Opinion
Guest Commentary: Nuclear power critical to climate fight
The
Ferrybridge C coal-fired power station, near Knottingley in northern
England. Britain is to signal the winding down of polluting coal-fired
power plants, indicating they should be replaced with gas and nuclear
stations. (AFP/Getty Images)
The U.S. has greatly benefited from a shale revolution that has yielded billions of barrels of oil and gas. This has brought enormous economic benefits to America and made our nation less dependent on foreign sources of energy. However, there is another key consideration: taking greater responsibility in providing cleaner energy to the world. I'm fully expecting the U.S. government to lead by example by becoming more proactive in addressing air pollution and carbon emissions. This will help drive increased use of renewables. But it also must lead to the U.S. recommitting to modern nuclear power in a big way.
This is a notion that actually appears to be taking root. For example, the White House recently recognized that nuclear energy must be a "vibrant component of the U.S. clean energy strategy." The Department of Energy launched Gateway for Accelerated Innovation in Nuclear to support advanced nuclear designs with a clearer and faster path toward commercialization, something that should further solidify the role nuclear power will play in the president's new Clean Power Plan.
Nevertheless, public moves by Washington in recent weeks that support the nuclear industry are very encouraging. Nuclear power currently provides 63 percent of U.S. low-carbon electricity and remains the only low-carbon, low-emission source of baseload electricity that realistically can be expanded on a sufficiently large scale to replace pollution-emitting coal and natural gas power plants. While cheap natural gas has played a role in reducing air pollution, nuclear energy is a cleaner option. Moreover, there is no guarantee that natural gas prices will remain near 40-year lows. If we are serious about cutting air pollution, meeting our 2020 carbon targets, and also becoming energy independent, nuclear energy and domestic uranium production cannot be ignored.
Perhaps there could be a major effort by the utility sector — encouraged by the government's growing recognition of the value of nuclear energy — to maintain and upgrade, rather than close, existing nuclear power plant infrastructure.
Countries like China, India, and South Korea see what lies ahead, and there are hundreds of billions of dollars lining up for new nuclear projects around the world. It would be a shame to see the U.S. further surrender its leadership role in the growing nuclear sector.
Stephen Antony is president and CEO of Energy Fuels, a Lakewood-based integrated uranium mining company.
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Posted by Nick Hodge
on Wednesday, 12 November 2014 07:35
I've been pounding the table on uranium for some time now.
Over history, investors who have made the biggest gains have shown time and again that you need to buy when everyone else is selling. You need to buy what everyone else hates. You need to buy what no one else will.
And ever since the earthquake-induced disaster at the Fukushima Daiichi nuclear plant, there have been few admirers of nuclear and uranium, and even fewer buyers.
Indeed, though they had already been sliding from their June 2007 cycle highs near $137 per pound — spurred by the flooding of the Cigar Lake Mine — after the tsunami and subsequent shuttering of all 48 reactors in Japan, the bid simply disappeared from under uranium spot prices.
Ultimately, uranium spot prices fell all the way to $28 per pound this past summer, a level not seen since May 2005.
Uranium prices at these levels are unsustainable. They must go higher.
When they do, uranium stocks will move much higher as well. And the companies with proven deposits boasting high grades and shallow depths will move higher by many multiples.
That's the natural cycle of things. You just have to be aware of it and be willing to buy a hated sector in anticipation of the profit cycle changing direction.
History to Repeat
For example, when uranium prices spiked over 400% from 2005 through 2008, junior uranium miners and exploration companies added as many percentage points, or better.
Again, when uranium spot price rebounded by 47% in 2010 and 2011, uranium mining stocks soared even higher.
Now, we're on the verge of the cycle turning over once more.
2015: Uranium Profit Cycle?
I honestly don't know when the momentum will truly shift. I just know it has to, or utilities won't be able to sustain 14% of global electricity production.
Chairman of Sprott U.S. Holdings and legendary resource investor Rick Rule put it bluntly in an interview with CEO.CA alongside Sprott's Vancouver Natural Resources Symposium in July:
When I look at a theme now like uranium, I am perfectly comfortable with the fact that it might take 5 years to be right. I have come to learn that asking myself investment questions where the answer begins with when, not if, is a very good trade.
With no Japanese demand and high supply from decommissioned nuclear warheads, nobody wanted to be the first to buy.
In the uranium business now, industry costs including cost of capital is about $70, so you produce for $70 and sell it for $30 and lose $40. You cannibalize existing capital in corporate vehicles and that goes on until they go broke, and then the price shoots just like it did last decade. That’s a question that begins with when. When does the dam break? It’s not if. Does the price of uranium go up or do the lights go out?
That's starting to change.
Exelon (NYSE: EXC) is the largest nuclear utility in the U.S., which is the largest nuclear power market in the world. It recently started buying large quantities of uranium at the bottom of the market.
That goaded buying interest in other utilities like Southern, Duke, and FPL.
As a result, uranium spot prices have now surged 40% off their summer lows of $28/lb to nearly $40/lb.
And can you guess what uranium stocks are doing?
58 years in the making... veteran energy expert introduces:"Peak Profit Cycles"It's predicted trades big enough to turn
every $1,000 into $4,025,000(And it could do so again in the next few weeks!)http://www.angelnexus.com/o/web/66541?lloct=3&r=1"Prices can only go one way, and that's up."
— Jim Rogers on "Peak Profit Cycles"
Dear Reader,
Hi, my name is Brian Hicks, and I’m the President and Owner of Angel Publishing.
Normally, I stay behind the scenes here at Angel managing the day-to-day operations.
But an esteemed colleague of mine, who I’ll introduce in a moment, recently told me about a hidden phenomenon in the markets... one so potentially profitable that I’m making a rare public appearance to spill the beans on it today.
During this brief presentation, you’ll find out how my colleague — a veteran energy expert — uncovered this unusual phenomenon...
Using a 58-year-old scientific formula with a proven track record of making accurate forecasts decades in advance...
And how he reinvented it to accurately time stock movements months and even weeks before they begin to move.
Most importantly, you’re about to see how this reoccurring phenomenon — what he calls "Peak Profit Cycles" — could have already handed you life-altering gains of 13,976%, 5,844%, and EVEN 402,500%.
You heard that right — on one recent "Peak Profit Cycle," just a single trade could have turned every $1,000 you invested into $4,025,000.
See the proof yourself...
Incredible, right?
When a "Peak Profit Cycle" began forming around mid-2003, Paladin Energy took off on the most unbelievable run I’ve ever seen.
It skyrocketed, on average, 8,305% a month.
This means it could have multiplied your money 83 times over, every month, for four years.
