| As reported by the Wall Street Journal,
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| | the uranium resources of entire
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| Sunday night's revelations that China
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| | countries.
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| National Nuclear Corp (CNNC) may
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| | The energy battle in Africa is good news
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| strengthen its ties to UraMin could
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| | for the two front-runners in Namibia:
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| represent a broader picture than an
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| | UraMin and Forsys Metals. We've called
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| ordinary acquisition of a near-term
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| | this a horse race, over the past several
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| uranium producer.
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| | months. Both endeavor to become the 'next
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| There is an ongoing global war for energy
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| | miner' following Paladin Resources in
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| security, which appears to be politically
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| | this country.
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| inspired. China and Russia are the main
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| | Yet, both companies are vulnerable to
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| opponents, especially in Africa, but have
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| | acquisition efforts by Russian or Chinese
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| rivaled each other, over the past several
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| | companies. Or either could be acquired by
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| years, in Central Asia. The goal for both
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| | one or more majors hoping to build up
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| nations is not only energy security but
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| | their uranium reserves. In the case of
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| political influence and alliance over
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| | Rio Tinto, acquiring one or both could
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| their targeted territories.
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| | mean expanding uranium operations in this
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| On May 12th, Russia, Kazakhstan and
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| | country.
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| Turkmenistan signed a declaration to
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| | Acquisition Candidates
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| upgrade and expand transport pipelines
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| | Just as the announcement by Energy Metals
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| along the Caspian Sea coast directly to
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| | Corp, regarding a potential sale of the
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| Russia. The project relies mainly upon
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| | company, fueled weekend speculation as to
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| the vast Turkmen gas reserves. This is
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| | the 'next' takeover candidates, the same
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| part of Russia's growing monopoly of
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| | could occur this week with African
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| Central Asian gas. Although Europe was
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| | acquisition candidates.
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| shocked by Vladimir Putin's new
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| | One might be misled into believing China
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| arrangement, the Chinese were
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| | would focus on Niger, where the company
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| flabbergasted.
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| | has built a foundation, and Russia's
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| We've been following developments in
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| | focus would remain in Namibia. However,
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| Central Asia, and had reported upon
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| | in a state visit to China this week,
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| milestone events in both of our uranium
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| | Namibian Defense force chief exchanged
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| publications, and again (with far greater
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| | views with Guo Boxiong, Central Military
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| details) in our soon-to-be-released
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| | Commission vice chairman, on promoting
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| Investing in China's Energy Crisis.
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| | relations between the two countries.
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| After more than two decades in power,
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| | In February, Chinese President Hu Jintao
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| Turkmen strongman Saparmurat Niyazov
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| | visited Namibia to sign an economic deal
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| passed away this past December. In April
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| | with Namibia giving the country a grant
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| 2006, Niyazov had signed a framework
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| | of US$4.3 million and an interest-free
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| agreement on oil and gas cooperation. By
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| | loan of the same amount. Reportedly, some
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| August, Niyazov had announced a pipeline,
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| | of the money would be used to boost group
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| designed to pump gas to China, would be
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| | tourism from China to Namibia. This is
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| opened in 2009. The deal died with the
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| | the same tactic China has utilized in
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| dictator, it appears.
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| | courting relationships in South America
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| A few weeks ago, a spokesman for China's
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| | to help develop natural resource deals.
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| National Reform and Development Committee
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| | With US$1.2 trillion in foreign currency
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| announced China was unlikely to reach its
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| | reserves, China is exercising its
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| natural gas target of a 10-percent
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| | financial biceps. In March, the country
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| portion of the country's energy portfolio
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| | formed the Huijin Fund as the state's
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| by 2010. Increasingly, Russia has shut
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| | investment arm. Up to US$400 billion have
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| China out of Central Asia in obtaining
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| | reportedly been placed in this fund for
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| long-term, multiple energy sources.
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| | investment purposes. On Sunday night, the
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| Aside from South America, where China has
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| | Huijin Fund invested US$3 billion to
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| strengthened the country's ties with
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| | purchase a stake in about 9.9 percent of
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| Venezuela and others, Africa is a prime
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| | the Blackstone private equity firm. Our
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| hunting ground for China's future energy
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| | research suggests the fund is likely to
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| security. China has established a strong
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| | strongly invest in natural resources.
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| foothold in the Sudan for petroleum. But,
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| | On this basis, we can not rule out a
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| Africa is rich in uranium deposits.
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| | simple carving of Africa. We don't
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| According to a report published by the
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| | believe China will quietly step back and
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| International Atomic Energy Agency in
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| | focus the country's uranium acquisition
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| 2005, Africa has 18 percent of the
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| | efforts in Niger, permitting Russia to
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| world's known recoverable uranium
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| | concentrate on Namibia and South African
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| resources - about six percent less than
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| | uranium.
