Bill Herbert

Uranium One Undergoes a Resurrection

Forget Kazakhstan. Way too risky - think about it.

It's a remote Asian nation, with a flaky government, rife with corruption, and an Islamic fundamentalist population. It's not Turkey.

They will screw all foreigners eventually, but especially the yankees. We may do OK buying the ore from them after they dig it out and clean it up, ready for processing. But I wouldn't touch a company that purports to own miones in that country. No way.

Instead, try DNN (Denison Mines) for an easy triple over the next few years. Buy and hold - don't trade or get cute with it - just hold it for a while, 'cause before long Uranium will soar over $100 and DNN will fly.

I also like CCJ, but there is more upside in DNN at the present price range. If you want to do a pairs trade, that may be a lower-risk way to profit - short 1,000 CCJ and buy 15,000 DNN - you won't be sorry, and you'll be hedged against a big market selloff, should we go into the tank again. You may make some money even if the market tanks and both stocks crater - I seriously doubt we will see DNN go below $1.50 USD ever again.

Hecla Mining: Caught in a Bad Market

Jim, Ibejack, Marc -

Thanks for taking an interest and replying.

I am definitely interested in avoiding risk in this market, which is one of the cornerstones of the portfolio's strategy. It was unfortunate that HL management erred in handling their balance sheet - but that doesn't override the quality of the reserves or the very low share price. I am surprised that a savvy PE player didn't step in ahead of the bankers and make a nice deal for themselves, but that didn't happen, to Canaccord's benefit, I guess.

I would love to find a name that has great properties, under their control in mining-friendly areas of the USA, with experienced crews that as far as I know are dependable to deliver solid productivity in a rising price environment. You can find a number of companies that have lower labor costs, but do they have all the other attributes that HL has?

I would love to know of one - by all means share if you have come upon one. I'm taking the position that the extreme sell-off was part intense market panic and part fear of a bankruptcy if things turned really ugly. There have been many companies whose shares have been dumped viciously over the past six months - but as far as I can tell, HL should have good rebound potential. I liked the stock at $4, so even with the new configuration of the balance sheet, I can't resist it at $1.77!

Let's see how silver plays out, and how HL reacts to that, over the next few months.

Miners Face Uncertain Future as Uranium Deleveraging Continues

Andrew,

You are one sick puppy.

CCJ under $10 is ludicrous (although I note it actually sank to as low as $12 intra-day) when Uranium demand should be steady, and growing, for the next 50 years, at least!

This market dislocation is mindboggling in how the prices of companies with great resource bases are being trashed mercilessly - just because a bunch of idiots at hedge funds are leveraged 10-to-1 and then make reckless trades, like writing $100MM worth of CDS on banks, that they can't possibly cover.

We need to shut down 90% of the hedge funds ASAP if it results in this sort of market madness.

Sick, Sick, Sick!!!