Month: February 2014

By MoneyMorning.com.au

Yesterday, we told you about ‘the Day of the Last Warrior’, a time when military forces use robotics and AI makes the American warfighter obsolete.

Specifically, we covered iRobot and Google.

Today, we pick up where we left off…at the king of search…

Player No. 2: Google (NASDAQ:GOOG)

As you know, Google is powering future generations of robots. As we said yesterday, they’ve been on an acquisition binge.

Here’s what they acquired last year alone:

• Boston Dynamics has provided Google with fearsome-appearing robotic creations for contracts with the US Defense Department
• Bot & Dolly Have you seen the movie Gravity? If so, you’re familiar with this company’s work; they developed software and safety features for the robotic arms used
• Holomni sell themselves on their website as an expert in ‘high-tech wheels and omnidirectional motion,’ with applications for wheeled robots and driverless cars
• Meka Robotics, as anyone could guess, designs robots and the software they use to work in everyday environments
• Redwood Robotics PC Magazine says Redwood Robotics is pretty specialised and focuses on robotic arms for personal service robots
• Industrial Perception claims that it’s ‘providing robots with the skills they’ll need to succeed in the economy of tomorrow,’ manufacturing robots for consumer electronics, assembly or warehouse duties
• Schaft Inc. is a Japanese startup that spawned the 209-pound robot creation that won Google recognition at a DARPA disaster relief competition. The acquisition gave Google access their two-legged robots. Watch out, PackBot!

In 2014, they’ve acquired Nest Labs, a home automation success story (and maker of the popular Nest Learning Thermostat. Their team of talented engineers includes former Apple VP and iPod visionary Tony Fadell.

But the most recent, most secretive and perhaps most important acquisition took place last weekend…and it could justify buying Google’s expensive shares: a private company called DeepMind.

DeepMind specialises in something called ‘deep learning’. Shocker, I know.

The thing is…major tech companies are highly competitive for talent in this space.

‘IBM’s Watson supercomputer,’ according to TechCrunch ‘is now working on deep learning.’

Likewise, ‘Yahoo recently acquired photo analysis startup LookFlow to lead its new deep learning group.’

And recently, Facebook hired celebrity scientist Yann LeCun to lead its new AI lab. He’s the guy who invented the optical character recognition tech that banks used throughout the late 1990s and early 2000s that made a scan whenever you wrote a check. Soon enough, Facebook’s facial recognition tech may recognise people in not just photos but also the videos you post… Kind of scary, eh?

But Google outdid Facebook. According to what The Information reported back in December, Google and Facebook vied to purchase DeepMind. Last weekend, Google CEO Larry Page led the deal himself to acquire the three-year-old company for $400 million, considered by some to be ‘the last large independent company with a strong focus on artificial intelligence.’

Talk about competing for talent… DeepMind’s founder Demis Hassabis is a rare seed, indeed. As a child prodigy, chess master, shogi and poker player, he won the World Games Championships at the Mind Sports Olympiad a record five times. Now retired, the latter hailed him as ‘probably the best games player in history’.

Multiple sources said the company has been applying their tech to various potential products such as recommendation system for e-commerce. In light of the high-caliber acquisitions for robotics and AI, Google — despite its priciness — is a great stock.

Google and its subsidiaries are a force to be reckoned with and could be the biggest player bringing about ‘the Day of the Last Warrior,’ despite the fact that they started in search.

As promised, I have one final company to tell you about, a UAV specialist bringing about ‘the Day of the Last Warrior’ that you should know about…

Player No. 3: From Tuna Fishing to Terrorist Nabbing

Ever since the US Air Force armed spy drone, the MQ-1 Predator, was armed with guided missiles in the early ’00s, drones have been the source of a lot of fear — and rightly so.

The military space operates differently than the civilian, in that people are more willing to take an area where there’s already a problem — the cost of human life, whether it be from an exploding bomb or through computer code — and replace it with nonliving machinations.

If you’ve ever seen Captain Phillips with Tom Hanks, a movie based on a true story about the rescue of a hostage in an attack on a cargo ship by Somalian pirates, you might recognise this:

The drone is ScanEagle, made by Insitu Inc., a name inspired by the Latin term for ‘in position’ — readiness, in other words. Compared with its big brothers such as the Predator, ScanEagle is tiny.

Its wingspan is 10 feet, and it weighs less than 50 pounds, including payload. The Predator, on the other hand, has a wingspan of nearly 50 feet and weighs in at more than a ton fully loaded. So where Predator requires an airfield to operate, ScanEagle can be launched from a small towed trailer. In theory, a horse could pull this thing (useful in parts of Afghanistan to this day).

But Insitu didn’t start as a big, bad drone maker. In fact, it started pretty small. In 1994, it was a little startup in Washington state, composed of a group of engineers who enjoyed windsurfing together. They set out to improve offshore weather tracking and then got to work improving deep-sea tuna fishing. Yawn.

But when they turned their hot new tech toward the problems facing the troops in Iraq after 2003, they caught the attention of the big three-letter agencies (CIA, FBI, NSA…if you catch my drift). Soon, the old ‘tuna hunter’ was reincarnated as ScanEagle, and things really blew up. In fact, by 2010, revenues reached $400 million, and sales of the ScanEagle platform passed 1,000 orders.