Imagine how much this would have changed your life if you had invested just $100, $1,000, or $10,000 on this one "Peak Profit" run.
You would never have to work or invest again (if you didn’t want to).
Can you see why I couldn’t help but share this hidden phenomenon with you?
It could completely change everything about your retirement and your financial future... as easy as typing three letters into your account.
But I must admit, not every single play from this "Peak Profit Cycle" saw a staggering gain like 402,500%...
Some jumped by only 10,000% or 5,000%.
As legendary investor Rick Rule said, "The worst performer of this group saw share price increases exceeding 2,000% over 6 years."
Take UEX Energy... which skyrocketed for 13,976% gains on the same "Peak Profit Cycle."
While that’s not a 400,000% winner, it’s certainly not bad. By typical investing standards, in fact, that’s a miracle. These types of gains shouldn’t happen according to mainstream thinking.
But they’re routine once you know how "Peak Profit Cycles" work and how to identify them.
And it’s enough to turn just a small stake of $1,000 into $139,760.
Another example — from the same exact "Peak Profit Cycle" — is a company called International Enexco.
For a long time, it was nothing special. It lingered around the same share price for a few years.
But everything changed when this "Peak Profit Cycle" began.
Also more typical of a "Peak Profit" stock, this company enjoyed a steep 13,166% climb at the same time the others were taking off.
That’s enough to turn just a small stake of $1,000 into $131,660.
No wonder Rick Rule says "a lot of people added a zero to their net worth" thanks to this "Peak Profit Cycle."
Then there’s a firm I know of called Energy Fuels.
Unlike the companies I just showed you, Energy Fuels was far from a real bargain in the energy sector.
Already at $3.50, you would have thought it had little potential for big, quadruple-digit runs.
But when a "Peak Profit Cycle" began forming, it launched the company to all-new heights. From $3.50... to $50... to $100... before making its way up to $266.
If you knew the power of this market phenomenon and the amazing foresight it carries, you could have seen 5,844% gains on this sky-high run... in just over 12 months.
Enough to turn a small stake of $1,000 into $58,440.
And that’s the beauty of this strategy. Since the rewards are so high, you only have to fork over a very small amount to sit on a five-, six-, or seven-figure windfall. So your risk is very little.
But if you were feeling a little dangerous and wanted to invest $10,000, do I really have to spell out the fortune you’d have right now?
So at this point, you might be wondering...
The sad part is you could have actually read about this "Peak Profit Cycle" — the one I just discussed — in The Wall Street Journal or Forbes.
"Why Haven't I Heard of Peak Profit Cycles?"
So why didn’t more people take action on it? Much less know about it?
In short, most people don’t understand the power of "Peak Profit Cycles."
Most flashy traders are looking for all the big gains in risky options and futures...
While the "investing crowd" is too busy looking at P/E ratios, market caps, and valuations.
But they share one thing in common: they miss what’s right under their noses!
As legendary investor Jim Rogers says, "It’s astonishing how many people cannot grasp this."
By conventional standards, the companies I listed before were not great.
In fact, you might have thought they were absolute garbage from the simple fundamentals.
For instance, Forbes reports that Paladin Energy, before its 400,000% climb, "was classified as penny dreadful."
One hedge fund manager even recommended that investors shun the company for its lack of revenue and earnings.
But none of that matters.
The phenomenon of "Peak Profit Cycles" can send even the most god-awful penny stock, like Paladin Energy, shooting to the heavens.
And this is far from a rare example.
The small group of plays I just showed you was from ONE single "Peak Profit Cycle"... at ONE single moment.
As you’re about to see, there are dozens of "Peak Profit Cycles" every year.
In fact, the phenomenon is behind virtually every single quadruple-digit, quintuple-digit, and — as you’ve just seen — EVEN sextuple-digit gain in the markets.
What’s more, it’s the hidden catalyst behind almost every major movement in every stock...
One that tells you precisely when to buy and precisely when to sell, sometimes months before a stock begins to move.
And once you know what it is and how to identify it, you could position your portfolio for the score of a lifetime on hundreds of plays...
Without using futures, options, or anything risky.
Starting tomorrow...
And starting with only a few hundred dollars.
Now, at this point, I would understand your skepticism.
A Natural Law of the Markets
But as you’re about to see, the strategy I’m sharing with you today is 100% real.
It’s grounded in real science, real math, and years of work from experts.
It’s based on a formula with a 58-year track record of "on-the-mark" predictions.
And it’s rooted in a fundamental natural law of the markets...
A law that essentially guarantees prices go up.
What does that mean for investors?
Like all natural laws, it only becomes a law after being rigorously tested over and over again until it’s absolutely proven. Beyond a shadow of a doubt.
As Quantum Fund founder Jim Rogers says, "Forget everything else. Figure out [this natural law] and you’ll get extraordinarily rich."
Resource guru Rick Rule agrees: "Markets move as a result of this [law]."
And when a "Peak Profit Cycle" forms, according to Rule, "The price has to go up."
"The question is not 'if' but 'when.'"
This means you can forget flashy futures, options, calendars, and all sorts of risky nonsense the thrill-seekers chase after.
You can also forget about things like P/E ratios, valuations, and market caps that the "investing crowd" looks at.
"Peak Profit Cycles" render all of these things virtually meaningless.
They cut through all of the emotion and guesswork in investing and allow you to make profitable decisions with 100% certainty...
Allowing you to eliminate financial uncertainty from your retirement.
In a moment, I’ll reveal a way you can capture hundreds of "Peak Profit" opportunities that are beginning to play out.
For instance, we’ve already identified three "Peak Profit Cycles" forming right now.
And if you take quick action on these "Profit Peaks", you could position yourself for dozens of "slam dunk" gains like 13,976%, 5,844%, and EVEN 402,500%.
But before I reveal these next three six-figure opportunities, let me introduce you to my colleague... the man who discovered this unusual phenomenon: energy expert Nick Hodge.
He’ll show you why "Peak Profit Cycles" is the single most powerful forecasting tool in the markets.
In fact, as you’re about to see, the mathematical formula it’s based on has already accurately predicted opportunities for gains like 5,445%, 7,011%, and 13,025%.
And that’s just for starters...
Nick, take it away...
Thanks for the introduction, Brian.
The 58-Year Mathematical Formula
Hi, my name is Nick Hodge.
My discovery, the one Brian just discussed, began 58 years ago with M. King Hubbert — a very famous name in the world of geology, geophysics, and resource economics.
Hubbert uncovered a mathematical formula he would use to predict the most profitable opportunities in the history of the energy markets.
Here it is...
It looks complex if your calculus is a bit rusty, eh?
But in graph form, the formula actually looks very simple.
Back in 1956, Hubbert had figured out that this "bell curve" demonstrated, without a shadow of a doubt, that America’s output of conventional crude oil would hit a peak by the early 1970s.
Sure, we have tons of oil in America now. But this is unconventional oil — the stuff that’s harder and more expensive to extract.
While I'm on the topic, though, I ought to explain that the Hubbert Curve doesn't just apply to oil...
Once any commodity crosses over the bell curve threshold circled in the chart, it experiences a "Hubbert Peak"...
Sending its spot price, along with a handful of plays, skyrocketing... virtually overnight.
That’s it.
There’s no emotion involved... no analyzing charts... no guesswork. As Brian mentioned, things like P/E ratios, market caps, and valuations become virtually meaningless.
As sure as the Earth rotates around the Sun, certain key stocks are mathematically predetermined to move upward.
That’s exactly what happened in the 1970s. Once a "Hubbert Peak" formed in crude oil, it triggered other commodities like coal, gold, and silver to take off (just to name a few).
This was the famous commodity super-cycle of the 1970s. It’s likely you remember it. At the very least, you probably remember the oil crisis... lines outside the gas station and the price of oil taking off fourfold virtually overnight.
But few remember M. King Hubbert and his shockingly accurate prediction.
If you had followed Hubbert’s work and saw the mathematical precision of his formula, you could have positioned yourself for some of the biggest gains in financial history...
Gold and silver stocks, for instance, soared for some of the most fantastic gains on record.
Many saw gains of 10,000%, while a few even saw over 100,000% returns.
Take Lion Mines — the single biggest stock growth story I’ve seen in all my years in the markets.
It surged from $0.07 a share to $380 per share!
That’s a staggering return of 542,757% in just five short years, or enough to turn a very tiny stake of $100 into $542,757.
Just imagine if you had invested even a little more.
In case you think that was an anomaly, consider Wharf Resources...
A gold miner that took off from $0.40 to $560 in the same time period.
That’s a 139,000% gain, or enough to turn $500 into $695,000.
And then there’s Azure Resources, which took off from just $0.05 to $109 — a 217,900% gain.
Enough to turn $500 into over $1 million.
These are all verifiable gains... all during the same five years... and all triggered from the same Hubbert Peak.
I’m not exaggerating when I say if you had used this formula as your personal investing guide, you would be rich beyond your wildest dreams — no matter how much money you started with.
Take John Reed, who knew about Hubbert’s Curve and saw the headwinds with oil in the early 1970s.
He invested his meager $600 savings in commodities when this Hubbert Peak started forming.
It changed his life, to say the least.
He saw 4,200% gains across the board... even as the S&P only moved 47% in the 1970s.
Four years later, he made his first $1 million.
At age 37, he retired to enjoy what he calls "a different life."
He now travels around the world, writes books, and owns several homes on different continents.
Then there’s Ron Dean, who at the age of 21 didn’t have a dime to his name.
In 1970, he borrowed $1,600 from his family, spent most of it, and staked the remaining $400 on resource stocks — right when this Hubbert Peak was forming.
By 1973, when the peak sent commodities skyrocketing across the board, he had $100,000.
The following year, at age 25, he was a millionaire.
This is the life-changing power of Hubbert’s forecasting model.
Now, you might be thinking, "That’s great, Nick, but that was 40 years ago. What about right now?"
Well, I’ll show you how the Hubbert Curve could change your life and hand you mind-boggling gains — the kind like you’ve just seen...
Not once every decade or so...
But just months and even weeks from today.
What’s more, this wasn’t Hubbert’s only "bull's-eye" forecast.
In fact, using this formula, this scientist established...
The thing to remember is that when Hubbert first made his prediction of the 1970s energy crisis (in 1956), he was ridiculed by the press and his peers.
A 58-Year Track Record of 100% Accurate Forecasts
His employer at the time, Shell Oil, even told him not go through with it.
But Hubbert ignored his bosses, his colleagues, and everyone else... because he knew this peak was going to unfold with mathematical certainty.
According to his biographer and colleague, "Almost everyone, inside and outside the oil industry, rejected his analysis."
That all changed during the 1973 oil crisis.
Hubbert was more than just vindicated — he became famous for his shocking "prophecy." His name made headlines. The scientific community welcomed him back with open arms.
But was his prediction just a fluke?
Some said so.
Some wrote off Hubbert’s forecast as "lucky."
That is, until his curve hit the mark again.
In his last published paper in 1982, Hubbert predicted the global conventional crude oil supply would reach another peak between 2004 and 2008.
Sure enough, the IEA confirmed that conventional oil had reached a Hubbert Peak in 2006.
And repeating the history of the 1970s... oil skyrocketed.
The crude oil index climbed from $50... to $70... to $90... continuing its climb up until mid-2008, when oil struck $147 a barrel.
The "Hubbert Peak" in oil also triggered a massive boom in commodities like coal, copper, gold, and silver (just to name a few).
Once again, everyday investors saw the opportunity for out-of-this-world gains.
Take the metals miner Augusta Resources, which skyrocketed for over 6,500% gains in a matter of months.
This means you could have turned $5,000 into $330,000 in just six months.
Not bad, right?
But if you held tight, you could have closed out at 13,280% gains in a few short years.
All told, you could have turned that same stake into $669,000.
Then there’s uranium explorer Laramide Resources.
Around the same time, the company exploded for a 25,650% gain.
If you had known about this phenomenon and its incredible forecasting power, you could have gotten rich on a small stake of $5,000.
Then there’s Arrowstar Resources, a minerals explorer, which handed investors 16,900% gains during this same Hubbert Peak run.
I could give you hundreds of examples, but I think you get the point:
Once a Hubbert Peak starts forming, certain plays will inevitably go through the roof.
Now, in case you think I’m cherry-picking stocks, consider this...
According to one analysis, the average return of mining stocks during the Hubbert Peak of the 2000s was a whopping 877%.
There were hundreds of resource producers that returned quadruple-digit gains.
And dozens, like the ones I just showed you, that returned much more.
If you knew the forecasting power of Hubbert’s Curve, you could have retired early on one of the biggest financial opportunities in history. And you could have done so no matter how much you invested.
But there is one major problem...
A "Hubbert Peak" event only occurs periodically.
It usually begins quietly, in the shadows of the energy markets...
Then it eventually washes through the marketplace, gives way, and subsides.
That’s why, up until now, this model has only been used to make long-term predictions 10, 20, even 30 years in advance.
But recently, I’ve found a way you can profit from this all the time, no matter what the markets are doing.
By tweaking Hubbert’s original curve and simply altering the timing, I discovered a phenomenon that mirrors "Hubbert’s Peak."
