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April 18th, 2014

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editorials

 
Striking Gold in the Bakken
Bob Moriarty  Apr 13  

A Prelude to Another Energy Economics: My Bet is on Japan to Remain in the Winners' Club
Ferdinand E. Banks  Mar 22  

Still Another Know-It-All Handout on the Economics of Nuclear Energy
Ferdinand E. Banks  Mar 18  

Oil Triple Threat
Bob Moriarty  Mar 07  

Four Countries that Could Send Oil Prices Up
OilPrice  Feb 22  

»» more editorials in the archives

market data


Ux U3O8 Price (Uranium)April 14th, 2014
$33.00 -$0.75 www.uxc.com

»View Commitment of Traders.

expert analysis & newsletter briefs

Arianne Phosphate Inc.

"There's an advanced phosphate developer in Quebec that I like called Arianne Phosphate Inc. It currently has an NI 43-101 feasibility study completed. Arianne has a very high-grade phosphate deposit at Lac Paul in Quebec. The feasibility study shows a 25-year mine life with annual production of 3 million tonnes of phosphate concentrate with a grade of 38.6% P2O5. There are many zones still to explore that will expand the resource. The feasibility study shows that after beneficiation, the resource will provide among the highest P2O5 grades in the world. I think the company is an attractive takeover target given its location in Quebec, the vertical integration of the phosphate market and the very strong economics of the project.

[Permitting] should be a very important catalyst. The stock went up to CA$1.69, and it's backed off to CA$1.15. I think it's way too cheap right now. I think it's a stock that you want to own now. It's a big resource of 590 Mt of 7.13% Measured and Indicated ore. I don't think it will have any major problems on the permitting side. The one area it's going to have to deal with is the capitalization of the project. It may require a capex of $1.21 billion. On the other hand, it certainly has a really strong following, with a very low estimated production cost of $93.70 per tonne. The average selling price will likely be around $200 per tonne. This is a wonderful margin. Furthermore, it's a commodity that is relatively scarce in North America." (4/17/14) - The Energy Report Interview with Michael Berry

Fission Uranium Corp.

"We've had some wonderful discoveries in the Athabasca led by Fission Uranium Corp." (4/17/14) - The Energy Report Interview with Michael Berry

Uranerz Energy Corp.

"One company with the in situ leach advantage is Uranerz Energy Corp. It recently announced that the NRC has allowed Uranerz to commence production at Nichols Ranch in Wyoming. Production means cash flows and liquidity." (4/17/14) - The Energy Report Interview with Michael Berry

Manitok Energy Inc.

"Manitok Energy Inc. announced its year-end reserves, showing strong growth in proved developing producing reserves and oil weighting and 60% net asset value/share improvement, which we believe highlights the current discount valuation. . .we reiterate our Buy recommendation and $4 target." (4/16/14) - Chad Ellison, Dundee Capital Markets

Uranerz Energy Corp.

"With receipt of final clearance from the U.S. Nuclear Regulatory Commission, Uranerz Energy Corp. has commenced uranium production activities at its Nichols Ranch in situ recovery project in Wyoming, marking a major milestone for the company. . .Uranerz emerging from this process sheds significant regulatory risk and is unquestionably positive. . .we continue to expect first sales and revenues in mid-2014." (4/16/14) - Colin Healey, Haywood Securities


featured companies

Avanti Energy (TSX-V : AVN.V)
Enhancing Oil Production in Brazil and Colombia
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Marauder (TSXV:MES)
Shale Oil Play On East Coast of New Zealand
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Pan Orient Energy (TSX-V:CAN)
Canadian junior oil and natural gas company based in Calgary, Alberta.
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Quantum Energy (QEGY.PK:OTC)
Development stage publicly traded diversified holding company with an emphasis in oil field development trading
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Rift Basin Resources (TSX-V: RIF.H)
Mature Oil and Gas Field Revitalization in Southeast Asia
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Super Nova Minerals Corp. (SNP:CNSX, OTC:SNOVF)
Oil & gas exploration company focused on developing the Millford Bakken property
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The Energy Report ()
Investment ideas for saavy investors
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Torchlight Energy (NASDAQ: TRCH)
Oil Drilling and Working Interest in Oil Projects
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Umbral Energy Corp. (TSX-V: UMB)
Resource Plays and Conventional Oil Production Assets in Quebec and Alberta, Canada
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from the publisher
  Robert J. Moriarty

Welcome to 321energy.



