Thoughts
The past 2 days have been positive for the market and most stocks. However, there is a chance there is further downside because the market trend is still down. So until we cross 30 day M.A.'s be very careful.
This could be a sucker's rally or it could not be. I won't be making any more predictions for the market or various stocks. Instead I will try to read the trends and use a disciplined approach to entering and exiting stocks.
The other thing I want to mention is a company I have had on my watch list for a long time: International Uranium; IUC.TO.
VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - June 14, 2006) - International Uranium Corporation ("IUC" or the "Company") (TSX:IUC - News) is pleased to announce the re-opening of its U.S. uranium/vanadium mines. Mining activity will commence immediately and mined ore will be stockpiled at the Company's wholly-owned White Mesa uranium/vanadium mill in southeastern Utah. Initial production rates will be approximately 3.4 million pounds of uranium and 5.9 million pounds of vanadium. The Mill is currently completing an alternate feed contract which will net the Company in excess of 500,000 pounds uranium in 2006.
Ron Hochstein, President of International Uranium, commented, "IUC is happy to be back as a significant U.S. uranium producer - and at a time of record uranium prices. IUC last produced uranium from its mines in 1999 and its predecessor company, Energy Fuels Nuclear, Inc., was the U.S.'s largest uranium producer. Our mines and mill will provide us with many years of rapid growth to look forward to. We intend on utilizing our large capacity mill to its full advantage through toll milling contracts with other future miners in the area and our very successful alternate feed program. This year alone we will be producing over 500,000 pounds of U3O8 to IUC's credit through one alternate feed contract."
Mined ore will be stockpiled at the Company's wholly-owned White Mesa uranium/vanadium mill in southeastern Utah. The Mill is a highly strategic asset for the Company as it is one of only two operating uranium mills in the U.S. and there exists significant opportunity for third party toll milling and alternate feed processing in addition to processing its own mined ore. Based on current mine production schedules, processing of the ore would begin late fourth quarter 2007 or first quarter 2008, depending upon securing additional alternate feed material and third party ore. In the initial year, IUC anticipates producing approximately 3.4 million pounds of U3O8 and 5.9 million pounds of vanadium, thereafter, averaging between 1.5 and 2 million pounds per year of U3O8 and vanadium.
This is great news obviously and this year's gross cash flow could approach $200 million. I don't know what their profit margins are so I will have to make some phone calls soon to find out more info.
The management team is first class with the Lundin gang being heavily involved. They are very active in the mining sector right now and they have hit many jackpots in the past.
As you can see by the chart above, the price is above the 30 day M.A. intra-day so it will be interesting to see if the price holds. If it does and it continues to move higher, this will be a great company to hold (until the trend reverses of course!)