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| Australia and one percent more than
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| | In Niger, we covered two 'early days'
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| Kazakhstan. We began coverage on both
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| | prospective uranium juniors over a year
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| Namibia and Niger, after Russia sent a
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| | ago. North Atlantic Resources acquired a
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| delegation to Egypt to discuss the
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| | uranium permit in the 1900-square
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| nuclear renaissance. At the time, our
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| | kilometer Abelajouad in this country.
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| research pointed to Africa, particularly
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| | This past April, the company increased
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| those countries, as ripe for future
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| | its holdings to nearly 3,000 square
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| uranium production. Chinese prospectors
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| | kilometers. In late April, Northwestern
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| raced to Niger within weeks after our
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| | Mineral Ventures announced uranium
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| initial coverage.
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| | mineralization in assays from rock
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| During 2006, Namibia became saturated
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| | samples after a first-pass reconnaissance
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| with numerous exploration plays hoping to
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| | on its In Gall and Irhazer uranium
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| capitalize on the country's uranium
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| | properties. Both would need to further
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| resources and relaxed environment.
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| | explore their properties before
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| Consequently, the Namibian Minister of
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| | attracting serious interest from the
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| Mines and Energy closed the country's
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| | Chinese.
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| exploration window. Since then, Niger has
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| | However, in Namibia both UraMin and
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| become a new hunting ground. We expect
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| | Forsys Metals are actively progressing
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| this country to become just as saturated
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| | toward mining uranium on their
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| as Namibia has been.
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| | properties. Either could be the first,
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| China is eager to capitalize upon the
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| | but we believe both should become winners
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| continent's uranium resources before
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| | in the uranium bull market. Because China
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| Russia outmaneuvers them as has been
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| | has carefully aligned with UraMin, or at
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| accomplished in Central Asia.
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| | least shown an inkling to do so, we
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| According to an email we received from
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| | suspect Russia might begin to look more
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| TradeTech's Gene Clark, after presenting
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| | carefully at Forsys Metals. This is
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| at the China Power & Alternative Energy
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| | purely speculation based upon our premise
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| Summit on May 18th, he told us China's
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| | of 'uranium Politiques.' We do not have
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| official target for nuclear power
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| | any 'inside track' on this matter.
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| capacity was '40 GWe by 2020 and another
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| | Fortunately, we had the opportunity to
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| 18 GWe in the following five-year plan.'
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| | chat with Forsys chief executive Duane
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| This confirms China's aggressive plans to
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| | Parnham late last week. His company had
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| acquire sufficient uranium to reach this
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| | announced the completion of the
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| capacity, and would be foolish to rely on
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| | pre-feasibility study on the company's
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| just Australia.
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| | Valencia uranium deposit in Namibia. We
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| Typically, China has built its energy
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| | missed the company's conference call, but
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| portfolio through numerous deals across
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| | were allowed the opportunity to discuss
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| multiple regions. This past October, Yang
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| | his company's prospects and future plans
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| Changli, vice president of China National
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| | during a telephone call.
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| Nuclear, said it would seek uranium not
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| | The company's pre-feasibility study was
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| only from Australia, but from Canada,
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| | prepared by Australia-based Snowden
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| Kazakhstan, South Africa and Namibia. In
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| | Mining, which used the guidelines of
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| an interview Yang gave during the 15th
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| | Australia's JORC code. Subsequently, the
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| Pacific Basin Nuclear Conference, he
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| | Valencia uranium mineral reserve was
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| said, "China won't rely on any single
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| | classified as Probable Reserves. These
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| supplier of uranium because of energy
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| | were calculated at 24 million pounds
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| security considerations.
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| | U3O8.
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| Namibia is the First African Focus of
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| | We asked about production. "We are now
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| Uranium Politiques
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| | modeling 2.4 million pounds per year,"
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| On May 14th, Russia's second-largest bank
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| | Parnham told us. He expects to payback in
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| Vneshtorgbank and Russia's state-run
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| | less than two years. With Forsys as with
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| nuclear exporter Tekhsnabexport announced
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| | all near-term producers, some early
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| they were considered a joint venture to
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| | conversations have begun about
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| operate in Namibia through licenses they
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| | pre-selling the company's uranium
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| directly hold and through investments in
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| | production after production has
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| other companies which have obtained
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| | commenced.
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| licenses in Namibia.
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| | His company's news release talked about
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| In March Russian Prime Minister Mikhail
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| | six month of stripping during the initial
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| Fradkov announced his country was
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| | part of the operation so we started
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| prepared to building nuclear plants in
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| | there. "We'll start when we get a mining
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| Namibia. Neighboring South Africa had
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| | license and then looking at production."