Peak Copper

Roland Watson
December 16th, 2005

If oil is the most important commodity, then copper cannot be far behind. Being used extensively in electrical power cables, electrical equipment, automobile radiators, cooling/refrigeration tubing, heat exchangers, artillery shell casings, optical fibre, water pipes, drain pipes, plumbing and even jewellery, this reddish-brown metal is a commodity that the world can ill afford to be in short supply of.

But the fact of the matter is that copper is yet another metal that is in a mining deficit that was predicted to be 700,000 tons in 2004 by the USGS 2005 summary. That would be about 5% of the estimated 14.5 million tons produced worldwide. As a result, stockpiles have reduced and prices have increased to over the $2 a pound mark recently.

Against this backdrop, I was nevertheless surprised to read recent comments by Ross Beaty, the chairman of Pan American Silver and Lumina Copper, that global copper production was approaching its own version of "Peak Oil" or shall we say "Peak Copper"?

His remarks can be found in this article. But his main points centred on such facts as:

Only 56 new copper discoveries have been made in the last 30 years. He predicts Chilean copper output to peak about 2008 (Chile is the world's main producer). A lack of smelter and refinery supply is creating another bottleneck. 21 of the 28 largest copper mines in the world are not amenable to expansion. Many large copper mines will be exhausted between 2010 and 2015.

Does not all this sound familiar to the arguments of the Peak Oil debate?

New oil discoveries of the last 30 years are dwarfed by those of previous decades. Saudi Arabia, the world's main oil producer may peak soon. A lack of refining capacity is causing bottlenecks in gasoline, etc. Many of the super giant oil fields in the world cannot have their production expanded or even maintained. Supergiants such as Ghawar, Cantarell, Burgan and others will be well on the decline path by 2015.

When we look at the comparative reserve numbers for oil and copper we also get a sense of an impending dual peak scenario. Worldwide economic reserves of copper are stated to be 470 million tonnes by the USGS 2005 summary for copper. If the 2004 mine production figure of 14.5 million tonnes is held steady into the future, copper would be exhausted within 33 years.

If we also assume about 1 trillion barrels of oil remains to be economically recovered worldwide with a current annual production of 30 billion barrels then we come out with a similar reserve lifetime of 33 years. Coincidence? Not if we realise that increased energy consumption means increased metal consumption. The two go hand in hand.

When might this peak come around? That is probably a little easier to calculate than oil since secrecy about copper reserves is much less prevalent. But the shocking news that Chile, which produces one third of the world's copper, may begin to decline irreversibly in 2008 suggests that as Chile goes, so goes the world.

When Chile peaks, the world peaks.

Sounds a bit like the peak oil mantra "When Saudi Arabia peaks, the world peaks".

However, if you believe that reserves are purely a function of price, you may take comfort in the recent USGS suggestion that the total reserve base of copper (economic and uneconomic) is not the 940 million tonnes of its 2005 summary but a whopping 1.6 billion tonnes! Sadly, some reading between the lines of that statement reveals a more sobering truth that half of that estimated tonnage does not appear to have been discovered yet!

Perhaps the USGS is indulging in the same over-optimistic numbers that we have seen it display in its estimates for crude oil. We think so and will continue to work on that assumption.

In conclusion, what are the ramifications of copper supply diminishing in the face of potential increased demand? The answer is far higher prices to begin with. The second answer is substitution of applications using aluminium, titanium and plastics - depending of course on how strained their resource base is.

There is one hope for those consumers who yearn for lower copper prices. When Peak Oil finally arrives, we'll probably enter a severe economic crisis that will kill demand for copper. Then they'll have their lower prices and unlike gold and silver that will see fevered demand as safe haven investments, nobody is going to fly to copper as a store of value.

Roland Watson

email: newerainvestor@yahoo.co.uk

Roland Watson writes the investment newsletter The New Era Investor that can be purchased for an annual subscription of $99. To view a sample copy of the newsletter, please go to www.newerainvestor.com and click on the "View Sample Issue Here" link to the right.

He invites comments and questions at: newerainvestor@yahoo.co.uk.



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April 18th, 2014

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