Targeted Strategies for Today's Evolving Markets

MissionIR Blog

The Greening Of Uranium

In 1932, Albert Einstein, considered by many to be the most influential scientist of the 20th century, made a startling prediction. Einstein, who years before had unlocked the possibility of virtually unlimited energy with his equation E = MC2, said confidently “There is not the slightest indication that nuclear energy will ever be obtainable. It would mean that the atom would have to be shattered at will.” Just 13 years later the world was blasted into the nuclear age with the detonation of the first nuclear explosion in the New Mexican desert, followed shortly by the obliteration of Hiroshima and Nagasaki Japan. The resulting deaths of between 150,000 and 246,000 people were a frightening confirmation that the power of the atom was indeed accessible.

Approximately 6 years after the creation of the bomb, nuclear generated electricity became a reality at a small test station in eastern Idaho. It only amounted to about 100 kilowatts, and was not even part of the grid, but it opened the door to a brand new source of controlled energy. It also spurred a new market for uranium, the dense gray metal originally used only for coloring glass and ceramics. Ironically, the United States was at first sluggish to push the new industry that it had invented. But, as operating nuclear power plants began to appear in the U.S.S.R. and Europe, America soon jumped on board, and in a big way.

It wasn’t long before the U.S. was producing more nuclear power than anyone, though it still only represents about 20% of the county’s total electrical production (France produces about 78% of its electricity from nuclear reactors). Uranium was riding a huge and global nuclear energy wave, a wave that crashed in the 1980s as people began to focus on concerns about safety and environmental issues relating to nuclear power plants. The nuclear accidents at Three Mile Island in Pennsylvania, and later at Chernobyl, effectively shut down the growth of nuclear power in the U.S. and much of the world. The reduction in nuclear weapons resulting from the end of the Cold War seemed to be a final nail in uranium’s coffin.

By the turn of the millennium, the collapsing price of uranium had made exploration and development a distant memory. But then something happened, a change in the perception of energy generation so fundamental and widespread, that it was like a hand reaching down and pulling nuclear energy from the grave. It can be argued that the savior of nuclear power can be summed up in two words: Global Warming.

As concerns about the potential long term effects of fossil fuels began to grow, governments around the world came under increasing pressure to find alternatives. Solar and wind and other energy sources have long been promoted, but only nuclear energy has already proven itself on a large scale as a consistent source of reliable power. All this as China and other nations began to flirt with free market economics, growing their productivity and associated demand for energy. The result was inevitable. Uranium, once on the environmental movement’s hit list, was suddenly taking on a shade of green.

Today, dozens of new nuclear power plants are under construction in places like China, India, and Russia, and there is an estimated uranium supply shortfall of 80 million pounds per year. The U.S., once a major uranium producer, long since overshadowed by places like Canada and Australia, is again in the uranium business. In North America, publicly traded uranium exploration and development companies include the following.

• Cameco (NYSE:CCJ) – Based in Saskatchewan, and one of the largest
• Golden Patriot Corp. (GPTC.OB) – Uniondale, NY, based uranium development company, with projects in Arizona and Nevada
• Uranium International Corp. (URNI.OB) – London based uranium mining company with operational offices in New Mexico, and projects in Sweden
• Black Hawk Exploration (BHWX.OB) – California based exploration company with properties in Canada and the U.S., though currently focused on gold and lithium

One of the newest, and most remarkable such companies, is Texas-based Uranium Energy Corp (NYSE-AMEX: UEC). The company, headed by a management team made up of entrepreneurs and industry experts from some of the most successful companies around, controls one of the largest databases of historic uranium exploration and development in the country. The one-of-a-kind uranium site database has allowed them to quickly identify and target for acquisition properties that have the best chances for immediate production, properties that could increase dramatically in value as uranium demand continues to grow. UEC is well financed, unlike many uranium exploration and development companies, and appears to have one of the best chances to take off as uranium continues its transition from gray to green.

Let us hear your thoughts:

This entry was posted in Small Cap News. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *