“Hidden Assets in Natrona County” (Ian Cooper)

By Travis Johnson, Stock Gumshoe, March 25, 2010

I haven’t looked at a teaser for any of Ian Cooper’s newsletters in a while, so when this ad for the Pure Asset Trader crossed my screen it piqued my interest — it’s got a few teasers in it, some of them a bit thin on the clues, but I think we can probably tickle the Thinkolator until it divulges at least the main “secret” for us …

Cooper has sent some interesting ideas our way in the past by way of his breathless teasers, but we haven’t yet seen any subscriber reviews of his Pure Asset Trader (if you’ve subscribed you could be the first reviewer, just click here) — he also edits a couple other newsletters that are also published by Angel, and we do have a few reviews of those.

So … what’s he teasing us about today?

The hook for the ad is the “Natrona Challenge” — a guarantee that they’ll have 23 double-digit winning picks over the next year or they’ll give you $1,500, which is about twice what the newsletter costs. I don’t know how they track the performance of their picks, or if this guarantee will end up paying off if everyone jumps in a handbasket and presses the down button on the elevator, but that’s what they’re offering, so they have at least some degree of confidence in Ian’s picks here.

And what are they? The headliner is the “Hidden Assets in Natrona County” tease about a uranium stock …

Challenge Winner #1: Hidden Assets in Natrona County

“This kick-off play is so well positioned to make you huge money that we named this year’s Challenge after it…

“Natrona County, Wyoming, is covered with rolling hills and Ponderosa Pines as far as the eye can see.

“Yet, beneath this pristine land lies a very powerful moneymaking secret….

“The resource I’m talking about is uranium.

“It may not sound glamorous, but it’s about to make a bunch of people very rich.

“You see, with green energy mandates looming around every corner, uranium demand is increasing exponentially.

“And a huge reason for this increase is the U.S. government.

“In his State of the Union address, President Obama called for dramatically increased nuclear reactor construction…

“Shortly thereafter, he tripled the amount of loan guarantees for nuclear power to $54 billion in his budget request.”

And then we start to get into some specifics about the company being teased today:

“The thing is, in order to support this nuclear energy revolution, we’re going to need a heck of a lot of uranium.

“And as this is realized, more and more eyes are turning to the folks who can do two things:

“1) Actually produce the amount of uranium needed; and 2) Mine the uranium at a low cost while remaining environmentally friendly.

“I can tell you, not a whole ton of companies fit the bill on this one…

“But, there’s one that most certainly does.

“One junior miner sits on more than $64 billion worth of uranium”

So yes, I feel your pain, great Gumshoe readers — “oh, no, another junior miner!” I promise, I’ll write about something else tomorrow for the Irregulars, and I’ll make sure to mix in some more “normal” investments next week. I know a lot of you are huge fans of uranium, gold, silver and mining stocks of all flavors … but we can’t get stuck in a rut, eh?

So what’s the difference about this little junior miner that Cooper is teasing?

“… today, there’s a cutting-edge uranium miner with an expert solution. It’s called In Situ Recovery (ISR) mining….

“ISR mining requires very little drilling — and it’s much less invasive than standard open pit and underground mining procedures.

“It’s also much, much cheaper than traditional mining methods.

“In fact, startup costs are as much as 13 times less, and operating costs are 3 times less per year.

“It’s the best possible scenario for recovering uranium the world has ever seen.

“And I can’t find a company with more know-how than the experts I mentioned just a few seconds ago.

“Heck, not only do these guys actually operate seven separate ISR mines, but they also deal with the licensing, designing, and construction of these mines.

“Even better, these guys are currently sitting on over 700,000 tons ($64 billion worth) of Wyoming’s ripe-for-the-picking uranium.

“And just as an idea, that’s 218 times more of this precious resource than Cameco — the world’s largest uranium producer — currently sits on in the state….

[the teased company owns] 120,000 acres worth of uranium-rich deposits.”

And they even include a little diagram of the In Situ Recovery process for mining uranium – which is indeed a preferred method in several areas in the US and overseas, depending greatly on local geology, but it’s been around for a long time (about 50 years or so, from what I can tell). Essentially, this is a process by which they extract uranium from sandstone by injecting a water-based solution that dissolves the uranium, pumping that dissolved uranium solution back out, and extracting the uranium for processing (and as always with your friendly neighborhood Stock Gumshoe, this is a gross oversimplification).

