Investors Chasing Uranium Mining Stocks Again A Favorite Emerges
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Investors Pursue Uranium Mining Stocks: A New Favorite Emerges
Summary
Fifty years ago, a Navajo shepherd's accidental discovery of uranium in New Mexico sparked a frenzy on Wall Street, driving investments in uranium mining stocks to unprecedented heights. Now, this enthusiasm is returning. Trend spotter James Dines predicts that uranium stocks could rival the internet stock boom of the 1990s. Investors are once again flocking to this sector.
Article
Half a century ago, Wall Street experienced a surge in uranium investments when a Navajo shepherd in New Mexico named Paddy Martinez stumbled upon yellow rocks he believed were gold. The rocks turned out to be uranium, igniting a wave of investment that saw stock values soar. This fervor is resurfacing, as noted by trend spotter James Dines, who predicts that uranium mining stocks might soon be as popular as the tech stocks of the late '90s. Dines has a history of forecasting major trends in commodities such as gold, palladium, and uranium.
Leading the pack is Cameco (NYSE: CCJ), described by money manager Robert Mitchell as the "Saudi Arabia of uranium," with its stock gaining more than 700% over three years. Similarly, Paladin Resources in Australia saw its shares leap from under a dime to over $2. A Forbes article titled "Going Nuclear" attributes the rising uranium prices to increasing demand, noting that while global utilities need 180 million pounds annually, only 108 million pounds are being mined.
The price surge is largely due to the end of surplus uranium from weapons decommissioning in the '90s. A 2004 Morgan Stanley report forecast a growing supply shortage, predicting a deficit of 35 million pounds by 2006. Analysts suggested that yellowcake prices could reach $50 per pound.
Strathmore Minerals: A Promising Contender
As uranium prices rise, investors are eyeing junior mining stocks with promising projects. Strathmore Minerals Corp (TSX-V: STM), a frequent recommendation among mining newsletters, is gaining attention. With proposed in-situ leach mining operations in Wyoming and New Mexico and exploration in Saskatchewan's Athabasca Basin, home to Cameco, Strathmore is well-positioned.
In September, Lawrence Roulston of Resource Opportunities highlighted Strathmore's potential, noting its focus on properties with near-term production potential. Resource World contributing editor Alf Stewart acknowledged Strathmore's cherry-picked projects from Kerr McGee's inventory. Money manager Adrian Day also recommended Strathmore for its strong management and extensive projects.
New Discoveries in the Athabasca Basin
In a promising development, Strathmore Minerals announced a significant discovery on its Davy Lake property in the Athabasca Basin. An airborne geophysical survey revealed a 30-mile conductor suggesting a high-quality uranium deposit. Jody Dahrouge, from Dahrouge Geological Consulting Ltd, rated the conductor a ten out of ten, likening it to other known uranium deposits in the region.
What sets Strathmore apart is its exploration in previously untapped areas of the basin, offering a fresh opportunity in "virgin ground." This strategy contrasts with other companies revisiting well-explored areas. Dahrouge noted that new deposits tend to be deeper, aligning with Strathmore’s findings at Davy Lake.
Strathmore Minerals' president, David Miller, emphasized that while these initial results are promising, further exploration is needed to confirm an ore body. The company's properties in New Mexico and Wyoming, potentially containing several million pounds of uranium, are in the permitting process. As uranium prices continue to rise, Strathmore's assets may become increasingly valuable to utility companies seeking fuel for nuclear reactors.
In summary, Strathmore Minerals holds significant potential for a major uranium discovery, benefiting from its strategic exploration and rising uranium prices. This makes it a strong contender in the industry as investors return to the uranium market.
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