The DoD’s acceptance of their signature drone put Insitu on the map. Now everything from police agencies to oil and gas corporations want a piece of the action.

There’s just one catch. Insitu never went public. In 2008, just five years after their drone tech made them a mil-tech darling, Insitu was bought out by Boeing (BA: NYSE).

But they got the ScanEagle program up and running in the first place through technology sharing and collaboration. Boeing’s bigger initiative to supply the needs of a burgeoning defence sector with mil-tech production lines going far beyond drones like ScanEagle.

‘If there’s only one thing you should remember about this bad boy,’ says our mil-tech guru Byron King, ‘it should be this: American Special Forces operators probably got their first up-close-and-personal look at Osama bin Laden’s secret compound in Abbottabad, Pakistan, using one of these.

‘Of course,’ he concedes, ‘I can’t prove that.’ Although he’s rubbed elbows with Donald Rumsfeld, ‘The only people that know for sure,’ he says, ‘have been sworn to secrecy, and rightly so. The details of Operation Neptune Spear are going to remain ‘need to know’ for a long time.’

Josh Grasmick,
Contributing Editor, Money Morning

Ed Note: The above is an edited version of an article originally published in Tomorrow in Review. For your chance to see Tomorrow in Review’s military technology guru Byron King in person and hear him speak about the future of technology and money at Port Phillip Publishing’s World War D conference, click here.

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By MoneyMorning.com.au

By Marin Katusa, Chief Energy Investment Strategist, Casey Research

With Valentine’s Day coming up fast and furious, I wanted to take a moment to give heartfelt thanks to one of my personal heroes this year—the man who single-handedly destroyed US national security and will give smart uranium investors a lot to be grateful for in the coming months. This letter is addressed to him.

Dear President Obama (may I call you Barry?),

I’m writing this letter to you in sincere appreciation and heartfelt gratitude for your achievements regarding national security and the uranium sector.

Perhaps you wonder what on earth national security could have to do with uranium (unless it is used in those pesky nuclear weapons that you keep taking away from the mullahs).

In fact, I bet you do wonder, because apparently it never occurred to you that one could depend on a ready supply of the other.

But let’s take this one step at a time.

I know you’re used to receiving information on the state of the union from your slew of sycophantic advisors in the form of tidbits and sound bites, so I’ll try not to overwhelm your fragile cerebrum.

Please take a look at the facts listed below, and maybe, just maybe, it’ll begin to dawn on you…

7 Facts You Should Know About Uranium in America

Amount of electricity in the United States generated by nuclear power: 20%.

Number of homes in President Obama’s America that are powered by the Russians: 1 in 10.

Number of homes in President Kennedy’s America that were powered by the Russians: 0.

Percentage of imported uranium in President Obama’s America: over 90%.

Percentage of imported uranium in President Kennedy’s America: 0%.

In 1962, the US was the largest producer of uranium in the world.

In 2013, the US ranked #8 in uranium production, right after China.

But let’s not stop there. To fully understand in what way national security and uranium might be linked (except that they both share some of the same vowels and consonants), I need to insert a brief…

History of the DOE

Believe it or not, but it was good old Albert Einstein who was the catalyst for the creation of what’s known as the US Department of Energy (DOE) today. In 1939, seeing that the Germans had an alarming head start in the nuclear race, Einstein wrote a letter to your predecessor Franklin D. Roosevelt, alerting him to that fact.

We know the rest from the textbooks: In 1939, Germany invaded Poland… in 1941, Japan bombed Pearl Harbor… and within two months, in 1942, Roosevelt instructed the Army Corps of Engineers to build a nuclear bomb—the start of the Manhattan Project. The US dropped two nuclear bombs on Japan, and in August of 1945, Japan surrendered.

The beginning of the Cold War led to the creation of the DOE.

In 1946, the US presented a plan for international control of nuclear research at the United Nations summit. The Soviet Union completely rejected the American proposal, launching the race for the nuclear bomb between the two superpowers.

After World War II, the Manhattan Project was turned over to the Atomic Energy Commission, which by the late 1940s had invested hundreds of billions of dollars into expanding the weapons complex.

By 1973, OPEC caused chaos at the pumps for Americans, and President Nixon announced an energy plan of independence for the US by 1980 (the first of many announced by subsequent presidents; I wonder why they never worked out).

Nixon created the Federal Energy Administration, and in 1974, his successor, Gerald Ford, signed the Federal Energy Reorganization Act. Like most political promises, the program failed to deliver, and by the late 1970s, Jimmy Carter was facing high oil prices and low approval ratings.

President Carter created the Department of Energy, and nine days before Elvis Presley died of a heart attack, James Schlesinger was sworn in as the first secretary of energy.

I know, Barry, you’ve been impatiently shifting around in your seat, waiting for the punchline. Okay, now this is where you come in…

President Obama Makes Changes to the DOE

Perhaps you know that since its inception, the Department of Energy has been the largest holder of uranium in the world. The DOE’s mandate for uranium was a strategic one, and the essential goal—as an issue of national security—was for the US and its citizens to never become dependent on another nation for uranium.

