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Last Friday, April 11th, a Reuters report entitled "Japan approves energy plan reinstating nuclear power" would normally have been seen as a boost to uranium stocks. Instead uranium miners have pulled back, at least marginally.

One might argue that uranium stocks have been among the best performers this year and were due to consolidate gains, and that the overall market has been weak. However this was not just the usual bullish uranium related news that we have seen lately, about higher demand from more nuclear power plant builds worldwide, or less supply from mine closures, cancelled expansions and recycled uranium programs that ended recently. Japan shutting down nuclear power was the major catalyst that brought the uranium mining industry to its knees three years ago, and Japan restarting its nuclear plants is the major catalyst that can jump-start the industry again.

Are believers in uranium's near and long-term growth story missing something? I don't think so. Japan has changed its energy policy by reversing plans to gradually mothball its nuclear power plants. We said this would happen. Now it's official, and nuclear power will restart in Japan.

While the article got that main point right, its next breath tone is interesting, "a move likely to be unpopular with a wary public following the 2011 Fukushima disaster." Following must mean just after the event, because in December 2012 Shinzo Abe was elected president and two months ago Yoichi Masuzoe was elected governor. Both are pro-nuclear and were elected to restart Japan's nuclear power. What the wary public wants is an end to: energy blackouts, higher costs, deficits and pollution, all which worsened after Japan switched from nuclear to LNG and other dirty high-cost fossil fuels.

The article says that utilities are suffering from $50 billion in operating losses, can't afford to upgrade their nuclear plants, and have asked for government bailouts. The reason for these huge operating losses is because they have had to pay $90 billion on replacement fossil fuels. Then it says they have spent $16 billion in upgrades to meet safety guidelines, but says that up to two-thirds of Japan's 48 idled reactors may have to be left closed because of the high cost of further upgrades. The consultant quoted concludes that "Japan will write off most of its nuclear 'assets' and move on."

That's like saying Japan and its utilities are broke because of the problems caused by importing fossil fuels, but they have to stay with fossil fuels as they can't afford the solution - which is upgrading and restarting their nuclear power plants.

Does it make any sense for Japan to continue powering itself with unreliable, high-cost and polluting fossil fuels when they have 48 operable reactors? Why stay the course of high power bills, operating losses for its utilities and trade/fiscal deficits for a country that used to be known for its surpluses. No it doesn't make sense; I believe Japan will restart most, if not all, of its reactors step-by-step.

Cheers for Japan's plans for more renewable energy. But this will take decades to produce even a small fraction of its base-load needs. Until then nuclear power is still Japan's only practical solution. It costs a lot less time and money to upgrade a reactor than to build a new one, so doubters of Japan's restart intent might ask why shows Japan also has 3 new reactors under construction, 9 planned and 3 proposed. Bottom line, changing Japan's energy policy on nuclear power should be seen by uranium investors as a big step forward and U3O8's low $33/lb. spot price as an opportunity.

Uranerz Energy Is Now A Producing U.S. Uranium Miner

It's official, Uranerz Energy (NYSEMKT:URZ) has graduated from the exploration to development to now the production stage. Nuclear Regulatory Commission (NRC) inspections have concluded and Uranerz has been approved as the United States' newest uranium producer. Here's URZ' Tuesday news release: "Uranerz Starts Uranium Mining Operations at Nichols Ranch."

This is a major accomplishment and a testament to Uranerz' management skills as only a small percentage of mining companies ever make it to the production stage. This is especially so with uranium mines as they are the most highly regulated, a journey for Uranerz that started a decade ago. With fewer uranium companies than for most other commodities, Uranerz joins an elite group of uranium companies that can also call itself a producer.

Uranerz Energy has been ready and waiting for this final government go ahead for a while. Within hours of receiving it there was no ribbon cutting ceremony, ISR uranium mining production just started. The company's Nichols Ranch mine is expected to produce 1Mlbs./year on average, and at that rate it could be producing for over 13 years at a cash operating cost of $35/lb., with final processing to be done at Cameco's (NYSE:CCJ) nearby Smith Ranch-Highland plant. For at least the first seven years a significant portion of Uranerz's yellowcake will be sold to major U.S. utilities such as Exelon (NYSE:EXC) under premium off-take agreements signed when uranium prices were significantly higher.

Uranerz's March 14th Q4 financials showed more than $11M in working capital at the end of 2013. The company now likely has around $7-8M. As uranium production begins, cash flow is anticipated to start in just a few months. Uranerz is better positioned to grow compared to other small to mid-cap uranium miners with more debt, nearly depleted treasuries and not hedged against today's low uranium prices. We look forward to Uranerz growing through timely acquisitions, the drill bit, and via production with higher U3O8 prices.

Uranerz's mine is permitted for up to 2Mlbs./year, which it can organically grow by further exploring its 80k acres in the Powder River Basin of Wyoming. The company has already identified combined NI 43-101 U3O8 resources of over 19Mlbs. at Nichols Ranch and its nearby satellite projects called Hank, West North-Butte, South Doughstick and related properties North Rolling Pin and Reno Creek. URZ even looks attractive as an acquisition target, with a market cap of $134M at US$1.56 per share which is one of the lowest market-caps I can find among uranium producers anywhere.

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