And a map of the company’s holdings is thrown in, to give an idea of the huge land area they control in Wyoming… which, delightfully enough for me, allows for a confirmation that this stock is indeed our old friend …

Uranerz (URZ in both NY and Toronto, click here for a free trend analysis of URZ from MarketClub, one of my advertising partners — the nice run that started a couple months back fizzled a little, so now they put this one in “sidelines mode”)

Though perhaps “old friend” is exaggerating a bit — the stock was talked about a lot back in 2006-2007, when the stock was newly trading in its current form (the company’s significantly older, I don’t know the whole history) ,and was in the process of a nice share run-up to all-time highs of about $7 a share. And not coincidentally, that’s when I wrote about them, for a teaser from a different newsletter from this same publisher, they called one of the company’s advisers the “Pope of Uranium”. I don’t know whether that “Pope” is still with Uranerz, or even still alive (his name was Fritz Dahlkamp, he really is a uranium expert of long standing, and author of a number of books about global uranium resources).

But anyway, Uranerz is currently focused on building a viable In Situ Recovery business in Wyoming, which is already the core of the US uranium mining business. And that map that Cooper includes in the teaser is an exact match for Uranerz’s own map of their land holdings — you can see the map here if you like, it’s essentially a guide to the central Powder River Basin and the uranium companies that are exploring or producing there. Uranerz has several projects that they’re developing, some near Cameco projects, but the vast majority of their land is not being actively explored just yet. This recent press release explains the progress of their three most advanced projects (the most advanced are in the “advanced permitting and licensing” stage), and they also updated the NI 43-101 estimates for those projects this month.

Uranerz is, from what I can tell, a very long way from actually producing uranium — but that doesn’t mean it’s not valuable. The shares certainly move on overall sentiment for the uranium and nuclear industries, both of which got a big boost from Obama’s push for nuclear power in recent months (the shares were down near a dollar before that latest boost from the feds, and spiked briefly over $2 earlier this month — as I type they’re currently at $1.89. With the potential for their large land holdings there’s probably room for the stock to continue to be highly leveraged to the price of uranium and to future moves to boost nuclear power, though I always feel a bit more comfortable with speculative stocks like this if I have some idea if and when they’re going to make money.

In this case, they’re at least in decent shape financially — they raised about $20 million late last year and have no debt, so they’ve got some money to burn for a while. The market cap is right around $120 million, they have no revenue, and they’ve lost an average of about $2 million per quarter over the last year. I assume that as they move forward in permitting and developing these potential mines they’ll need to raise a substantial amount of money, but that’s just my assumption — they have made uranium sales agreements with two utilities, so they know they’ll be able to see the stuff when they eventually produce some.

Uranium companies are an odd lot and tend to be quite volatile, in large part because of the uncertain future demand for the fuel and the political backdrop. USEC (USU) has gotten a large amount of the attention in the uranium space in recent years as a seller of fuel to power plants, though they’ve used decommissioned weapons as a major source of raw materials, and by far the largest uranium pure play is Cameco (CCJ), which, along with Paladin Energy (PALAF), I wrote about as uranium picks from Elliott Gue last year. (Both are trading quite close to where they were at that time.)

If you’re looking to dig in to other uranium juniors of roughly comparable size, the one I hear touted most often is Strathmore Minerals, and I also see notes about Uranium One and First Uranium with some regularity. There are a bunch of others, as well, and I certainly am far from an expert on uranium miners — if you’ve a favorite, or if you like or dislike Uranerz, let us know with a comment below.

Didn’t get to Cooper’s other “special reports” yet today, but I can tell you that one of them was for an idea that his publisher has pushed before, a rare earth stock with properties in Greenland — I assume they’re still teasing that same Greenland miner as last time, Hudson Resources, though there are only really two active juniors there that I know of, you can see my comments about both those stocks in this article from November (both the stocks are up a bit from when I wrote about them, but well off the lofty highs they hit when they got the new attention). I’ll keep looking into the other ideas he touts, and will share if I find anything interesting.

Related Gumshoe Articles

“The Saudi Arabia of the Arctic” — Huge profits from Greenland’s Rare Earth Minerals?

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15 Comments on "“Hidden Assets in Natrona County” (Ian Cooper)"

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Guest
March 25, 2010 5:17 pm

Ian Cooper is the worst newsletter writer out there. Check out some of the reviews.

Mikey
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Mikey
March 25, 2010 12:33 pm

you do know that cooper is 50 for 52 right now?