Timing the Markets with Hubbert's Curve
Only it occurs much more frequently (and it’s just as potentially profitable).
I call this reoccurring phenomenon "Peak Profit Cycles."
It’s a strategy that allows you to pocket "sure thing" gains from the Hubbert Curve’s forecasting science. But instead of every 10 or 15 years, it could be every 10 or 15 days.
By knowing how this phenomenon works on a routine basis, you could pocket the same astronomical profits you could have made by getting in early on the commodity supercycle of the mid-2000s.
And you could make these kinds of gains in a much shorter time span, in every month of every year.
Regardless of what the S&P or Dow are doing.
I’m talking about explosive quadruple-digit, quintuple-digit, and EVEN sextuple-digit gains.
Life-altering returns like 13,976%, 5,844%, and EVEN 402,500%.
Gains so high you can put up less than a few hundred dollars and make enough to never work or invest again... enough to sail the world on a luxury yacht or buy a villa up in the mountains.
This is the reality, not the fantasy.
And it could be yours in just a matter of months.
Like Brian mentioned earlier, I’ve identified three incredibly profitable "peak" opportunities that are beginning to take shape NOW.
These "Peak Profit" runs could explode as soon as this year.
If what I’m seeing now delivers even a fraction of the profits of similar opportunities... you could retire very rich, very quickly on a very small investment.
But you need to take action right now.
You see, this small group of plays is already starting to climb.
If you wait too long, even until tomorrow, you could miss the really early entry points to buy.
And it’s by detecting the opportunity weeks and months before stocks really take off that "Peak Profit Cycles" can hand you gains into the thousands-of-percent range.
In other words, you can either...
1) Wait until it’s too late and see a fraction of the profits... probably double or triple your money. Still a nice windfall, but it’s not going to let you retire early.
Or...
2) You can take action now and potentially see 10-fold, even 100-fold gains... changing your life and your financial future.
The choice is yours...
Whichever you choose, I’ll reveal the full details on these three very urgent "Peak Profit Cycles" in a moment.
Before I do, allow me to show you the kind of money up for grabs here.
When a "Peak Profit Cycle" takes place, smart investors are virtually guaranteed to — at minimum — double or triple their money...
17,368% Gains in Months (Not Years)
But it’s incredibly easy to grow your money 10-fold or even 100-fold if you know where to look.
And because it only requires a few hundred dollars to sit on a five-, six-, or even seven-figure windfall...
And because certain stocks can only go up during a "Peak Profit Cycle"...
This is about as safe a strategy as it gets when we’re talking this kind of incredible upside potential.
Take the "Peak Profit Cycle" that sent copper soaring threefold from 2009 to 2011...
After analyzing dozens of copper plays, I found that not a single stock saw losses or less than triple-digit gains during this "Peak Profit" run.
To put it lightly, more than a few saw quadruple- and even quintuple-digit gains.
For instance, there’s the copper miner Sandfire Resources.
If you looked at the company’s fundamentals in 2009, you would have thought it a sure loser.
But in 2010, one magazine called it "A Miner Miracle."
The report states, "Sandfire shares soared from below 5 cents in March last year to a high of $4.39 in October. In 15 months, its market capitalization went from $6 million to more than $400 million."
It wasn’t a miracle, though. It was the simple scientific law of "Peak Profit Cycles" at work.
And Sandfire wasn’t finished from there. In fact, it nearly doubled shortly after the article.
All told, if you knew the power of this market phenomenon and took action when it began forming in copper, you could have seen life-altering gains of 17,368% in under two years.
That means you could have turned a small stake of $10,000 into a $1,736,800 fortune in just 22 months.
What could that kind of money do for your retirement, your financial future, your life?
In case you’re thinking this is some kind of anomaly, consider the example of a little-known copper miner called Blackthorn Resources.
On the same exact "Peak Profit Cycle" for copper, Blackthorn skyrocketed by 11,766%.
Then there’s DOT Resources, which soared 4,100% in a little over 12 months from copper’s "Peak Profit Cycle."
And copper was far from alone.
Like I said before, there are potentially dozens of "Peak Profit" opportunities every year.
In just a moment, I’ll show you three opportunities you can buy into right now for incredible gains like 17,368%, 11,766%, and 4,100%.
These are the kinds of returns that can fast-track your retirement on a very small investment.
But before I reveal the three "Profit Cycles" that are already starting to take shape...
Let me show you one more example of this massively profitable phenomenon.
Between 2009 and 2011, coal experienced a "Peak Profit Cycle," too.
The thing is, the price of coal hardly doubled during this time.
But no matter... the gains to be made from coal stocks were simply breathtaking.
Take Coalspur Mines, which saw explosive gains of 22,400% in two years’ time.
That means on this one "Peak Profit" play alone, you could have turned...
Every $500 invested into $112,000Every $5,000 into $560,000Then there’s Aspire Mining.And every $10,000 into $2,240,000
If you knew the power of "Peak Profit Cycles" and got in early on this play as coal began ramping up, you could have seen gains like 9,445%.
And finally, there’s the coal miner Guernsey, which could have returned you 8,536% gains in roughly the same time span.
To be clear, none of these companies was particularly special.
Yet during the two-year life span of coal’s "Peak Profit Cycle," they could have handed you over 40,000% gains.
If you made even one-half or one-quarter of these gains... at one time... it would likely change your life.
And yet this is just a small sample of the gains you could have made from ONE "Peak Profit Cycle."
Normally, these types of gains only happen over the course of decades. And even then, they’re few and far between.
They usually only break out during big supercycles like the ones predicted by the Hubbert Curve.
But like I said before, "Peak Profit Cycles" are the way to profit from the Hubbert Curve’s big opportunity forecasts... only every year, and potentially every month.
It’s the most insanely profitable phenomenon I’ve ever seen in the markets.
It’s the surest way to an early (and fast) retirement.
And it’s accessible to all investors, no matter how much they start with.
Yet few understand it. And even fewer take advantage of it.
Now, at this point, you’re probably wondering...
Well, I put together a dossier called "Peak Profit Cycles: How to Profit from the Most Powerful Catalyst in the Resource Markets."
"How can I get in on 'Peak Profit Cycles?'"
With your permission, I’ll send you this groundbreaking research absolutely FREE.
Inside, you’ll discover details on the next three "Peak Profit" opportunities taking shape right now.
To be sure, I’m not the only one who sees their wealth potential.
According to Mineweb, "[resource guru Rick Rule] feels the only way for prices to move is upwards and upwards substantially."
Let me a share a little bit about each of these opportunities right now...