All the DOE had to do was follow two simple rules for sales to the US utilities that required uranium to power American households. Here they are:

1. Never sell more than 10% of domestic demand into the market per year.

2. Never sell uranium at such a low price that it would sabotage domestic uranium production.

Enter you, Mr. President, Barack Obama. You rode your campaign horse to victory on slogans like “Yes we can” and “It’s about time. It’s about change.”

Unfortunately, you forgot to mention that rather than change American politics, you were about to short-change the American people.

Why, oh why couldn’t you just leave well enough alone? Every US president before you had obeyed those two rules I mentioned above—Republican or Democrat, from Truman to Kennedy to even George W. Bush.

In mid-2013, you, Barry, apparently not understanding the importance of national energy security, changed the law and dropped the two rules. (We’ve been writing about this for a while now, so thanks for providing us with editorial material too.)

Since your advisors obviously did such a dismal job explaining it to you, maybe we can help.

How You Destroyed the US Uranium Sector—and US National Security

You see, the DOE built up its strategic stockpile of uranium from domestic production to make sure that the nuclear power generation that is so vital for the United States’ supply of electricity was never at risk. (The US is the world’s largest consumer of uranium and makes up about 25% of the global demand.)

All the presidents before you, Barry, followed the two sacred rules because the Russians, due to their Soviet legacy assets, can produce uranium at much lower prices than the Americans. Therefore, it is crucial to keep domestic production economic and competitive.

However, your recent job numbers didn’t look so good, did they—so you decided to milk the nuclear sector in order to create jobs and raise $250 million for the reclamation of old nuclear sites.

(You never openly stated this, but we found out anyway. It was easy, you see—to figure out your agenda, all we had to do was work backwards through the nuclear chain and look at the companies the DOE approved for the clean-up jobs, because these companies have announced their work programs for the next few years. Nice try there, Mr. President.)

So to get your $250 million—do we still count in millions, by the way? I thought everything under a billion was viewed as chump change these days—you made the DOE sell significantly more uranium into the market than ever before in the history of the United States.

And of course your timing couldn’t have been worse. Namely, you decided to do this right after the Japanese started selling record amounts of uranium after the Fukushima incident, and the wave of uranium hitting the market dropped the spot price from over US$72/lb to US$34/lb… a more than 50% drop within 24 months.

Well, you got what you wanted: with the spot price slashed in half, 95% of all US uranium production is now uneconomic. That means the miners are losing money and the higher-cost producers will soon go bankrupt.

Thanks to your tireless efforts, the former “Land of the Free” is now a junkie dependent on Russian uranium supplies for its next fix. And the nice Mr. Putin, whose country was America’s sworn enemy not too long ago (remember that?), now essentially controls 10% of the entire US electricity matrix.

Which proves again that with friends like you, Barry, one can make do quite easily without enemies.

So why exactly am I writing you a thank-you letter?

Well, as a community organizer, you wouldn’t know such things, but you see, the cure for low prices is low prices.

Less uranium production = less supply = higher price. So thanks to you, the shares of first-class uranium explorers and producers now really have nowhere to go but up. Well done!

You may have endangered the welfare of your entire nation for the foreseeable future, but from an investor’s viewpoint, you deserve a ton of chocolate truffles. Because you have single-handedly created—oh, just the…

Greatest Investment Opportunity in Uranium EVER

So, thank you, dear Mr. President, because your loss is my gain.

Oh, come on now, no need to hide your face in shame. After all, this is not the first time government stupidity has set up an incredible opportunity to make a fortune—you’re in very good company.

Thanks to your stunning incompetence, I wouldn’t be surprised if you handed me and my Casey Energy Report subscribers a double or triple on our investments.

So I close my letter with the warmest wishes for the rest of your presidency. May you never change.

Yours in deep gratitude,

Marin Katusa

Now to you, dear readers: If you want to find out the true extent of the windfall my dearest friend, Mr. Obama, has so kindly provided for us, you should give the Casey Energy Report a try today.

The current issue is all about the latest and greatest opportunities in uranium investing, and in our article “Making the Grade,” we’ll take you to the richest uranium deposit in the world and tell you all about the company that’s in the best position to be successful there.

There’s no risk in giving it a try: Test my newsletter for the next 3 months, and if you don’t like it or don’t make any money, just cancel within that time for a full refund, no questions asked. Click here to get started.

CRUDE OIL: With Crude Oil halting its two-day weakness and recovering higher on Tuesday, the risk is for a retake of the 98.58 level, its Jan 30 2014 high to occur. Further out, resistance comes in the 99.38 level, representing its Dec 31 2013 high. A turn above here will set the stage for more recovery towards the 100.00 level with a breach of there turning focus to the 100.74.00 level, its Dec 27 2013 high. On the downside, support comes in at the 96.26 level, its Feb 03 2014 low with a break targeting the 95.67 level. A cut through here will turn attention to the 95.00 level with a breach of here shifting focus to the 94.00 level, its psycho level. All in all, Crude Oil remains biased to the upside in the medium term.

