| NUCLEAR EXPANSION: A WORLDWIDE | | | | Russia's desire for a uranium/nuclear monopoly, |
| PHENOMENON | | | | hurricanes, tight supplies through the summer and |
| Yuri Sokolov, Department Head of Nuclear Energy | | | | the likelihood of yet another energy crisis before |
| for the United Nation's International Atomic | | | | Labor Day could spell a significant boost in spot |
| Energy Agency (IAEA), told reporters this past | | | | uranium pricing. It would not surprise us should |
| week, "There is plenty of uranium assuming the | | | | spot uranium trade closer to $60/pound over the |
| industry keeps moving ahead with exploration and | | | | next 100 days. Any "shock event" could spike the |
| new mines." Sokolov is confident the "identified | | | | spot uranium price above that level, and possibly |
| resources" of 4.7 million metric tons can be mined | | | | make a run for $100/pound uranium. |
| for less than $60/pound. But there was a warning | | | | Such a level would be unsustainable, of course, |
| buried in his speech. He cautioned that the major | | | | but it would be an eye-opener and attract |
| risk to uranium supplies would come from possible | | | | renewed interest in the domestic uranium mining |
| delays in moving from discovery to production. | | | | sector. The key domestic contenders for adding |
| Industry insiders understand it can take between | | | | new mining capacity in the United States appear |
| 12 and 20 years after a discovery to reach the | | | | to be Strathmore Minerals (TSX: STM; Other |
| production stage. | | | | OTC: STHJF), Uranium Resources (OTC BB: |
| Sokolov also set targets in the IAEA's annual Red | | | | URRE), Energy Metals (TSX: EMC), UR-Energy |
| Book. Depending upon how quickly the nuclear | | | | (TSX: URE.TO), and Uranerz Energy (OTC BB: |
| industry expands, more uranium will be required. | | | | URNZ). There are others, of course, but we have |
| By 2025, if global nuclear capacity increases to 22 | | | | not followed their developments as closely. |
| percent, utilities will need 80,000 metric tons per | | | | Should the Russians absolutely confirm there will |
| year. An increase to 43 percent would require | | | | be no HEU-2 deal, U.S. utilities will be driven to |
| 100,000 metric tons annually. The Red Book | | | | closely investigate working relationships with |
| forecast new mines, over the next five years, | | | | domestic uranium development companies for |
| would add about 30,000 metric tons to the supply | | | | reliable nuclear fuel supplies. As for market |
| inventories. This new capacity would fill the | | | | capitalizations versus pounds-in-the-ground, during |
| current uranium supply shortage. More new mines | | | | the last uranium bull market (in the 1970s), utility |
| would need to come online to keep pace with the | | | | companies were buying uranium companies for |
| heralded nuclear renaissance. Only the most | | | | about $5-6/pound of uranium. Some of our |
| cynical industry insiders would disagree that the | | | | favorite companies, which host historically reliable |
| uranium mining sector desperately needs a | | | | and NI 43-101 compliant uranium resources over |
| dramatic surge in production between 2010 and | | | | 100 million pounds, would be severely undervalued |
| 2020 to match the explosive growth ahead for | | | | under that comparable scenario. |
| this sector. | | | | StockInterview's "Investing in the Great Uranium |
| SUMMARY | | | | Bull Market: A Practical Investor's Guide to |
| Nuclear energy "hot talk" should also get a boost | | | | Uranium Stocks" debuts its e-Book edition this |
| in August and September, after the North | | | | coming weekend. The number of investors now |
| American release of James Lovelock's "Revenge | | | | following developments in the uranium sector has |
| of Gaia" (Basic Books). The 86-year old scientist | | | | grown exponentially over the past two years. |
| has led the charge among the world's | | | | The mad rush for data about uranium companies |
| environmentalists to get the greens to go nuclear. | | | | and industry developments has catapulted this |
| The international media has sought out Dr. | | | | website's traffic into the top five percent of all |
| Lovelock's opinions. Figure we'll see the same | | | | Internet websites. When the print edition arrives in |
| boost in "pro nuclear" going into the autumn. As | | | | bookstores and libraries, and is offered through |
| the author appears on numerous talk shows, the | | | | book clubs and other allied groups, the demand |
| polls should swing more heavily into building more | | | | for uranium and interest in the nuclear fuel cycle |
| nuclear plants. | | | | should make another leap forward. |