As Uranium Price Turns, Insiders Stock Up on Energy Fuels

Source: The Energy Report 03/23/2017 View Original Article Analysts watching the uranium market agree that as prices for U3O8 turn around, Energy Fuels’ U.S.-based assets, including its conventional and in-situ recovery operations at the Canyon Mine and Nichols Ranch, respectively, make it a good bet for investors. The company’s management team and directors must agree because they have upped their share ownership. In a letter to shareholders that Energy Fuels Inc. (EFR:TSX; UUUU:NYSE.MKT) released on March 16, President and CEO Stephen Antony cited trends he believes bode well for uranium producers like Energy Fuels, including production cutbacks by major producers including Cameco in 2016 and Kazakhstan’s state-owned Kazatomprom in early 2017. “I would contend that when the World’s largest and lowest-cost uranium producers are feeling the pain of today’s prices, you know this current market pricing is categorically unsustainable,” Antony wrote. Other signs that uranium prices will soon turn around include increased demand for U3O8 as new reactors come on-line, the demand for clean energy sources, and the American desire for energy independence. Antony concluded his letter by noting that he and other members of the company’s management team and board of directors had recently purchased additional shares of Energy Fuels stock. “We believe in this company, we believe in a uranium price recovery,” he wrote. Though Rob Chang of Cantor Fitzgerald acknowledges the challenges Energy Fuels has faced in coping with depressed uranium prices, he states in a March 10 research report that “we continue to view Energy Fuels … Continue reading

Fission Uranium's Exploratory Drilling Hits Success Right Out of the Gate

Source: Ross McElroy for The Energy Report 03/23/2017 View Original Article With uranium up 40% off last year’s lows, a glimmer of optimism is returning to the uranium market, says Fission Uranium’s President, COO and Chief Geologist Ross McElroy. In this interview with The Energy Report, McElroy discusses the company’s latest drill results, its winter drilling plans and why he believes Fission could be on the cusp of a major discovery. The Energy Report: Uranium hit lows this summer before recovering somewhat, although the uranium price is still well below the highs of several years ago. Would you discuss the fundamentals for uranium and your predictions for the price over the next several years? Ross McElroy: We saw the spot price of uranium hit a multiyear low of about $18 per pound ($18/lb) in late November/early December 2016. But we’ve also seen, in the short period from the beginning of December up until currently in March, the spot price recover to close to $25/lb. That represents a price increase of about 40% over just a few months. Of course, $25/lb is still a very low price. At the low end, the major low-cost producers, primarily the Kazakhstan producers and Cameco Corp. (CCO:TSX; CCJ:NYSE), one of the world’s largest uranium producers, sent signals to the market—by reducing low-cost production and shutting in higher-cost production—that they’re not selling uranium any cheaper than that. Those are among the lowest-cost producers worldwide. It has gotten to a point where even they can’t make any … Continue reading

NexGen's Mineral Resource for Arrow Highlights 'Once-in-a-Career Type of Asset'

Source: The Energy Report 03/23/2017 View Original Article NexGen’s latest mineral resource estimate for the Rook I property has caught the attention of industry analysts. Earlier this month, NexGen Energy Ltd. (NXE:TSX; NXGEF:OTCQX) released an updated mineral resource estimate for the 100%-owned Rook I property in Canada’s uranium-rich Athabasca Basin. The estimate includes Indicated resources of 179.5 million pounds (179.5 Mlb) of U3O8 in 1.18 million tonnes (1.18 Mt) grading 6.88% U3O8, including the high-grade A2 core of 164.9 Mlb of U3O8 in 0.40 Mt grading 18.84% U3O8. The Inferred resource estimate is 122.1 Mlb in 4.25 Mt grading 1.30% U3O8. The company noted that the 2016 drilling has “converted 89% of the March 2016 Arrow Deposit Maiden Inferred Mineral Resource into the updated Indicated Mineral Resource category. This level of conversion is truly unprecedented, which continues to confirm the strong continuity of grade and thickness seen across the Arrow deposit converted.” Paradigm Capital analyst David Davidson noted in a March 7 research report that “NexGen’s discovery of the Arrow uranium deposit represents one of the larger and highest-grade discoveries in the Athabasca basin in decades. After only three years of drilling, the company released an updated NI-43-101 indicated & inferred resource of 5.5 Mt grading 2.5% U3O8 for a contained 302Mlb of U3O8. Additional drilling in all likelihood will expand the resource, which should allow for a potential development scenario.” Looking ahead, Davidson added, “NXE is well into its planned 35,000m 2017 winter drill campaign and we remain convinced … Continue reading

