The King Of The Boom Market

Palisade Research November 27, 2017
Category: Research

Had you invested in Energy Fuels in 2006, you would have made 45 times your money.

And if you were lucky enough to invest in Mike Beck’s UraMin, you would have made 625 times your money in just two years.

A $5,000 invested would have returned $3,125,000. . .

In 2003, If you invested $5,000 in Paladin Energy, you would have made over $6,500,000 in just four years. . . 1,330 times your money!

What do these three stocks have in common?

They are all uranium stocks of course.

Commodities are accepted as the most volatile public market space. As a subset, uranium is the most volatile.

What that means is that the gains in the space can be phenomenal.

Many of the wealthiest of resource investors have made their fortunes in uranium!

And there is no real secret to their success – all it takes is some patience and a contrarian state of mind.

The main thing to remember?

It’s that “uranium is cyclical. . .

It goes up for a time, and then it goes down for a time.

Sort of like waves of the ocean rising and falling in a predictable rhythm. . .

And if you have the balls to place your bets when its down, you will make a lot of money.

Let’s look at Paladin Energy again. . .

In 2002 they acquired their flagship project, Langer Heinrich, for only $15,000.

And by 2003, all of their projects were uneconomical, but offered incredible optionality if the price of uranium was to rise –

Paladin Energy had a war chest of 90 million pounds of uranium, but their market cap was only under $1 million.

Therefore, a couple years later. . .

As the price of uranium started to sky-rocketed. . .

Paladin began advancing these now very economical projects.

And eventually, the company’s market cap peaked at a $4.2 billion valuation. . .

UraMin followed the same path. In 2005, Mike Beck and his team spent $4 million to amass a portfolio of 170 million pounds of low-grade uranium.

Touting 20 million pounds of production by 2012, UraMin was bought before any substantial work was actually done.

In a full-fledged bidding war, UraMin was eventually acquired for $2.5 billion in 2007.

The Next Uranium Bull Mega Acquisition – GoviEx Uranium (CVE:GXU, OTC:GVXXF, 7GU:FRA)

GoviEx Uranium is on the same trajectory as Paladin Energy and UraMin.

Govind Friedland and Daniel Major have built a portfolio of 210 million pounds of uranium.

And they keep adding…

The company just closed the acquisitions of the Chirundu and Kiraba Valley tenements in Zambia – adding another 11.2 million pounds of JORC resources.

Combined with the Mutanga project, GoviEx now owns 140 of strike length in a prolific uranium district.

Also, like Paladin and UraMin, the projects are in Africa and fast-tracked to production.

In fact, GoviEx plans to be producing by 2020.

The company’s flagship project is Madaouela, which touts an after-tax NPV8 of $340 million and operating costs of $24.50/lb.

GoviEx also just released a PEA on Mutanga. The project has an after-tax NPV8 of $112 million with operating costs of $31.10/lb.

Madaouela and Mutanga each have the potential to produce more than 2.4 million pounds U3O8 per year.

With uranium trading at $24.50/lb, GoviEx is on the cusp of profitability. This means that every dollar increase in uranium provides incredible upside in the stock.

For example, if uranium was at $25.50/lb, Madaouela would be making $1/lb. If uranium were to increase to $26.50/lb, Madaouela would double its profit.

In other-words, a 4% increase in uranium results in a 100% increase in profit.

When uranium finally makes its move – GoviEx provides the most leverage compared to any other developer.

It also helps that GoviEx is the Friedland Family’s uranium vehicle.

Billionaire Robert Friedland is betting GoviEx will be the next Voisey Bay or Ivanhoe Mines.

Friedland’s masterpiece in Voisey Bay, was acquired in 1996 by Inco for $4.5 billion.

Or his recent mega copper deal, Ivanhoe Mines, which has seen a gain of 625% since 2016. Ivanhoe now commands a market cap of C$3.7 billion.

Don’t miss this cycle’s Paladin and UraMin. . .

GoviEx has all the elements to create multi-generational wealth.

But do you have the patience and the defiance to make the trade?

Palisade Global Investments Limited holds shares of GoviEx Uranium. We receive either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate. The information contained in such write-ups is not intended as individual investment advice and is not designed to meet your personal financial situation. Information contained in this report is obtained from sources we believe to be reliable, but its accuracy cannot be guaranteed. The opinions expressed in this report are those of Palisade Global Investments and are subject to change without notice. The information in this report may become outdated and there is no obligation to update any such information. Do your own due diligence.

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4 Responses on “The King Of The Boom Market”

Bill says:

This is all assumptions. We will go through the same bull market. Of 2001 to 2007. There was a couple things that happened that caused to spike . Wiith. The african cheap tonnage of uranium. Coming on the market and the husab mine. Coming to production in 2018. We will have a oversupply. The nexgen. Mine is coming coming on 2026. The supply will outright demand until 2025. With due respect . I am a owner of goviex. But I donnot see uranium prices even with cameco cut to go go higher because of the overweight. Of supply from the market in the past few years. The utilities have told the miners to get lost They will not sign longterm contracts . So be ready to. Sit on these stocks up to to 10 fears and just like the spike this past two weeks the big investors will not get in Because they know they can get burned. So yes it was spectacular before. , but good luck if happens again any time soon.

Malcolm says:

Bill, It was spectacular three times before and the conditions that caused it before are coming into play again. Of course the market is not the same as it was previously…it never is. The big wildcard this time around is Kazakhstan. Will they continue to pump cheap Uranium onto the spot market or will they play the shutdown of mines around the world to their advantage. They know very well that no nuclear power station can operate without Uranium – therefore they have a captive industry that MUST have what they can provide. Since they are going to sell part of Kazatatomprom in 2018 and obviously want the very best price they can get for it….I really doubt they are going to want the spot market at these low values. So yes indeed this market is different….it is way way more explosive than it was before and it will be manipulated by both the Russians and the Kazakhs to their advantage….something which did not exist before.
The Husab mine output is entirely dedicated to the massive nuclear build up in China and its effect on the spot and term markets is zero.
A Uranium Bull market does not depend upon luck. There are 59 new reactors being built around the world and many plant life extensions being approved. Even Bangladesh has begun construction of the first of two 1000 MW nuclear power plants and that plant is designed to operate for 100 years.
The demand for Uranium is increasing and the supply of Uranium is decreasing. When the utilities cannot get the Uranium they need that will ignite a buying frenzy that will dwarf previous Uranium bull markets.
Just a matter of time and every day that goes by means more uranium is consumed than is produced. There can be but one outcome of that.
Malcolm,

Bill says:

Hi collin, how come you are removing my posts. Is there anything I am saying that you do not approve off?

Bill says:

All true Malcolm.However their is is a150 million tonne of uranium over glut from the past 6 years overhanging the market . This can take along time to clear itself with the cuts before the prices move. Or utilities come back . So yea it will happen but when is the big question . It could be be 3to 5 years. Unfortunately. With uranium you need patience of mount everst and be mentally ready to take pain for years before you see your great returns .

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