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Riding The Wave With Today's
Junior Uranium Companies by Glenn
Wilkins - AllPennyStocks.com News Reporter
May 5, 2006 (AllPennyStocks.com Media, Inc.) - It all
started with a letter from Albert Einstein in 1939. The
scientific giant, then teaching at Princeton University, was
writing President Franklin D. Roosevelt, extolling the virtues
of uranium as the substance of a weapon that would
revolutionize war, and urging America's Chief Executive to put
the creation of such a bomb in motion - before Adolf Hitler
got the same idea, and acted on it.
Now, with nuclear power again figuring in the news - what
with Iran building up its nuclear program to go with its
dominance in the petroleum world - new attention is again
being focused on uranium.
Nor are such companies the big behemoths; some can be
purchased for a song, and provide investors with that thrill
of taking the elevator from the main floor to the upper
echelons.
Spot uranium prices are now at levels they haven't seen in
more than a quarter-century, and many believe uranium prices
will head higher in the months ahead, mostly due to this
improved perception of nuclear power as an alternative.
Equity research companies are coming out with reports these
days, concentrating on more than 30 junior and mid cap
explorers and development companies are identified with a
total market capital exceeding $7 billion (all figures in U.S.
dollars unless specified otherwise).
Over the past two years, the number of companies looking
for uranium has jumped over 700 per cent. At last count, there
were upwards of 150 such explorers.
As it did when Dr. Einstein addressed his historic missive
to FDR at the dawn of World War Two, Canada remains
uranium-rich. About one third of the world's uranium mine
output comes from Canada, most of it from two new mines,
production that is only supposed to increase by the end of
next year. Many of these mines operate in Saskatchewan and
Alberta, near the Northwest Territories.
Other countries rich in this substance include Australia,
Namibia, Mongolia and the U.S. A closer eye is being focused
on companies out of those countries that are making strides in
finding uranium, processing it and selling it.
Among them is Fronteer Development Group (TSX:FRG,
AMEX:FRG), which claims a creative and scientific approach
to identifying the most promising target sites - and to
quantify the scale and size of what those sites yield. FRG's
Aurora Energy Resources subsidiary has located undeveloped
uranium deposits in Labrador, and has devoted $14.5 million
Canadian to find them. FRG traded in early May around $6.50.
Also of note is CanAlaska Ventures (TSX-V:CVV),
a company that has been extremely busy in the Athabaska region
of Saskatchewan. Since September 2004, the Company has
assembled one of the largest exploration portfolios in the
region, and a competent and proven technical team. CanAlaska
has discovered multiple zones of uranium mineralization in one
area, while surface alteration was correlated with surface and
airborne geological targets on another. Its stock last traded
around the 60-cent mark Canadian.
International Ranger Group (Pink
Sheets:IRNG), also has a lot of momentum behind in the
search for uranium, being particularly active on the Whiskey
Gap property in Southern Alberta. More recently, IRNG has
joined with North American Gem to expand its immediate area of
interest in Alberta to more than 240,000 acres. IRNG is in
about the middle of a 52-week trading range from seven to 26
cents.
An agreement between Australia and China that clears the
way for uranium sales to China is expected any day now.
Chinese investment in Australian uranium juniors is likely to
follow. Security of uranium supply is paramount to China's
expanding nuclear power industry, and cost is a secondary
issue.
One Australian firm that hopes to reap the rewards of this
landmark deal is Paladin Resources (TSX:PDN),
which, since early 1998, has been active in the Kayelekera
Uranium Deposit in Malawi, keeping an 80-per-cent interest,
with fellow Perth junior, Balmain Resources, holding the
remaining 20-per-cent. Later that same year, Paladin took over
the Manyingee and Oobagooma uranium ISL deposits from Cogema
Australia. Since 2000, Paladin has been scaling back its
exploration in Australia proper, though it has retained its
interest in the Angela property near Lake Frome.
Paladin Resources is now trading towards the upper reaches
of a 52-week range between 86 cents and $4.33 Canadian, still
in bargain territory.
The uranium parade marches on, with the volatile state of
the world, and with nuclear energy gaining greater acceptance.
Small cap investors looking to diversify into this expanding
field should look hard and look quickly when considering this
sector.
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