Article by www.fxtechstrategy.com

Source: Peter Byrne of The Mining Report   (2/4/14)

http://www.theaureport.com/pub/na/joe-mazumdar-seven-gold-and-uranium-juniors-with-near-term-growth-you-cant-ignore

Many junior miners have an ace up the sleeve, and that is commodity price leverage. Joe Mazumdar, senior mining analyst with Canaccord Genuity, sat down with us to share what he looks for in junior companies with a lot of commodity price leverage. In this interview with The Mining Report, find out why bigger isn’t necessarily better when it comes to gold mining projects, and why the market is favoring uranium explorers over producers—for now. Mazumdar also shares names of gold companies with “bite-sized” capital needs from Burkina Faso to California, as well as the apples of his eye in the Athabasca Basin, where management teams with significant track records are heading up promising exploration programs.

The Mining Report: The Toronto Stock Exchange (TSX) global index dropped 50% during the past year. Where is the silver-gold lining in this cloud?

Joe Mazumdar: Financing risk for the junior mining sector was highly elevated, to say the least, in 2013 and remains a source of uncertainty in 2014. To reduce the risk of financing a project, we seek projects that generate double-digit returns in the current pricing environment. We also look for management teams with the technical capacity to not only build and operate a mining project, but also to successfully execute the business plan, which includes permitting the project and attracting good personnel. We want to mitigate the technical and execution risks inherent in a project by selecting these management teams. As senior management cannot mitigate all risks such as geopolitical and financing risk, we seek projects in manageable jurisdictions where the management has appreciable relevant experience. Another key is that the underlying asset requires a manageable or “bite-sized” upfront capital requirement.

To be clear, we tend not be overly attracted to projects with significant production profiles that move the needle for large producers. These projects tend to require significant upfront capital expenditures, which puts one at the extreme end for financing risk, and do not offer the returns that investors are currently seeking. We are interested in projects with smaller annual production profiles (100,000–150,000 ounces [100,000–150,000 oz]) that can interest an intermediate acquirer and provide a decent internal rate of return (IRR). At that level with a good IRR, an intermediate can show growth that would not move the needle for a major, as well as provide a return for its shareholders.

TMR: In terms of financing, exchange-traded funds (ETFs) have negatively affected the positions of shareholders in the mining spaces. Do you see any change in that phenomenon?

JM: Since inception, the ETFs have eroded the premiums of gold mining companies. But most of the erosion has happened among majors and intermediate producers, less so for junior developers and explorers, as they do not actually produce gold and do not attract the same investor base. In the last year, in our analysis of the sensitivities of gold equities to the gold prices, we have certainly seen that the junior sector is best for investors who want high beta to the gold price.

TMR: Let’s talk about mergers and acquisitions (M&A), which are always germane to junior mining companies. How are those getting funded in today’s financial environment?

JM: As producers have not seen share price depreciation to the extent that juniors have, suitors have tended to finance their M&A transactions predominantly through shares and less so with cash. Some deals include cash as an incentive to make the deal transactable—or to avoid having to go back to the shareholders for a vote to complete the transaction. We saw a cash component in the hostile bid byGoldcorp Inc. (G:TSX; GG:NYSE | Buy rated covered by Tony Lesiak) for Osisko Mining Corp. (OSK:TSX | Hold rated covered by Rahul Paul). That deal was positive for the gold sector because it provides confidence to shareholders that majors can be disciplined enough to make accretive transactions and not always make their acquisitions at the peak of the cycle.

The fall in the junior mining sector over the past few years and the “U-shaped” recovery make this a buyer’s market. In part due to the underlying financing risk, developers and explorers are trading at low historic multiples. The potential suitor, whether it be an intermediate or a major, can be very selective, as the ability to “transact” these acquisitions is high. Potential acquisitions will be suitor specific where the nature of the jurisdiction, as well as the suitor’s comfort level with developing and operating that asset, will come into play.

Suitors will acquire assets to diversify their asset base and/or add to their development pipeline with inexpensive options. While a few years ago a company would pay up to $70/oz for gold ounces in the Inferred category, currently it may be able to acquire for the same price or less ounces in the reserve category that may already be permitted for development.

TMR: Gold prices in India have dropped from a September high. What is your demand outlook for physical gold in India and China?

JM: Because India suffers from inflation and a weak currency, the local gold price has remained relatively high. India also has imposed duties and restrictions on the importation of gold. Nonetheless, gold still gets into the South Asian nation—albeit with less transparency than a few years ago. The bottom line is that India is buying physical gold because the underlying demand for it remains strong. In 2013, gold continued its flow from West to East with ETF outflows and growth in physical demand by China and India. China is the largest player in the gold market as it has replaced India as the biggest consumer of gold and is also the largest producer.

TMR: How do these trends affect the stock prices of junior gold companies?

JM: The gold price was down 15–30% in various currencies that we track in 2013, mostly due to investment underpinned by ETF outflows. That obviously had a negative impact on our sector. Now, the gold price has been flat to up, but because the betas are so high, the sector as a whole has moved up. Companies that were down over 60% came up almost that much in the month of January, and the gold price itself has not moved that much. We are seeing hypersensitive stocks with high betas to gold react to shifts in the gold price and the re-emergence of an underlying M&A bid for these stocks due in part to the current depressed valuations.

