Mining the Newsletters for Uranium-Part II

Continuing our investigation into the mysterious uranium mining stocks I introduced yesterday, we’ll be looking at three more today. I was going to do all four, but due to space considerations I felt that three would more than suffice. Plus, I want to toss in my two cents on this entire sector, so that will have to wait until tomorrow.

As we go through this I’ll show you just how old is the information in the newsletter I’m dissecting. Apparently they’ve been using the same come-on for at least a couple of years and haven’t even bothered to update their info. I guess it must be working for them! I want you to note this the next time you get one of these undated come-ons as the information provided and the returns they promise might not be valid, in part or at all.

Enough of my admonitions. Let the sleuthing begin!

Clues to the Second Uranium Mining Stock:
1. Over 10 years ago when uranium was an unloved commodity and dirt cheap, this company bought up rights to uranium deposits that had been explored and confirmed, but not yet mined.
2. Today, the company owns the rights to 86 million pounds of uranium, most notably the Athabasca Basin in Canada to deposits in Peru.
3. It has acquired 900,000 acres of uranium properties in Alberta.
4. It owns the rights to 17.5 million pounds of uranium in New Mexico.
5. Another global Fortune 500 company, a $13 billion Canadian mining company, is looking to get in on the deal.

The newsletter claims that this company is on course to become the largest uranium producer in America, and that if you buy it right now you could reap four times your money. What is this stock?

Well, if you were looking for one company, you won’t find it. That’s because it’s now two companies. The parent is Strathmore Minerals. Last year, it spun off its Canadian and Peruvian properties into Fission Energy Corp. (not to be confused with Fission Energy LTD, an Aussie concern) while retaining its U.S. properties in Wyoming, New Mexico and S. Dakota. (See how dated this information is?) Both are Canadian companies and trade on the Toronto stock exchange as STM.V and FIS.V. They also trade over-the-counter here as STHJF and FSSIF, albeit thinly.

So, should you buy these? They both hold attractive reserves in stable countries–always a plus. I guess the question is how they plan to get the ore out of the ground. Their stock prices are roughly tied to the price of uranium. In June 2007, uranium hit its high of $140/lb. Since then it’s lost nearly half its value, and is currently trading at $75/lb. This price movement is directly reflected in the price of these stocks. My newsletter claims that because of the forecasted heavy demand, uranium is cheap even at $500/lb. I guess it all boils down to what you believe. The competition in this sector is increasing by leaps and bounds and a surfeit of uranium could keep the price depressed, just like any other commodity. For more info on both companies, visit their company websites: and

This website also has good info on Strathmore:

BTW, the $13 billion Canadian company is Cameco.

Clues to the Third Uranium Mining Stock:
This is an easy one. All this company does is buy and hold uranium, and claims to be sitting on 4.2 million pounds of it. What is it? It’s a closed end Canadian fund called Uranium Participation, also called Uranium Corp. It, too, trades on the Toronto exchange and also in this country as URPTF. Since it’s illegal for an individual to actually possess the radioactive metal, this is as close as you can get to owning it outright. It’s the purest uranium play I’ve seen. If you’re interested in buying it, I’d suggest snapping it up when the fund price falls below its Net Asset Value (NAV). The NAV is calculated monthly. As of Jan. 31st, its NAV was Canadian $9.70 or about $8.30 US. The stock is currently trading around $11. To find its NAV, check out their website:

Clues to the Fourth Uranium Mining Stock:
1. This company is sitting on proven reserves of 51 million pounds in the 7th largest deposit in the Southern hemisphere.
2. The company has only the historical price of its assets recorded on its books (when uranium was $10/lb)–a value of $31.7 million. The actual price of the assets is $6 billion. (I have no idea how they get this figure and they don’t say.) They translate this value into stock price, claiming that the stock should be worth over $200 instead of $25, its current price.

There’s not a lot to go on here considering the vast number of mining companies in the uranium universe. And, since we don’t know when they wrote this, the stock price could be a lot greater than $25/share or a lot less. I hate to say this, but they got me on this one.

So far: Me three, Them one.

That’s it for today. Tomorrow, the fifth dangling carrot will be revealed. In the immortal words of Larry Sanders, “No flipping!”

Posted by Dr. Kris at 11:37am PST

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