No. of Recommendations: 13
My suggestion is Cameco (CCJ or CCO.to). <Pause while the screams and hubbub die down>.

This is a very large miner of uranium on the planet but does so much more.

About Cameco
Cameco is one of the world's largest uranium producers accounting for about 16% of the world's production from its mines in Canada and the US. Our leading position is backed by about 480 million pounds of proven and probable reserves and extensive resources. Cameco holds premier land positions in the world's most promising areas for new uranium discoveries in Canada and Australia as part of an intensive global exploration program. Cameco is also a leading provider of processing services required to produce fuel for nuclear power plants, and generates 1,000 MW of clean electricity through a partnership in North America's largest nuclear generating station located in Ontario, Canada.

More important than their nearly half a billion pounds of reserves is that they own the highest grade uranium mines in the world and anyone in the mining industry will tell you that high grades make for low cost production.

The very real tsunami disaster in Japan and political talk of shutting down nuclear power in Germany have made nuclear power sound like a graveyard for investment but the current operating 400 plus reactors in the world are still producing tremendous amounts of difficult to replace clean relatively cheap energy.

The main reasons I suggest Cameco currently are first the stock has been beaten down to a value price by the news and there is a serious shortfall looming in uranium supply less than two years away.

The “US-Russia HEU agreement” that basically turns old Russian weapons grade “Highly Enriched Uranium” into fuel for reactors runs out in 2013. The current supply from mines is insufficient to supply current needs.

http://www.wise-uranium.org/epru.html

Russia not planning to extend HEU-LEU deal
Russia is not planning to extend the Highly Enriched Uranium (HEU) Agreement with the U.S., Russian Federal Atomic Energy Agency (Rosatom) chief Sergei Kiriyenko said. The HEU-LEU agreement will expire in 2013.


The company has two long term agreements to provide fuel for Chinese reactors.
http://www.cameco.com/media/news_releases/2011/?id=539
http://www.cameco.com/media/news_releases/2010/?id=529

The company pays a small (to me) dividend but the potential growth in the stock price makes it worth a look.

A few interesting tidbits:

1. They have made an offer on a small company (Hathor (HAT.v)) with a fairly high grade find near their area of operations. While they claim the offer is in keeping with what has been offered elsewhere for the reserves in the ground in truth the offer is low as the comps are against companies with much lower grades. If they pull this acquisition off at that price it will be a real coup.

http://www.reuters.com/article/2011/08/30/cameco-hathor-idUS...

2. The company has a lot of cash on hand, in a recent interview the new CEO mentioned looking for acquisitions and no need to go to market for money.

3. The nuclear fuel industry is very tight knit and relatively small. With few exceptions of sales on the spot market most sales are by long term contract and most of those contracts are negotiated after summer vacations are over. Since everyone is aware of the looming shortage methinks Cameco will be in a good position when the deals are cut this year and we should see a move up in the price.

Do your own DD, I own some and am considering adding to it.


Tim <glows in the dark> 443
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No. of Recommendations: 3
I've been in CCJ since our good friends at Agora recommended it about a month before the tsunami. Rode down with it then, and when Germany announced a policy shift shortly thereafter. The down draft was so swift that I saw no point in taking loses at the bottom. Japan and Germany were noisy bits of sound, but the rest of the world...China, India, and the ME are all going ahead with nuclear plans.

So it's a sit tight and wait with this one.
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