PEAK PROFIT OPPORTUNITY #1:The platinum group metals (PGM) are set to explode. A "Peak Profit Cycle" has already begun... A number of plays are already moving.
Platinum/Palladium
How urgent is this?
If you wait too long... any longer than it takes for you to read this report... you’ll likely miss out.
And while you’re virtually guaranteed to make money investing in platinum and palladium...
To make the REAL money — the kind that could allow you to retire on a small investment — you need to not only know where to look...
You also need to move swiftly.
That’s why I’ve identified three little-known plays — stocks with the upside potential in the thousands-of-percent range — that could allow you to take home a fortune.
"Peak Profit" Play #1: The first play is a Vancouver-based miner with a market cap of $732 million... It’s ultra-cheap right now, and, incredibly enough, it’s sitting on a HUGE platinum deposit — the largest such discovery in 80 years. It's already been granted mining rights on this very deposit. I expect it to see easy quadruple-digit gains in the months ahead as platinum takes off."Peak Profit" Play #2: The next play is another Vancouver-based miner. Its market cap is only $51 million, it’s priced incredibly cheap, and Seeking Alpha even recently called it "a gem among the rubble" and said it has "genuine 10-bagger upside." I agree. But I think it could climb even higher. During platinum’s last "Peak Profit Cycle," this company soared over 6,700% in a matter of months. I see NO reason why this time will be any different."Peak Profit" Play #3: The last play is a Toronto-based palladium miner. It’s a turnaround story, and after divesting from the losing parts of its business, the company is now once again shaping up for profitability this year. It’s in the early stages of a ramp-up to more efficient, greater quantity, and higher-grade production. And it’s already moving. I’m not the only that sees the potential. Seeking Alpha calls it "a multi-bagger" and writes that 1,300% gains or more by the end of the year would not be surprising.Each of these stocks could multiply your money 10-fold in the next six months.
It’s no wonder Rick Rule has already invested $280 million in platinum and palladium stocks like these...
And that’s just from ONE "Peak Profit Cycle" right now.
Let me show you what else is coming down the pipeline...
PEAK PROFIT OPPORTUNITY #2:You wouldn’t know it from the mainstream media...
Gold
They’ve written this next resource off.
They even slander its proponents and call them names.
But forget the investing crowd... forget the media... and forget the mainstream analysts.
The scientific power of "Peak Profit Cycles" allows you to cut through all the "noise" and make decisions with rational certainty.
Of course, I’m talking about gold.
And while you may hear some claim gold could soar from inflation, a stock market crash, or Middle East conflict...
They’re way off.
I recently identified a "Peak Profit Cycle" forming in gold...
One that could send gold roaring to all-time highs very quickly.
But it has nothing to do with the dollar or the S&P.
The thing is, gold is already moving thanks to this market phenomenon.
A handful of plays are already seeing triple-digit gains.
And the good news is, right now, it’s still ultra-early.
But not for long...
If you want to grab life-altering gains on gold’s next "Peak Profit Cycle"... you need to take quick action now.
And these three plays are the best ways to get started...
"Peak Profit" Play #1: This first Boise, Idaho-based gold miner surged for unbelievable 48,500% gains during gold’s last "Peak Profit Cycle." That’s enough to turn a small stake of $1,000 into $485,000. But this time, it’s even better positioned for gold’s next explosive run. It owns a 7 million-ounce mine in Idaho — one that’s low-cost with a long life span. It’s the kind of asset that would still double or triple the company’s shares — even if the price of gold goes down. But it could send the stock surging to all-new heights once gold takes off.Right now, the company’s market cap is at $100 million. But it has the ability to produce 400,000 ounces each year. Which means, even at current gold prices, the company could produce five times its current value every single year. That’s why Seeking Alpha says shares could easily triple... no matter what the price of gold does. And that’s HUGE upside potential for gold’s "Peak Profit Cycle." It could once again deliver investors quintuple-digit gains... or even more."Peak Profit" Play #2: This next Vancouver-based miner has one of the best management teams in the gold mining industry. With 200 years of combined experience and solid track records of delivering big gains to investors, I would recommend this company even if I thought gold was staying flat. Seeking Alpha says "the undervaluation of its shares is staggering" and "compared to other gold and silver miners, it should be 350% higher than its current price." In other words, it could hand you 350% gains for no reason at all.It has over 40 projects throughout Mexico, Canada, and the U.S. One of the biggest is a substantial gold-silver project in Mexico with 100 million ounces of silver and 2 million ounces of gold. The company’s current valuation is $97 million... but it could net 22 times that much every year on this one project — if gold even moves up a little. We’re looking at an easy 10-bagger here. And 100-fold gains are not out of the question. But I expect this play to move quickly. The last time gold shot up, the company skyrocketed 450% in a few months. So the time to buy is NOW."Peak Profit" Play #3: This last play is a Toronto-based gold explorer with a major undeveloped high-grade gold project in West Africa. The news of drilling results sent the stock soaring for over 100% gains in the last year... even as the price of gold hardly moved. The company is now the fastest-growing and fourth largest gold producer in Africa. It’s already trading at a significant premium compared to other gold miners. Thanks to low operating costs, it’s netting considerable cash flow even with gold at its current price.As the company moves ahead with new exploration on its high-grade gold project and starts production in early 2015, it could absolutely skyrocket. What’s the potential upside? During gold’s last "Peak Profit Cycle," it surged for 434% gains in a few months. But with this new gold project, it could take off just as fast... but for MUCH bigger gains.Now, as great as these opportunities sound...
Let me tell you about what might be the most lucrative "Peak Profit" opportunity of all.
If you’re looking to fund your retirement on one play, no matter how much you invest, you’ll want to pay close attention.
PEAK PROFIT OPPORTUNITY #3:Most investors either hate or have forgotten about uranium... "the other yellow metal."
Uranium
But not long ago, I identified a "Peak Profit Cycle" forming in uranium.
In uranium’s last "Peak Profit" run, investors had the potential to bag 10-fold, 100-fold, and EVEN 1,000-fold gains... in a matter of months.
And this time, it’s no different.
Only right now, you can get in early — months before uranium starts taking off.