We are looking for companies that may be considered as M&A targets but with management teams that have the capacity to go it alone if the offers are less than attractive. Companies that lack these management teams will have no choice but to take the bid. I encourage investors to seek junior mining stocks where the underlying assets generate double-digit returns (>20%) under the current price environment. Note that companies seeking debt financing for projects are having their assets stress tested to gold prices of US$1,000 to US$1,100/oz.

TMR: Do you have any picks for us?

JM: One company that stands out is Orezone Gold Corporation (ORE:TSX | Spec Buy rated covered by Joe Mazumdar), which has rebranded itself from developing its Bomboré asset in Burkina Faso as a low-grade, open-pit milling operation on the oxide and sulphide ore that is marginal at current gold price levels to seeking to develop an open-pit, heap-leach scenario on the oxide portion of the resource. Orezone released a scoping study to provide the market a preliminary glance at the economics of the heap-leach scenario last week, which generates a >20% return applying our gold forward curve. The bite-sized capital requirement of US$200 million helps provide that level of IRR. The asset is located in a manageable geopolitical jurisdiction that has seen some M&A activity in the latter part of 2013.

Orezone is planning on delivering a feasibility study on the heap-leach scenario in the latter part of 2014. The management team has considerable experience in vending projects to majors in Burkina Faso. Not long ago, the CEO vended the Essakane gold project in the northern part of Burkina Faso to IAMGOLD Corp. (IMG:TSX; IAG: NYSE | Hold rated covered by Tony Lesiak).

TMR: What makes Burkina Faso attractive?

JM: Burkina Faso has 1) a significant geological endowment, 2) a streamlined permitting process, 3) other operating mines and pools of trained workers. The execution risk is not as high as in some West African nations. The combination has attracted some M&A activity in the area in the latter part of 2013. We saw B2Gold Corp. (BTG:NYSE; BTO:TSX; B2G:NSX | Buy rated covered by Rahul Paul) acquire Volta Resources Inc. (VTR:TSX). We saw Centamin Plc (CEE:TSX; CNT:ASX; CEY:LSE | Speculative Buy rated covered by Dmitry Kalachev), seeking diversification from Egypt, acquire Ampella Mining Ltd. (AMX:ASX). In our opinion, Burkina Faso and Ghana are two of the more stable countries in which to look for companies that can attract M&A bids.

TMR: What else is on your radar?

JM: We also favor Castle Mountain Mining Co. Ltd. (TSXV:CMM | Speculative Buy rated covered by Joe Mazumdar). This is an open-pit, heap-leach development play in California’s San Bernardino County. I know that some are wary of California, but this is a permitted project that was a producer in the 1990s (Viceroy). Castle Mountain Mining continues to derisk the potential restart and declared a resource with a significant amount of Indicated resource. We anticipate a scoping study out by February 2014. This is a micro-cap play that may represent an easy bolt-on for an intermediate. We find it quite attractive.

TMR: How has the market been treating Castle Mountain over the last period?

JM: We started covering it in October 2013 when it traded at $0.40/share. It has come up 50% since then after it released a resource update in the latter part of 2013. Our current target price of CA$1 is based on its M&A potential and the further derisking to come through the delivery of a scoping study and eventually a feasibility study. Remember the project already has a permit to develop the deposit as it was left on care and maintenance after the previous operation was reclaimed.

I also want to draw your readers’ attention to another open-pit, heap-leach project in California (Kern County): Golden Queen Mining Co. Ltd. (GQM:TSX | Speculative Buy rated covered by Joe Mazumdar). It is also a permitted open-pit, heap-leach development play but with 2P reserves known as Soledad Mountain. The company is currently breaking ground on the Soledad Mountain project. The project’s proximity to infrastructure such as rail, highway and power are advantages for controlling potential capital escalation.

TMR: Is that an old mine that was producing?

JM: Soledad Mountain was previously an underground mine. Golden Queen has been working to restart it as an open-pit, heap-leach project. It has taken a while to permit because the firm had to deal with changes in the reclamation laws in California, which involve certain levels of backfilling of waste and limits on the mining rate, among other requirements. Golden Queen Mining has joined Castle Mountain and Midway Gold Corp. (MDW:TSX.V; MDW:NYSE.MKT | Hold rated covered by Joe Mazumdar) that have permitted open-pit, heap-leach projects in the southwest U.S.

TMR: Is anything happening for you in the uranium space?

JM: Uranium prices, with spot prices hovering around US$35/pound (US$35/lb) U3O8, have hurt producers. However the deferral of capital projects and prospects for a growth in demand from Asia, specifically from China, are positives. Given the long lead times from exploration to production, we favor junior explorers in the sector within low geopolitical jurisdictions such as the Athabasca Basin of northern Saskatchewan.

We cover Fission Uranium Corp. (FCU:TSX.V | Speculative Buy rated covered by Joe Mazumdar), which we believe has an outstanding project along the southwest margin of the Athabasca Basin. Drilling over the past year or so has returned phenomenal results that indicate a shallow average depth of the U3O8 mineralization. We currently estimate a resource of 34–35 million pounds (34–35 Mlb) grading 3.6% U3O8. It may be fully valued at 34–35 Mlb U3O8, but the attainable goal is to declare a resource greater than 50 Mlb.

