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Investing in Uranium: Playing the Recent Slump in Prices

Thursday, October 11, 2007

Investing in Uranium: Playing the Recent Slump in Prices

Investing in Uranium

The price of Uranium has been extremely volatile over the past year from a high of just over $300 (USD) per Metric Tonne in June of 2007 to a recent low of $75 (USD) per Metric Tonne as of October 11, 2007.

Uranium charts on

This price drop has drastically affected major Uranium producers with some stock prices dropping by half. As the world commodity boom and demand for energy continues to escalate, it is time to invest in Uranium while stocks are extremely cheap to reap the benefits of the rebound in Uranium prices.

Many analysts have stated that Uranium has hit a bottom and is ready for a rally as Demand from China, India and other expanding economies will continue to drive prices higher. Investors thinking about playing this scenario should look to Canada for Uranium investment opportunities as Canada is the largest producer in the World.

As a result of the price slide in Uranium there are many great bargains to invest capital. The following investments may be appropriate for those who believe in the long term appreciation of uranium prices:

Cameco (CCO): The stock is currently over 30% below its recent high in June.

Cameco is the worlds largest producer of uranium concentrates. Cameco Corporation (Cameco) is primarily engaged in the exploration for and the development, mining, refining and conversion of uranium for sale as fuel for generating electricity in nuclear power reactors in Canada and other countries. Its mines are principally located in the uranium-rich Athabaska basin in northern Saskatchewan.

The Company has a 31.6% interest in Bruce Power L.P. (BPLP), which operates the four Bruce B nuclear reactors in Ontario. The Company wholly owns Zircatec Precision Industries, Inc., whose primary business is the fabrication of nuclear fuel bundles. Cameco's 52.7% subsidiary Centerra Gold Inc. (Centerra) is involved in the exploration for and the development, mining and sale of gold. Cameco has four segments: uranium, fuel services, nuclear electricity generation and gold. In June 2006, the Company acquired a 19.5% interest in UNOR Inc, whose principal properties are 226 mineral claims in northwestern Nunavut on the Hornby Basin.

Dension (DML): The stock is currently trading at over a 60% discount from its 52 week high.

Denison Mines Corp. (Denison), formerly known as International Uranium Corporation, along with its subsidiary companies and joint ventures is engaged in uranium exploration and production. The company’s principal assets are a 22.5% interest in one of the world’s largest uranium facilities at McClean Lake in Northern Saskatchewan and a 25.17% interest in the Midwest Uranium Project. Denison also has embarked upon an active exploration program at the McClean, Midwest, Wheeler River, Wolly, Waterfound and Mongolia properties.

Denison also acts as manager for Uranium Participation Corporation. Uranium Participation Corporation is a publicly traded company that is involved in the buying, holding and selling of uranium in concentrates.
Further, Denison is engaged in mine decommissioning and environmental services through its Denison Environmental Services (DES) division.

Uranium One Inc. (UUU): Currently trading at over a 22% discount to its 52 week high..

Uranium One, Inc., formerly SXR Uranium One Inc., is engaged through its subsidiaries in the acquisition, exploration and development of properties for the production of uranium in South Africa, Australia, Canada and the United States and gold in South Africa. The Company owns 70% of the operating Akdala Uranium Mine in Kazakhstan and is also developing the South Inkai and Kharasan Uranium Projects in Kazakhstan. Uranium One owns the Dominion Uranium Project in South Africa, as well as the Honeymoon Uranium Project in South Australia. In the United States, Uranium One has extensive property holdings in Wyoming, Texas, Utah and New Mexico, including the Shootaring Canyon Mill and the Hobson ISR facility. Uranium One is also engaged in uranium exploration activities in the United States, the Athabasca Basin of Saskatchewan, South Africa, Australia and the Kyrgyz Republic.

Paladin Resources (PDN): Currently trading at of a 40% discount to its 52 week high.

Paladin Resources is an Australian uranium exploration and development company. Paladin Resources Ltd operates in the resource industry, with a principal business of evaluation and development of uranium projects in Africa and Australia. Its wholly owned projects include the Langer Heinrich Uranium Project, which is located in Namibia, Southern Africa, and hosts surficial, calcrete type uranium deposit; the Kayelekera Uranium Project, which is located in northern Malawi, Southern Africa; the Manyingee Uranium Project, which is located in the north west of Western Australia, and hosts sandstone deposits, and the Oobagooma Project, which is located in the West Kimberley region of Western Australia, and hosts sandstone deposits. Its joint venture with Quasar Resources Pty Ltd covers two exploration licenses in the northern Frome Basin in South Australia.

An investor that wants be diversified within Uranium investments may want to consider investing in an investment vehicle such as The Uranium Participation Corporation (, which invests the majority of its assets in uranium.

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