In short, you could see the financial windfall of a lifetime by the end of this year. And the way to make the most money in the shortest time is with the following group of virtually unknown plays:
"Peak Profit" Play #1: This Toronto-based uranium explorer has recently made headlines with its historic high-grade uranium discovery. The company recently uncovered the Patterson Lake South deposit on Canada’s Athabasca basin, home to the richest uranium mines in the world. And this new discovery is now the crown jewel of the region. It’s the last undeveloped source of high-grade uranium in the world, and drilling results are already proving to be spectacular.Even if the uranium price goes nowhere, this play could double and still be well undervalued. But the coming "Peak Profit Cycle" in uranium will easily send this miner shooting through the roof. During uranium’s last "Peak Profit Cycle," this miner soared for over 1,300% gains. But with this new high-grade discovery, it could easily double those gains this time around."Peak Profit" Play #2: The Patterson Lake South discovery sparked a rush of miners to the region, including this next Canada-based play. It’s actually a recent spin-off of the previous play I discussed, with the same management and technical teams. So it provides additional exposure to the historic uranium discovery... but at a fraction of the cost.It has a joint venture just north of the PLS deposit, where it’s hoping for a big hit of its own. It has another joint venture just west of PLS too. Not surprisingly, drilling results are already looking great. It’s identified several highly prospective targets that could mirror the historic discovery. But even if it turns up little, it will ride the coattails of its parent company’s certain success. And with the share price already ultra-cheap, it could easily hand investors quadruple-digit gains."Peak Profit" Play #3: This last uranium explorer owns uranium interests that cover more than 1,000 square kilometers in the storied Macusani Plateau district locatd in Peru. It's resources include over 97 million pounds of U308 that have been quantified in a government-compliant study.It's a shallow, low-lying deposit that could be profitable even at current low uranium prices but that will have HUGE margins once uranium skyrockets. Right now, it’s a considerable value buy in the uranium sector. Similar plays like it have returned 10,000%+ gains during "Peak Profit Cycles." And this time should be NO different.If you’re wondering whether these stocks are real or not, I don’t blame you.
But I’ve personally visited many of these companies, met their management, and analyzed their operations.
If my research is even half right...
If history even partly repeats itself...
These little-known plays could surge for astronomical gains like 13,976%, 5,844%, and EVEN 402,500%.
And I’ve packed all nine of these hot stocks — with their names and ticker symbols — into my brand-new dossier: "Peak Profit Cycles: How to Profit from the Most Powerful Catalyst in the Resource Markets."
But these "Peak Profit" opportunities are already heating up.
They’re starting to move right now.
And soon, they could take off to astronomical heights.
Before you know it, the entry point on these companies will be too expensive, and you’ll miss out on the really big gains.
The kinds of gains that could allow you to retire early in a matter of months.
Bottom line: If you’ve been looking for an opportunity to accumulate a fortune... investing very little money... and in even less time... this is it.
All I ask is that you give my advisory research service, Early Advantage, an absolutely free test drive.
Like I said, there are potentially dozens of "Peak Profit" opportunities every year.
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I’m tracking down the hottest plays in order to squeeze every drop of profit from each.
But these tiny "Peak Profit" plays can be extremely volatile, and many trade only a few transactions per day.
If I released a "Peak Profit" recommendation to too many people... the play could go absolutely bonkers.
That’s why I can’t reveal any of the names of these companies in this presentation.
So in order for you to take advantage of this urgent opportunity I mentioned before and dozens more just like it, I’m opening this offer up to new Early Advantage members by invitation only.
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For 60 days, you'll have the chance to profit from every single one of the winning investments I’ve shared exclusively with my followers... without risking a single dime.
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All you have to do is click "Subscribe Now" at the end of this presentation. Once you do, you’ll immediately receive access to dozens of open plays that you can take advantage of right away. And within 14 days, you’ll get another alert containing my latest pick, with analysis and ticker enclosed.
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Put simply, Early Advantage shows you how to book explosive gains in the shortest time frames by exploiting little-known anomalies in the natural resource markets...
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Thousands of Early Advantage readers have already been booking double- and triple-digit gains on a regular basis.
Just to give you a better idea:
- I led readers to 391% gains on a Chinese battery play before anyone knew lithium was set to explode...
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- And I've closed, in total, more than 210 double- and triple-digit winners on my stock recommendations alone by locating little-known wealth-building opportunities before the masses knew about them.
- 159% on Xethanol Inc. (in 3 months)
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- And many more.
And since I want you to have the opportunity to make as many gains as possible as fast as possible, I’ll alert you once a "Peak Profit Cycle" begins forming.
If I believe a resource play has potential, you’ll hear about it. It’s just that simple.
Now, to be your "inside man," dedicated to digging up the most lucrative moves that could easily put you on the path to becoming very rich, very quickly... I need to know you're committed.
And to get you started as soon as you receive my latest "Peak Profit" alert, I'm prepared to throw in some valuable bonus gifts.
To make this potentially life-changing decision even easier for you, I’ve included a few things to "sweeten the deal"... and to show you how important it is to me that you succeed.
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That’s why, when you sign up today, you’ll get access to any plays that are currently open. Which means you don’t have to sit on your hands, waiting for the next alert to show up in your inbox.
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Uranium Prices and Mining Stocks Set to Rise Beyond 2015
Uranium prices and mining stocks are low, but market forces will push them both higher in the next 12–24 months, says David Sadowski. Miners are jockeying for position and the Raymond James mining analyst tells The Mining Report to expect mergers and acquisitions as they prepare for the good times to come. The market's supply glut will be gone by mid-decade, and mining will have to ramp up to head off a deficit by 2020. The time to buy in is now.
The Mining Report: David, welcome. What is happening with uranium demand? And where are the trends most pronounced?
David Sadowski: Over the next decade, we expect uranium demand to grow at about 3% per year (3%/year) with about two-thirds of that incremental buying coming from China, Russia and India. China is building reactors like they're going out of style—30 units are currently under construction domestically, with 59 in the planning stage — and we've just seen China grow its presence internationally with an equity stake in the Hinkley Point power station in the U.K. Russia is building 10 reactors at the moment. It's got 28 on the drawing board, according to the World Nuclear Association, and that's going to more than offset the retirement of some of its aging reactors. Russia is heavily involved in vending reactors globally as well, with projects around the world. One interesting aspect of that is the build-own-operate model, where Russia will build and operate a plant in your country and then sell you electricity from that plant. In India, despite some headwinds with the nuclear liability law, another new reactor just connected to the grid, an additional six units are currently under construction and five dozen are on the drawing board. You've got new entrants like the United Arab Emirates, Turkey and Vietnam showing that they're very serious about nuclear as a power source.
On the other hand, although the U.S., the world's largest nuclear power producer, is building three large reactors and two more are due to start construction imminently, utilities have decided to close five small, old reactors due to challenging economics, with a handful more at risk of closure. In France you've got some talk about reducing its very heavy reliance on nuclear, while a similar debate has kicked off in South Korea. And Germany, as we all know, is looking to phase out its nuclear power plants by 2022. It's sort of a polarized mix internationally when it comes to nuclear power and uranium demand.