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| previously warned Namibia to expect
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| | When will the company complete its
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| reductions in energy supplies. Namibia is
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| | ongoing environmental assessment? "We are
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| dependent upon South Africa for
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| | hoping to have an environmental decision
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| electricity and has forecast an energy
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| | by year end," Parnham told us. "We are
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| deficit of 300 megawatts within the next
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| | hoping to have enough data to apply for a
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| three years.
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| | mining license in early 2008. If that's
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| On May 10th, Russia and Kazakhstan signed
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| | successful, then obviously the decision
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| an agreement to set up the International
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| | to go forward will be made at that time."
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| Uranium Enrichment Center, anticipated to
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| | For the time being, the company plans to
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| come onstream by 2013. As part of this
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| | expand its resource. "The pre-feasibility
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| announcement, Sergei Kiriyenko, head of
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| | is just the first snapshot of the
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| the Federal Nuclear Power Agency, said,
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| | situation," he said. "We are finding the
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| "Any country can become a member of the
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| | pit optimization study is only looking at
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| center by signing an intergovernmental
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| | a very small portion of the overall
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| agreement granting it guaranteed access
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| | resource." Does that mean the resource is
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| to uranium enrichment services." We
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| | actually larger, then? "It's a heck of a
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| conclude Namibia may wish to participate
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| | lot bigger," he told us. "It's just a
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| in this arrangement.
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| | function of how much data you have
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| Enter CNNC on Sunday night. The Chinese
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| | available to punch into the model. Then,
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| company's deputy general manager for
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| | how much does the model give you back?
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| uranium procurement announced to
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| | The evaluation process is ongoing. You'll
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| Bloomberg News that CNNC and UraMin will
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| | probably see a change in the pit design
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| start 'more formal' talks this week.
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| | very shortly because we have the ability
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| UraMin is a prime acquisition candidate
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| | to move more resource into the reserve
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| for the Chinese because of its uranium
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| | category."
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| prospects in both Namibia and Niger. The
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| | We talked about his company's horse race
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| company also has holdings in South Africa
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| | with UraMin. How does it look? "Neck and
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| and the Central African Republic.
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| | neck, toe to toe," Parnham said. "I think
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| We are now facing a new era of uranium
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| | it shows there's opportunity in Namibia,
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| politics or rather 'Uranium Politiques.'
| |
| | and that's good that there are a number
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| And there is good reason for this to
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| | of us working for a common goal."
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| escalate. Yesterday, the U.S. Energy
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| | Finally, we asked what has emerged as the
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| Information Administration issued
| |
| | key question: Is Forsys a ripe plum for
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| 'International Energy Outlook 2007.' The
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| | the picking. He offered both sides of the
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| report announced, "World marketed energy
| |
| | coin. "Where the real opportunity lies is
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| is expected to grow by 57 percent between
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| | putting a property into production," he
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| 2004 and 2030."
| |
| | responded. "The operation isn't all that
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| The most rapid growth in energy demand is
| |
| | difficult so it's not a deposit that our
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| anticipated in non-OECD Asia. The
| |
| | expanding team couldn't put into
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| majority of this energy demand growth
| |
| | production." And then Parnham left the
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| would come from China and India. This was
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| | door open. "Anything can happen. It's an
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| the reference case - the middle ground of
| |
| | open market, and we are a public company.
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| growth.
| |
| | But, we are certainly geared toward
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| Also on Monday, leading Russian nuclear
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| | putting this into production."
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| expert Yevgeny Velikhov, head of the
| |
| | And from what we've seen among the
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| Kurchatov Institute, told reporters at a
| |
| | recent, significant consolidations, those
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| news conference that the recent surge in
| |
| | companies who have commenced production,
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| uranium prices "may still grow by another
| |
| | and those closest to production, are the
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| order of magnitude." He believes the
| |
| | prime acquisition candidates. Why should
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| uranium price will continue to rise as
| |
| | companies developing projects in Africa
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| global uranium demand soars while
| |
| | become the exception instead of the rule?
|
| supplies remain tight. "The global energy
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| | Especially when two super powers are both
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| market is very turbulent," Velikhov said.
| |
| | eagerly trying to establish stronger
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| "The uranium price can hit any mark at a
| |
| | uranium footholds in this continent.
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| time of crisis." Ironically, both crisis
| |
| | COPYRIGHT© 2007 by StockInterview, Inc.
|
| and turbulence have come about because of
| |
| | ALL RIGHTS RESERVED.
|
| the Asian and Russian scramble to lock-up
| |
| |
|