Fission just released its first round of preliminary results from its 30,000 meter 2014 drill program, which were excellent. The news flow will keep going until March or April 2014, when the winter program ends, but we should still be seeing assays for another two months following that. Some of Fission’s zones of U3O8 mineralization are technically amenable to open-pit mining at a pretty decent grade—well over 1%. Saskatchewan is a very good geopolitical jurisdiction. Fission will, in our opinion, require further derisking in the form of a maiden resource estimate leading to a scoping study to attract any significant M&A bids.

TMR: Are there any other promising uranium juniors operating in the Athabasca Basin?

JM: Our 2014 Junior Mining Sector Watch List is composed of some uranium exploration companies that have management teams with explorationists who have discovered or worked on well-established deposits in the Athabasca Basin. Two companies that we prefer are spinoffs from the merger of Fission Uranium and Alpha Minerals Inc. (delisted). Alpha Exploration Inc. (AEX:TSX.V) is one of them. It is run by the old Alpha Minerals team, who were also part of the old Hathor Exploration Ltd. team. So it has quite an excellent track record. The team recently accepted an award at the Vancouver Mineral Exploration Roundup just last week for discovering the deposit. The other spinoff is Fission 3.0 Corp. (FUU:TSX-V), which has the same management team as Fission Uranium, which, incidentally, won an award. [Editor’s note: Ross McElroy Fission Uranium CEO won the Prospectors and Developers Association of Canada2014 Bill Dennis Award for an important Canadian discovery and prospecting success.] Both of those companies have stellar management teams that have been there and done that in the basin.

And in terms of investing in people who are comfortable where they are working and who have a history of finding the U3O8 mineralization and converting it to resources, I like Forum Uranium Corp. (FDC:TSX.V). The company is run by a management team with a track record of discovering with major uranium players such as AREVA SA (AREVA:EPA).

TMR: I have noticed that there is a bit of a disparity in the stock performance of the uranium industry in the Athabasca.

JM: The disparity between the valuations of producers and explorers is in our opinion due in part to the fact that the Broker Average price is trading around the marginal cost of producing a pound of uranium for some producers. The low spot price, and the long-term price as well to some degree, is a function of a surplus in part resulting from the protracted reactivation of the Japanese nuclear industry. Depending on a company’s exposure to spot prices and the quality of the underlying asset, margin squeeze may be an issue.

Uranium explorers, however, are focused on the long term where one seeks the incentive price to bring a project forward. The thesis for the long term is that China is planning on expanding its nuclear capacity. There is a long lead time—10 years—to finding, developing, permitting and actually producing uranium. The time is ripe now for exploring, especially in low geopolitical jurisdictions that offer high-grade deposits such as the Athabasca Basin of northern Saskatchewan. That accounts for the dichotomy between an explorer that’s exposed to the long-term incentive price that people are modeling at over $65/lb and producers that are exposed to spot levels of $35–37/lb.

TMR: Why should our readers invest in uranium stocks over the Dow Jones’ best performers?

JM: Because if there is a potential shortfall in uranium going forward, investing in explorers is the way to go. The uranium explorers in Saskatchewan did quite well with respect to financing last year, whereas the producing companies suffered. In our opinion, in 2013, uranium was one of the few sectors in the junior mining sector that attracted investor interest.

TMR: Does that analysis apply to gold as well?

JM: In terms of the precious metals sector, we are witnessing a slow rebound from the June 2013 low on the TSX Venture. We urge your readers to follow well-run companies exploring for or developing assets that can generate decent returns in the current gold price environment. These are companies, we believe, that will attract financing. Junior companies with assets that represent out of the money options may continue to suffer if gold remains sideways to down.

TMR: Always a pleasure, Joe.

JM: Thanks for inviting me, Peter.

Joe Mazumdar joined Canaccord Genuity in December 2012 from Haywood Securities, where he also was a senior mining analyst focused on the junior gold market. The majority of his experience is with industry including corporate roles as director of strategic planning, corporate development at Newmont in Denver and senior market analyst/trader at Phelps Dodge in Phoenix. Mazumdar worked in technical roles for IAMGold in Ecuador, North Minerals in Argentina/Chile and Peru, RTZ Mining and Exploration in Argentina and MIM Exploration and Mining in Queensland, Australia, among others. Mazumdar has a Bachelor of Science in geology from the University of Alberta, a Master of Science in geology and mining from James Cook University and a Master of Science in mineral economics from the Colorado School of Mines.

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By CentralBankNews.info
    Uganda’s central bank held its Central Bank Rate (CBR) steady at 11.5 percent but softened its warning about inflation, saying it expects headline and core inflation to remain in the 5-6 percent range in the first half of this year and then rise only gradually above the bank’s target over the next 12 months as excess capacity is absorbed.
    In today’s policy statement, the Bank of Uganda (BOU) omitted last month’s stern warning that it would take “appropriate action” to ensure than core inflation remains around the bank’s 5.0 percent target.
    However, the central bank still noted there were several risks to inflation, including the dry spell in parts of the East African region that might affect food prices along with a reversal of the current exchange rate appreciation that could strengthen inflationary pressures.
    Uganda’s core inflation, which excludes food, energy and utilities, eased to 4.6 percent in January from 5.7 percent in December, with core prices virtually flat in the three months to January due to exchange rate appreciation of about 6.8 percent over the last 12 months.
    Headline inflation rose to 6.9 percent in January from 6.7 percent due to a rise in annual food crop inflation to 21.4 percent form 12.7 percent.