The underlying theme is that Western nations may have slowed their momentum somewhat on nuclear, and there's a variety of reasons for that, including upfront capital costs, which tend to be quite high; the low cost of competing sources of electricity, like natural gas; and in some cases low electricity demand and power rates regionally. Despite that, Eastern nations remain focused on nuclear reactors as a linchpin in their energy mix for its stable, low-cost, zero-emission ability to provide secure base load power.
TMR: With the market sending conflicting signals, how should investors proceed?
DS: For investors, the key thing to focus on is that irrespective of public outcry in some regions and pullback on nuclear power growth plans in others, there is still significant growth of nuclear power globally. Japan is going to be restarting its reactors. We think about 30 gigawatts or so will eventually get turned back on, with those first units firing up again mid-2014. Further clarity on the timing and number of those restarts as well as potential read-through on Japanese inventories is a key catalyst for the uranium market. The investor looking at some of these conflicting signals has to stay focused on the underlying trend and ignore the noise. We think the underlying trend is heading in a positive direction, especially in the medium- to long-term.
TMR: Ontario decided to refurbish existing nuclear plants instead of building new ones. What does this mean for the future of nuclear power in Canada?
DS: Canada has long been a major force in the global nuclear power industry. Nuclear power was first developed in the 1940s. In the 1950s and 60s, Canada developed the CANDU reactor design, a unique heavy water plant that is flexible with respect to maintenance and the fuel that can be used, supplies much of the world's medical isotopes and has been exported to several other countries. For domestic power generation, Canada is pretty reliant on nuclear power. There are 19 reactors operating today, meeting about 15% of the country's electricity requirements. We don't think the decision not to pursue new reactors at Darlington is going to change nuclear's role—the decision to refurbish the existing units is a cost-effective commitment, in-line with demand growth, to maintain nuclear as an important source of power in the country for decades to come.
TMR: Yellowcake is trading now at an eight-year low, around $35 per pound ($35/lb), but it appears to have stabilized there after sliding for three years. What is your advice for investors now and why?
DS: We believe the uranium price is more likely than not to be range-bound for the next 12 months or so given a glut of uranium supply and a significant dip of real demand in the marketplace (as opposed to discretionary demand) from utilities. In the medium to longer term, we continue to see extremely compelling supply/demand fundamentals. Accordingly, we're still inclined toward companies that can weather some spot price weakness, but are leveraged to an inevitable rise in sentiment and equity valuations in the space.
TMR: In our last interview though, you had projected a three-year supply shortfall of uranium starting in 2014. What's the current outlook?
DS: A lot has changed since we last talked. There's been a bit of a pushback in terms of when we expect Japan to start up its reactors. That has had implications for uranium demand globally. Japan created a new regulator called the Nuclear Regulation Authority. It established a rigorous new safety framework that all reactors will have to operate under and the pre-restart inspection process was started from scratch all over again. The reactors have to be upgraded to meet the new guidelines, it's going to take at least six months to inspect each power plant, and there's a finite number of inspectors.
Related article: A Sichuan Knife Fight
In China as well there's been a throttle back on its growth plans following an 18-month safety review after Fukushima. That safety review was completed in late 2012. For the time being, only third-generation power plants on the coast will be permitted to commence construction going forward. That's had a bit of a negative impact. Those are just two examples.
On the supply side, mine production has been very strong since we last spoke. We've seen big rebounds in Australian and African supply. Kazakhstan has continued to grow despite obvious price headwinds. There's been some inventory selling by a company called Japan Atomic Power Co. Perhaps more significantly, requests for deferral of supply contracts by some Japanese utilities have led to the return of some uranium back to the original selling producers, who then turn around and sell that material into the marketplace. That's had a negative impact on the supply/demand fundamentals.
Even though the Russian HEU agreement ends this year, which should reduce U.S. utility reliance on this stable source of supply, we think secondary supplies will continue to be significant. The U.S. Department of Energy stated it's going to start releasing more of its material into the marketplace. We also now expect higher levels of material as a result of underfeeding at enrichment plants in both Russia and Western nations. On balance, this has all resulted in our global supply/demand shortfall getting pushed back several years.
We now see meaningful oversupply through 2016, a relatively balanced market from 2017 through 2019, but then in 2020 we see a deficit emerge that escalates very quickly to crisis levels. There is enough material to go around for now, but demand continues to grow. Existing mines are depleting and the uranium price is far too low to incentivize the mines that the market will badly need by the end of this decade. We believe uranium prices have to be a lot higher by 2015 or 2016 to provide enough lead time to bring on new supply in advance of this very large shortfall looming. It's hard to time these things exactly with respect to the uranium price, but we do see further supply disruption or even a resumption of long-term utility contracting as being that spark that moves uranium prices to where they have to get to.
TMR: Given all these conflicting trends, how are mining companies responding?
DS: The mining companies have suffered. Spot uranium prices are at eight-year lows and are not reflecting the longer-term fundamentals. For companies that have meaningful exposure to current market prices, that is to say those that don't benefit from long-term fixed-price contracts, their realized prices are on a downward trend. That is definitely factoring into equity valuations as well. We've got producers averaging well below historic levels. We typically see producers averaging well over 1.5-times price-to-net asset value, for example, and right now they're trading at fractions of that. The juniors are even more battered with reduced prospects of securing equity financing and greater challenges in quickly getting their projects into positive cash flow. But the uranium price must inevitably go higher and we see a lot of opportunity on the equity side because of that. We think there's going to be a continued trend toward mergers and acquisitions with logical consolidation in key jurisdictions such as the Western United States. Also, many larger entities are well capitalized, while potential acquisition targets are trading at bargain valuations.
As far as how uranium companies have coped, over the last 12–24 months we've seen Cameco shelve its Double U project, BHP Billiton Ltd. (BHP:NYSE; BHPLF:OTCPK) shelved its Olympic Dam expansion plans. Trekkopje, Imouraren, Bakouma, Stage 4 at Langer Heinrich, Ranger Heap Leach—these are just some of the projects that have been pushed back or canceled, now removed from the project pipeline. Existing production has been cut back as well. Energy Fuels Inc. (EFR:TSX; EFRFF:OTCQX) has halted mining at three small mines in Colorado and Uranium One is throttling back on well field development at its Willow Creek mine in Wyoming, which should result in declining output rates there. Further supply cutbacks like those could be one of the catalysts that spark the uranium price over the next 12–24 months. We highlight Uranium One's Honeymoon mine in Australia, Paladin's Kayelekera in Malawi, Rio Tinto's Rössing in Namibia and further growth in Kazakhstan as potentially being the next victims of this low price environment.
TMR: You recently attended this year's World Nuclear Association Symposium. What were the takeaways?