Canaccord Genuity Releases Sustainability and Special Situations Watch List

Canaccord Genuity has released the second edition of its Sustainability and Special Situations Watch List, featuring five companies in the sustainability sector. Analyst Raveel Afzaal of Canaccord Genuity profiles five companies that he believes should be on investors’ radar. The first company is Pioneering Technology Corp. (PTE:TSX.V), which designs and produces fire prevention products. Its SmartBurner helps prevent cooking fires, the number one cause of fires in the home. “Smart burners incorporate thermostats to regulate the temperature of the burners within a safe range. In 2016, it expanded its multi-residential sales channels to strengthen its first-mover advantage in this market and realized EBITDA of $1.7M (up143% Y/Y). Management expects continued strong revenue growth of ~50% in 2017,” writes Afzaal. UGE International Ltd. (UGE:TSX; UGEIF:OTC) is also profiled on the Watch List. The firm offers cheaper solar energy with no upfront costs to commercial customers. “UGE prereleased Q4/16 revenues of US$3.5M compared to cumulative revenues of US$2.5M over prior four quarters as it digested the acquisition of Endura (an EPC [Engineering, Procurement & Construction] firm). With integration complete, UGE is forecasting sharp revenue growth in 2017 based on its 12 to 18 months contracted backlog of US$35M,” comments Afzaal. Ecosynthetix Inc. (ECO:TSX) made the Watch List for the second time. The company uses a bio-based polymer to replace formaldehyde in wood composites. The EPA has finalized a regulation to limit formaldehyde in wood products. Afzaal writes that EcoSynthetix is in “advanced stage industrial trials with more than five of the industry’s … Continue reading

High-Impact Drilling Will Test Pan Orient's Indonesian Field

High-impact drilling on Pan Orient Energy’s East Jabung project in Sumatra, Indonesia, is slated to begin by the end of March. Talisman Energy, a subsidiary of Spanish major Repsol SA, will test Pan Orient Energy Corp.’s (POE:TSX.V) East Jabung field in Sumatra. Pan Orient acquired the property in 2011. PiercePoints in ValueWalk noted that Pan Orient Energy “used seismic surveys the last few years to uncover a massive reef and clastics drill target—which could be one of the biggest onshore discoveries of the decade. . .independent engineers appraised [the project] as having a best likely size of 149 million barrels equivalent—absolutely huge for an onshore project. “ Talisman “executed a farm-in deal with Pan Orient where it will pay 100% of the costs for an exploration well in order to earn a 51% interest in the project,” commented PiercePoints. “That’s a lot smaller interest than majors usually demand for a carried well. Leaving Pan Orient with a full 49% ownership in the project—equating to 73 million barrels equivalent upside in the best case forecast by reserves engineers—while this junior sits back and watches Repsol pay to test the prospect.” In his What is Chen Buying? What is Chen Selling? newsletter, Chen Lin noted that “Talisman/Repsol owns the block just to south of it and knows the area and its geology well. The decision of drilling these two wells was made by Repsol one year ago when oil was at 30 dollars.” Lin also noted that he is surprised that Pan … Continue reading

Investors Are Becoming Bullish on Commodities

Investors are increasingly turning to commodities as prices rally. Dow Jones reported that the S&P GSCI Index, a measure of commodity futures, was up 28% last year: “many commodities have continued to rally this year. Oil and natural-gas prices have soared more than 50% over the past 12 months. Precious metals like silver and materials like lumber have scored big gains in recent weeks.” Citigroup noted, according to Dow Jones, that “commodity assets under management globally rose 7% in January from the previous month to $391 billion, up more than 50% compared with the previous year.” “The Materials Price Index, which tracks oil, metals, lumber and other commodities, closed higher for a record 17 straight weeks before finally falling in the last week of February,” Dow Jones reported. Investors are becoming more bullish on economic growth, hoping that President Donald Trump’s $1 trillion infrastructure pledge will come to fruition. Bloomberg reported that deal-making is starting to pick up in the metals arena: “Transactions announced in the first two months of the year climbed 41 percent to $7.6 billion from a year earlier, according to data compiled by Bloomberg. That’s the best start to a year since 2013, before gold and copper entered bear markets. Premiums for the deals announced in February averaged 33 percent, the highest since August, data show.” “Investors poured about $4.9 billion into exchange-traded funds that track materials companies in the three months through March 3, beating funds linked to technology firms, according to data compiled by … Continue reading

