A big bull market is taking place right now… one few people notice.
It’s the bull market in uranium I’ve been pounding the table on for the past year.
For a picture of this bull market, have a look at this chart of Cameco, the “ExxonMobil of uranium.” It’s up 107% since its recent low in July 2010… and it just struck a new 52-week high.
To recap, uranium is the fuel that powers nuclear reactors. And it was the center of a wild speculative frenzy back in 2007… one that was crushed over the next three years. Now, things are getting “less bad” in the sector… and there’s a unique way to profit.[ad#Google Adsense]You see, when a big mining trend takes place, we often see companies in the space begin to acquire one another.
During gold’s unbelievable run in 2010, we saw several junior gold miners bought out. Big gold miners bought Canplats, Andean Resources, and Brett Resources. The gains for early shareholders can get ridiculous…
Shares of each jumped nearly 150% during the takeovers. Brett Resources was a $36 million company in April 2009. It eventually sold for $547 million in August 2010. That kind of deal could easily happen among uranium juniors in 2011.
The key to those gold deals was quality assets. It will be the same with uranium. There are three major districts we need to watch…
First, the Athabasca Basin of Canada. This giant basin lies in Northern Saskatchewan and skims into Northeastern Alberta. Projects near Cameco’s giant Rabbit Lake Mine are in the right place for high-grade uranium deposits. There are several juniors up there worth watching.
Second is the Macusani uranium district in Southeast Peru, near the border with Bolivia and Chile. According to a Peruvian Geological Survey bulletin, nine areas around the town of Macusani could hold 200,000 tons of high-grade uranium ore. That attracted many juniors into the region. The largest of those companies could be rolled up into one big company this year.
Finally, Australia has several fantastic regions for uranium exploration. It contains roughly 31% of the world’s known recoverable uranium reserves. The main concentration of projects is in northwestern Queensland and around the Jabiluka project in Northern Territory.
I can’t overemphasize the importance of uranium. The emerging world’s demands for energy are only going higher… and uranium is one of the most concentrated fuels we have. Its value will go up.
Conservative investors can own a big company like Cameco to profit (we’re up 67% in six months in the S&A Resource Report). Investors willing to take a little risk should concentrate their research on junior miners in the three areas we discussed. Those stocks should ride the bull market in uranium prices and could see a double or more if there’s a takeover.
— Matt Badiali[ad#jack p.s.]
Source: The Growth Stock Wire