JJ Chisolm
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JJ Chisolm
March 25, 2010 6:13 pm

i got no problems with cooper, i like to trade and not just sit on the sidelines. the guy recommends stocks when he thinks they are ready to hit and they usually do. all-time i'm up on his picks and i've been following him for years.

John
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John
March 25, 2010 6:29 pm

URZ deposits are similar in grade and size to Smith Ranch which is being mined ISR by Cameco, so this is not all wishful thinking – often the case with small miners. From Cameco's reports, expect 80-85% recovery. The question here is production costs. I'm guessing it's above $35-40 which is why these are not developed. And with new nuke agreement on horizon, U prices might stay depressed for a while.

Advantedges
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Advantedges
March 25, 2010 9:50 pm
New Nuke Developments? I just read a report that the Bill Gates sponsored Terra Power hopes to have a small scale reactor approved for construction by 2014, with it going online by 2020. Be careful in your projections of the utilization of uranium, especially in this Nuke-phobic country. Perhaps the best investments, (if you believe in the loan guarantees) is the construction industy. Recently, Jacob Engineering was upgraded because of their involvement. For the Faint of Heart, NLR is the ETF, and USU (mentioned in the article by Travis) is experiencing a short squeeze. Watch out!).
Jeff
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Jeff
March 25, 2010 6:15 pm

What does little lord Obama think about uranium? That’s really all that matters. If he’s for it, then he will make sure that it gets rammed down our throats — all the while telling us with a smile on his face that he feels our pain. If he’s against it, he will just have the media ignore it or bash it. Either way, he gets what he wants, while we get left holding a bag of coal.

pezgallo
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pezgallo
March 26, 2010 2:55 am

I don't know, call me yellow, but I'm still glowing from my meltdown with Unor (unoff) that Ian Whynot was all fired up about a couple years ago. Still holding because technically it's not a loser till I shell for a losh.

Don
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Don
March 26, 2010 5:32 am
Obama issued Executive order to shut down construction at Yucca Mountain after $38,000,000,000 has been spent and construction is nearing completion. This agrees with his campaign pledge that he does not like Nuclear. Without a place to store spent fuel, I don't think anyone will get a permit to build a new nuclear plant. Existing plants have temporary permission to store spent fuel on site with expectation that it would be moved to Yucca Mountain when complete. Now, no place to move it I don't think new permit will be issued without long term storage site. DH
Don
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Don
March 26, 2010 5:32 am
Obama issued Executive order to shut down construction at Yucca Mountain after $38,000,000,000 has been spent and construction is nearing completion. This agrees with his campaign pledge that he does not like Nuclear. Without a place to store spent fuel, I don't think anyone will get a permit to build a new nuclear plant. Existing plants have temporary permission to store spent fuel on site with expectation that it would be moved to Yucca Mountain when complete. Now, no place to move it I don't think new permit will be issued without long term storage site. DH
Don
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Don
March 26, 2010 3:39 pm

How come no mention of Thorium and Lightbridge Corp (LTBR) which is doing just fine. No bombs, little radioactivity with "waste", and much more availability than Uranium

Guy D.
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Guy D.
March 26, 2010 7:16 pm

Also no mention of CXX (Crosshair Exploration) which has a rich spot of uranium in Labrador with little environmental impact down the road. The company has recently done more in mining vanadium a more lucrative rare metal but the uranium grades are very attractive.

Rick
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Rick
March 27, 2010 6:37 am

Thorium should be really investigated. You cannot make a bomb from it, so we should push the Iranians to use that instead of uranium……any comments? Enter text right here!

Mikey
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Mikey
March 25, 2010 12:40 pm

LOL… Why the bad blood? I’ve profited from all his letters.

dlst
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dlst
March 26, 2010 5:41 am

LOL, I'm with you on Unor…and aren't the day-to-day 30-40% price fluctuations (that's ~$0.01 either way) a fun thing!

Mike
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Mike
March 26, 2010 6:09 pm

Don,

I just wanted to throw this small bit of information back at to you. The feds have not stopped funding nuclear energy and construction is well under way in GA. As of FEB 16, 2010 The Feds backed an 8.3 Billion dollar expansion to Vogtle Nuclear plant. With an expected cost of 14 Billion. I don’t see me jumping on any Uranium stocks but I thought I would throw this out there.

http://www.ajc.com/news/vogtle-nuclear-plant-near-308302.html

v/r,
Mike

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