power supply. | | | | answered this question: "Will there be sufficient |
| Under the former Greenpeace co-founder's scenario, | | | | supplies of 'already mined uranium' and current mining |
| Bambrough extrapolated the World Nuclear | | | | production available to the world's nuclear reactors to |
| Association (WNA) projections for 2030. Nuclear | | | | meet the anticipated global demand for electricity?" |
| power demand is then expected to soar from the | | | | The make-break word in the above question is |
| current 368 Gw, produced by the world's 441 nuclear | | | | "available." Uranium is nearly everywhere. There are |
| reactors. He computed, using Moore's premise of a | | | | about 1.7 billion pounds of 'already mined uranium' in |
| 60-percent nuclear-reliance, that nuclear reactors | | | | the world's inventories. But will there be enough |
| would produce 18,900 Twh of the total power | | | | uranium made available to the utilities when the time |
| demand in 2030, which the WNA estimates might | | | | comes? |
| reach 31,500 Twh. To produce that much electricity, | | | | If there is not, today's spot uranium price could look |
| Bambrough calculated that by 2030, nearly 2700 | | | | comparable to gasoline prices, circa 1965, at some |
| nuclear reactors will be required across the planet. | | | | future point. |
| Envisioning the "potential" of a 600-percent increase | | | | COPYRIGHT © 2007 by StockInterview, Inc. |
| in nuclear reactors online, about 25 years from now, | | | | ALL RIGHTS RESERVED. |