    The BOU last cut its CBR rate by 50 basis points in December after cutting the rate in June and then raising it again in September.
    The BOU reiterated its forecast for economic growth in the current 2013/14 financial year, which began on July 1, to range between 6.0 and 6.5 percent, as household demand is slowly gaining traction and expected to continue to rise with banks’ credit to households rising by 38 percent in December compared with a 13 percent contraction at the same time in 2012.
    The BOU expects this buoyant credit to support growth going forward, on top of fiscal stimulus and public infrastructure investment, but cautioned that the economy faces risks if the conflict in South Sudan is sustained.
    Uganda’s economy contracted by 0.6 percent in the third calendar quarter from the second quarter for annual growth of 2.2 percent, down from a rate of 5.8 percent in the second quarter.

    http://ift.tt/1iP0FNb

Guest Post By Dennis Miller – Pension Promises Go Unfulfilled

I don’t know which is worse: realizing you cannot keep a promise you made to someone important to you, or being the person who relied on the promise when you grasp that it is not going to be kept.

In 1973, I was 33 years old and just starting a public-speaking career. The National Speakers Association asked me to join, and I became a charter member. Our first president, the late Bill Gove, was a terrific speaker and also a great salesman—one of the top life insurance salesmen in the country for many years.

One of his favorite lines was quite telling. He would ask his prospect, “How much life insurance do you have?” The person would tell him. Bill would pause, get a funny look on his face, and deliver the punch line as a question: “You don’t plan on being dead very long?” Every time I saw him deliver that line, the audience would roar.

Were Bill alive today, he would probably be selling annuities to those same clients. I don’t understand why insurance companies don’t call annuities “enjoying-life insurance.” If they did, they would probably sell more. Somehow I can’t see Bill telling a story of asking a prospect about their retirement portfolio, and then delivering the punch line, “You don’t plan on being retired very long?” My guess is the audience would shift in their seats and perhaps chuckle uncomfortably. What’s the difference? An entire generation would know he is right; we are very worried that we won’t have enough money to enjoy retirement.

So what has changed since 1973? Most of us never thought too much about retirement when we were younger. In the 1970s, if you worked for the government, were a union member, or worked for a medium to large corporation, there was a good probability that you were guaranteed a pension, particularly if you worked there for any length of time. Couple that with Social Security and you could enjoy retirement. My dad had two pensions—one from the State of Illinois and another from the post office—and he did just that.

During my career, I trained salespeople and managers. I always warned salespeople not to exaggerate or overpromise to their clients. I told them: “Don’t let your hippopotamus mouth overload your hummingbird ass!” That line certainly got their attention. The consequences of not keeping a promise in the marketplace can be devastating. They can include the loss of a client, but also the loss of your reputation.

The corporate world, many unions, and federal, state, and local governments are all guilty of doing just that. They made pension promises to their employees that they just could not keep. I had a good friend who became a senior pilot at Delta Airlines and was quite proud the day he flew his last flight into Atlanta Hartsfield Airport. The customary fire hoses greeted his plane, and he had a big retirement party. Less than two years later, Delta filed for bankruptcy, the government took over its pension obligations, and his pension was drastically reduced. Sad to say, he passed away within five years.

The current Employee Benefit Research Institute Retirement Survey reports that only 3% of employees in the private sector have a pension plan. The rest have some sort of savings plan, like a 401(k). Corporate America has successfully unraveled from its pension promises in two ways: either companies bellied up and shifted the pension liability to the government; or they transferred the responsibility back to individual workers. It is now our job to worry about our own well-being. In effect, companies now just administrator voluntary savings plans for their employees.

While corporate America made promises it could not keep, at least most companies ‘fessed up to the economic reality, explained that making good on their promises would force them into bankruptcy, and got out from under those commitments.

Our government is doing the opposite of ‘fessing up. While corporate America is unraveling from economic promises it could not keep, governments big and small are doing the opposite. In addition to their generous pension plans, we all now have health care (even non-citizens), food stamps, longer-term unemployment benefits, etc. The list of promises goes on and on. The government has its hippopotamus mouth going full blast in every election cycle, making promises to win elections.

Those who speak up (see Ron Paul) and point out that those economic promises are going to bankrupt us all are criticized and ridiculed. Unfortunately, there is one major difference between corporate America making promises and the government doing the same: the government is making promises with our money! It is driving us into bankruptcy. When that happens, the value of a country’s currency will normally collapse, destroying the wealth of seniors and savers in the process.

While it may be bleak, it is not hopeless. I recently read John Stossel’s latest book, No, They Can’t: Why Government Fails—But Individuals Succeed. The book outlines our current predicament in very easy-to-understand terms. It also strengthened my personal resolve and gave me hope… a funny choice of words, as I think about it.