Oil Market Update: You Won't Get a Clearer Warning Than This One

Technical analyst Clive Maund charts changes that portend a “brutal decline” in both the oil and precious metals markets. This quick update on oil is to point out that the latest oil COTs and Hedgers positions were at frightening extremes, as oil has struggled and failed, thus far, to break higher. This is viewed as meaning trouble—BIG TROUBLE—for the oil market, where we could see a precipitous drop as in 2014. First, we review the latest 6-month chart for light crude, on which we see that oil has tried again to break above the line of resistance in the $55 area at the top of a triangular range and, so far, failed, and the quite large gap between the moving averages and weak momentum (MACD) are viewed as additional bearish factors. . . On oil’s latest COT chart, we see that the usually wrong Large Specs are raving bullish, while the Commercials now hold record heavy short positions. . . Meanwhile, the latest Hedgers chart, which is a form of COT chart going back much longer, shows positions at “off the scale” extremes. Even right before the 2014 bloodbath, they were not as extreme as they are now, and they were seriously extreme then. Chart courtesy of www.sentimentrader.com Meanwhile, oil stocks are not at all confirming the bullish attitude of Large Specs in the oil market. While oil itself has held up, oil stocks have gone into retreat. Superficially they look like a buy here, because on the 6-month chart … Continue reading

Oil Prices Surge and Investors Become Bullish in Wake of OPEC Deal

With OPEC producers complying with a deal to reduce output to address the oil glut that drove prices down in 2016, the oil price has rebounded above $55 per barrel, and investors are optimistic about a bullish energy market. According to a Reuters report today (Feb. 27), “Oil prices rose on Monday as investors showed record confidence in prices rising further, though gains were capped by the prospect of faster growth in U.S. oil production.” U.S. oil exports are also up. In an article published Feb. 23, Bloomberg’s Sheela Tobben reported that “producers and traders shipped out 1.21 million barrels of crude a day from the U.S. in the week that ended February 17, the most in Energy Information Administration data going back to 1993.” According to the report, domestic output was 9 million barrels per day in the week ending Feb. 17, and U.S. stockpiles swelled to record levels. What wasn’t being refined in the U.S. was being exported. “For now, U.S. crude is looking especially attractive to buyers in Asia,” the article states. A CNBC article published Feb. 24 notes “oil prices have gone up in February, while energy stocks have gone down,” and investors “have been piling into crude futures.” The article states that “factors supporting crude at the moment include OPEC’s production cut, a possible Saudi Aramco IPO, and seasonal demand starting to pick up in the United States. . .The downside factors include U.S. shale producers aggressively pumping, and the potential for a producer like … Continue reading

Energy Fuels Provides 'Strong Leverage to Potentially Increasing Uranium Prices'

Uranium has risen 30% from the very low prices of late last year and a trio of analysts agrees that Energy Fuels is in position to take advantage of a rising price environment. Uranium’s 30% rise from the low of $17.75/lb on Nov. 30, 2016, is fueled by a number of supply and demand factors that has industry watchers optimistic that the tide has turned. On the supply side, Kazakhstan’s state-owned Kazatomprom announced in January that it would cut production by 10%; the company supplies 40% of the world’s uranium. The company also announced the opening of a trading office in Switzerland. That could help placing the material in the market on a more orderly basis. Justin Chan, an analyst with Numis Securities, told Proactive Investors that “Kazatomprom’s establishment of Swiss marketing arm suggests that inventory management may become a policy tool. An inventory policy rather than direct supply would see it act as more of a swing producer or swing seller, using inventory and production levels to influence the uranium price.” Industry watchers also found hope in Rick Perry’s Senate confirmation hearings as U.S. Secretary of Energy in January when he said that he would take a hard look at the Department of Energy’s practice of bartering uranium. This bartering is believed to place between 5 and 8 million pounds of uranium into the market annually. On the demand side, there are currently 60 nuclear reactors under construction worldwide and another 160 planned, according to the World Nuclear Association, … Continue reading

Jack Chan: Buy Zones in an Oil Bull Market

Technical analyst Jack Chan charts the latest moves in energy market, noting a major buy signal. $OSX is on a major buy signal, which can last for months and years. COT data is supportive for overall higher oil prices. Our trading model identifies the buy zones in a bull market, simple and effective. Crude oil is flagging, which suggests a breakout soon. Oil stocks are consolidating in a falling wedge, which also suggests a bullish resolution. SummaryThe energy sector is on a major buy signal. Prices are now in our buy zone. We are holding energy sector ETFs for long-term gains. Want to read more Energy Report articles like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent articles with industry analysts and commentators, visit our Streetwise Articles page. Jack Chan is the editor of simply profits at www.simplyprofits.org, established in 2006. Chan bought his first mining stock, Hoko Exploration, in 1979, and has been active in the markets for the past 37 years. Technical analysis has helped him filter out the noise and focus on the when, and leave the why to the fundamental analysts. His proprietary trading models have enabled him to identify the NASDAQ top in 2000, the new gold bull market in 2001, the stock market top in 2007, and the U.S. dollar bottom in 2011. Disclosure: 1) Statements and opinions expressed are the opinions of Jack Chan and not of Streetwise Reports … Continue reading