DS: The symposium is the largest demand-side event in the industry. Normally we see an uptick in market activity following the conference as market participants from around the globe sit down in London and hammer out supply deals. That didn't really happen this year. I think what became apparent at the WNA was the demand side of the industry feels satisfied with the amount of uranium available to meet its uncovered needs over the next couple of years. That in part has led to a complete collapse of the long-term contracting market. We're just not seeing any long-term contracting right now. Year-to-date there's only been about 14 million pounds (14 Mlb) of yellowcake that has changed hands in the long-term market. That compares to about 140 Mlb/year average over the last decade. There's some thinking that at some point utilities have to resume contracting. That's really going to be what gets the uranium price moving upward in our view—that concern among utilities that they're not covered on the supply side, coupled with an increasingly apparent future supply shortfall, leading to more buying. As I've mentioned, Japanese reactor restarts and further supply cutbacks could be critical in the timing of this.
TMR: You have 10 uranium companies under coverage. What are your choice picks and why?
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DS: Two of our top picks are Cameco Corp. (CCO:TSX; CCJ:NYSE) and Ur-Energy Inc. (URE:TSX; URG:NYSE.MKT). For Cameco, we've got a $25/share target and an outperform rating. This company is the industry's go-to, the blue chip uranium company. It's organically growing very low-cost operations, which are for the most part in very safe jurisdictions. It has a lower-risk approach to contracts, with a targeted pricing mix of about 40% fixed-pricing and 60% market-related pricing in the contract book. The company's got a solid balance sheet. We think it's going to end Q3/13 with about $800M in working capital and another $2 billion ($2B) in undrawn lines of credit. It's also diversified across the nuclear fuel chain, with exposure not only to its core uranium mining business but also with nuclear fuel services, like conversion and fuel fabrication. It's got a stake in the Bruce nuclear power plant as well as a newly bolted-on uranium trading business, so it's quite diversified. On top of that, Cameco pays a 2% dividend. We think it offers a very attractive risk/reward proposition at these levels.
On Ur-Energy, our other top pick, we've got a strong buy rating and $1.80 target. Ur-Energy is the world's newest uranium producer, having just started operations at its flagship, wholly owned Lost Creek in-situ leach mine in Wyoming, a very favorable geopolitical jurisdiction for mining. Lost Creek has lowest-quartile cash costs. We're modeling it at about $22/lb life-of-mine average production cost there. Ur-Energy just put out a strong production update in September. We think that the ramp-up curve on production is highly derisked now. The company also boasts an operationally experienced management team that has done a great job hedging themselves. About 33–50% of design production rates are going to be delivered into fixed-price contracts through 2019. Those contracts are priced well above current market levels, providing significant near-term cash flow. Having just secured its long-sought-after low interest bond loan from the state of Wyoming, $34 million at 5.75% interest, we model Lost Creek as fully funded, and the company's balance sheet as carrying much lower risk. Furthermore, trading at only 0.6 times price-to-NAV, a 40% discount to the group average, we think the current share price offers a very attractive entry point at the moment.
TMR: Speaking of Cameco, in September you bumped your target for Cameco up $1 to $25, but the stock fell 14%. What was the thinking behind that?
DS: That change was more of a housekeeping revision. With that research note, as we always do around that time of the year, we rolled forward the discount periods on our discounted cash flow models from 2013 to 2014. We also rolled forward the valuation period on our price to cash flow to 2015. Both of those changes, in this case, had a slightly positive impact on our valuation and that's what resulted in the upward tick to a $25 six- to twelve-month target price.
TMR: How will the opening of Canadian uranium mine investment to European companies affect your uranium companies?
DS: It's certainly good news. Elimination of the non-resident ownership policy (NROP) will permit European Union-based companies to own a majority stake in an operating uranium mine. That opens the door for companies like Rio Tinto Plc (RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK) and AREVA SA (AREVA:EPA) to push forward with development of existing deposits or to buy more uranium assets in Canada. Accordingly, it increases takeover potential for companies like Denison Mines Corp. (DML:TSX; DNN:NYSE.MKT), UEX Corp. (UEX:TSX) and Kivalliq Energy Corp. (KIV:TSX.V).
Despite Cameco's apparent support for the rule change, we think it may face increased competition in Canada for personnel, equipment and permitting priority if companies like Rio Tinto and AREVA are allowed to build up production.
TMR: Denison Mines Corp.'s stock is at a four-year low, with its takeover target, Rockgate Capital Corp. (RGT:TSX), having fought Denison's bid. Your return on Denison has also been poor. Why are you recommending Denison as an outperform?
DS: The board of Rockgate has actually changed its tune and is now recommending shareholders accept the offer from Denison, which we think is a great deal for shareholders on both sides. Denison gets a significant chunk of cash out of Rockgate as well as the Falea project in Mali as a throw in for less than $0.20/lb, while Rockgate shareholders will now get shares of Denison, a company with superior size, liquidity, assets and strategy in exchange for their Rockgate shares. Falea is likely to get spun-out with Denison's other African assets if the deal closes successfully.
On our recommendation, we view Denison as one of the premier uranium explorations globally with a dominant landholding in the eastern Athabasca Basin. The company has a 60% interest in Wheeler River, the world's third-highest-grade uranium deposit that continues to grow. It's got a 22.5% stake in the McClean Lake mill, the most advanced uranium processing facility globally, which is undergoing a doubling of plant capacity at nil cost to Denison and should yield some nice toll milling revenues starting next year. It's got a 60% stake in Waterbury Lake, the western extension of Rio Tinto's Roughrider, and then a highly prospective suite of exploration projects elsewhere in the Athabasca as well as in Mongolia and in Zambia.
In addition to outstanding exploration upside at those projects, we recommend Denison on high takeout potential. We believe these growing high-quality assets in low-risk jurisdictions would be a natural fit for many strategic entities, such as Rio Tinto, particularly after the recent revision to the NROP policy, as we discussed, as well as Cameco or even Asian nuclear utilities. Denison is well run. It's got a solid cash position even without the Rockgate acquisition. Like our other top picks, Denison can weather uranium price weakness in the near term, but it's poised for that inevitable rebound in uranium prices and industry sentiment. That's really what drives our valuation on the company.
TMR: Thank you, David. You've given us a lot of insight.
DS: You're welcome.
David Sadowski is a mining equity research analyst at Raymond James Ltd., and has been covering the uranium and junior precious metals spaces for the past six years. Prior to joining the firm, David worked as a geologist in western Canada with multiple Vancouver-based junior exploration companies, focused on base and precious metals. David holds a Bachelor of Science in Geological Sciences from the University of British Columbia.
By. Tom Armistead of the Energy Report
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