Every day, more people see these promises for what they really are: hollow and illusionary. There is no point in debating whether they were made in good faith or not. Who the hell cares? The real issue is: they are promises that are financially impossible to keep.

John’s book reinforced what I already knew: Americans are a hardy lot, and a lot of us succeed in spite of horrible obstacles placed in front of us. The first step is to pop the illusion bubble, accept the responsibility for our own retirements, and get on with the job.

Oh, and to address the question I asked in the first paragraph. Worrying about breaking a promise is only important to folks with a conscience—not the kind of people who will just tell others whatever they want to hear. Guess what? We are on to their game and their phony promises. Educated, take-charge retirees can thrive when they put their minds to it. The government may renege on their promises, but we will succeed in spite of that.

I was so impressed with Stossel’s book that I invited him to join us for an exclusive discussion on the challenges facing seniors. In addition, I’ve pulled together other experts including David Walker, former Comptroller General of the United States, and Jeff White, president of American Financial Group, to give you practical solutions to today’s financial challenges.

Our event, America’s Broken Promise: Strategies for a Retirement Worth Living is free, and is available on-demand. Act now to watch this special event and learn more about the challenges facing retirees and savers.

By CentralBankNews.info
    Romania’s central bank, which earlier today cut its policy rate for the sixth time in a row, said its inflation report will reiterate the outlook for a sharp, albeit temporary, drop in inflation in the first half of 2014 before returning to the bank’s target band and then remaining in the upper half of the band due to changes to administered prices and a gradual narrowing of the negative output gap as the economy improves.
    The National Bank of Romania (NBR), which cut its rate by 25 basis points to 3.50 percent, did not give any specific policy guidance in its statement, apart from saying it would closely monitor domestic and global economic developments and calibrate monetary policy to ensure price stability over the medium term.
    The quarterly inflation report, which will be released on Feb. 6, points to faster disinflation due to one-off factors, such as above average crops in 2013, a cut in VAT for bread, flour and some bakery products, the base effect of the weak 2012 harvest, higher electricity prices in December 2012, along with more persistent factors, such as the negative output gap and inflation expectations.
    Romania’s inflation rate fell to 1.6 percent in December from November’s 1.8 percent, with the average annual rate for 2013 down to 4.0 percent in December. The central bank targets inflation at a midpoint of 2.5 percent within a band of plus/minus one percentage point.
     In its November inflation report, the NBR forecast end-2013 inflation of 1.8 percent and 2014 inflation of 3.0 percent and forecast that inflation would fall below the lower bound of its target range, i.e. 1.5 percent, in the first half of this year and then gradually rise.
    “The significant improvement in the path of inflation and the related outlook has enabled the central bank to gradually adjust the monetary policy stance over the past few months, while effectively anchoring inflation expectations and closely monitoring domestic and external developments,” NBR said.
   Risks in the new forecasts related to volatile capital flows and the variability of investors’ risk appetite as far as their exposure to emerging economies. Domestic risks relate to the implementation of structural reforms amid the upcoming elections.  
    Romania’s economy has been improving in 2013 mainly due to higher exports – improving the current account – while consumption and investment are seen recovering more gradually. Lending to the private sector is negative, the NBR said, but rate cuts are feeding through to lending rates with a lag and the reduction in the minimum reserve requirements should provide further incentives for lending to the Romanian economy.
    The country’s Gross Domestic Product expanded by 1.6 percent in the third quarter from the second quarter for annual growth of 4.1 percent, up from 1.5 percent in the second quarter.

     www.CentralBankNews.info
   

By CentralBankNews.info

EURUSD: Vulnerable, Bear Threats Yet To Be Over

EURUSD: While recovery attempts may be seen, EUR remains weak and susceptible to the downside. This leaves the risk of a recapture of the 1.3476 level on the cards. Further down, a break will aim at the 1.3400 level, its psycho level followed by the 1.3350 level and subsequently the 1.3300 level. On the other hand, resistance resides at the 1.3602 level, its Jan 29’2014 low with a cut through here turning attention to the 1.3650 level and then the 1.3700 level. Further out, resistance is seen at the 1.3739 level, its Jan 24 high and then the 1.3818 level, its Dec 30 2013 high. All in all, EUR remains biased to the downside short term.

Article by www.fxtechstrategy.com

As expected, the EURUSD has turned down from above 1.3700 area where we labeled end of an expanded flat formation that now shows signs of completion after sharp fall trough 1.3500. A decline is showing signs of an impulsive price action so we suspect that EURUSD is heading much lower. Trend is down as long as 1.3683 remains in place, while any rallies should find resistance in 1.3540/1.3600 zone.

EURUSD 4h Elliott Wave Analysis

EURUSD 1h

EURUSD on the other hand, did not move much in the last few sessions which was expected as we were looking for a wave iv) pullback up to 1.3530/60. If we take a look closely at the substructure from the latest low we can see an overlapping price action, which is personality of a corrective rally so we think that pair will turn back to the lows in sessions ahead. Resistance or swing region for wave iv) remains at 1.3530-1.3570.

EURUSD 1h Elliott Wave Analysis

Written by www.ew-forecast.com

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