Given the well-documented collapse of the junior mining sector in the past 15 months, a step-up in merger and acquisition activity is considered inevitable by many industry insiders.

In their "Junior Mining Weekly" report, analysts from Canaccord Adams reiterated their belief that in the long-term, small-cap miners will not trade at a discount to their cash, with their projects treated as liabilities. But since that is often the case right now, "There are excellent opportunities [for M&A] in this current negative environment for those companies bold enough to act."

Aurora Energy Resources Inc. (AUEGF.PK) investors appear happy with the appointment Wednesday of Bruce Dumville as Aurora's new president and CEO.

Shares in the uranium miner were up more than 3% on Thursday after it was announced that Mr. Dumville will begin his new post on Sept. 8, 2008, replacing Mark O'Dea who will become Aurora's deputy chairman. 

Ron Parratt, president and CEO of AuEx Ventures, takes The Gold Report on an exclusive tour of the world's most geologically attractive areas for precious metals exploration. As a geologist and exploration manager for 30 years, Parratt has an exceptional record of discovery and development of North American gold projects and is credited with leading teams to more than 20 million ounces of gold in Nevada. He shares his passion for the industry and his enthusiasm for some of his favorite junior explorers.

TGR: As you look around the world, where are the geological hot spots for precious metals?

Aurora Energy Resources Inc. (AUEGF.PK) has highly promising uranium deposits in Labrador. However, the big challenge right now is getting approval for a mine from the Labrador Inuit, who recently voted in favor of a three-year moratorium on uranium mining.

On Thursday, the company took a big step towards gaining that support. It unveiled a community outreach program that provides jobs for local communities, funds community initiatives, and ensures them that mining is safe. This is a very wise move, according to RBC Capital Markets analyst Adam Schatzker.

Shares of Aurora Energy Resources Inc. (AUEGF.PK) and parent company Fronteer Development Group Inc. (FRG) were shredded on Tuesday after the Nunatsiaq government in Labrador voted in favor of a three-year moratorium on uranium mining. That continued a downward spiral that has gone on for several weeks due to political concerns.

RBC Capital Markets analyst Adam Schatzker called the share price drop an "over-reaction." His opinion is that the moratorium was put in place to give the Inuit government time to put together a Land Use Policy [LUP] that will provide a framework in which mining can occur.

Aurora Energy Resources Inc. (AUEGF.PK) shares plunged 33% on Wednesday after the company confirmed that the Nunatsiavut Government voted eight to seven in favor of implementing a three-year moratorium on uranium mining on Labrador Inuit Lands, but will continue to allow uranium exploration. On Wednesday, the stock closed at C$3.50, down C$1.77.

Dr. Mark O'Dea, President and CEO, Aurora Energy Resources Inc. said:

The Nunatsiavut Government has indicated that it is supportive of natural resource development and open to evaluating ongoing project information, but needs additional time to prepare for significant developments like the Michelin Project. Currently there is no uranium mining on Labrador Inuit Lands and there are no plans for uranium mining operations for the next three years.

The past few weeks have been quite difficult for uranium investors as the market in general remains reluctant to take on risk. This risk aversion has led uranium equities downwards with some companies' stocks either at or approaching multi-year lows and our uranium index once again near this year's lows. Until the market as a whole has a good feeling for what to expect with the mortgage related write-downs, volatility will most certainly surround such high risk, high reward situations such as our junior uranium mining stocks.

Some stocks have faired quite poorly this year as investor's shore up their cash positions and lock in gains before they have the opportunity to lose them. On the other hand, there are some stocks which have certainly delivered stellar returns to their shareholders during this market downturn. The difference between these companies, the winners and the losers, is that those who are up have provided good news to the investment community while the losers have reported poor news or no news at all. In these types of markets it IS possible for no news to be bad news. UEX (UEXCF.PK) has reported very good grades as they continue to drill with AREVA at Shea Creek which has provided the fuel to power the stock up to new all-time highs recently. Paladin [PDN.TO] and Uranium One [UUU.TO] have not been so fortunate. Both have failed to meet their production goals and been taken to the woodshed by investors for their poor performance. In markets such as the one we are currently in, investors do not like surprises and are less willing to allow a pass for poor performance as they may during a powerful bull market plowing forward.