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Market Outlook Journal
by James Finch - Please email your feedback to jfinch@stockinterview.com
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July 5, 2006
Al Gore’s Inconvenient Infomercial
 
A Movie Review

Al Gore
Gore's agenda unclear in new movie: Is he preaching or campaigning?
Who is the chubby, aging baby boomer waddling through airport after empty airport, wearily tugging along his 2-piece luggage roller? Hey, it’s not Michael Moore (again). Why, for heaven’s sake, it’s none other than a bored, disgruntled Al Gore, Jr. – the Man Who Personally Believes He Coulda/Woulda/Shoulda Been King! Well, at least Saturday Night Live believed him. Instead of ruling the Western World with a Green Fist, he’s starred in a new movie persuading us to stop using up so much energy. Meanwhile, Al Gore Jr. cruises about foreign capitals in one gas-guzzling, chauffeured Mercedes after another, pondering one very deep thought after another while solemnly tapping away on his Mac Powerbook. Earth to Al Gore: Actor Steven Seagal already nailed down the slick but glazed ‘poseur look’ about nine movies ago.

Is “An Inconvenient Truth” a documentary about Global Warming, or Al Gore’s microphone-grabbing, spotlight-snatching platform to whine about, and revisit, his presidential election loss, six years ago? Is former Veep Gore really hoping to educate film audiences about the very serious dangers of carbon dioxide emissions, greenhouse gases and abrupt climate change, or conniving to create a multi-media white paper for the Democratic Party’s energy agenda? We’re not sure, actually. Perhaps, it is because Al Gore, and the film’s executive producer Davis Guggenheim, were themselves confused as to the direction in which they were heading with this narcissistic political propaganda.

C’mon, a former high-profile Vice President of the United States shuffling through airport security like the rest of us hoi polloi? If so, then why didn’t the alarm bells go off? For those who missed it, in one scene Gore wore a belt buckle the size of a small dish, when passing through the airport’s metal detector. And it didn’t screech? Right! Or how about the scene where a pompous Al Gore (sans bodyguards) was hailing a cab in Manhattan, but no one recognized him? Well, perhaps that part was realistic. Who really cares about Al? Was the former #2 man doing a for-the-people inspirational routine, along the lines of “He Walks Among Us,” so that we’d buy his punch line about self-sacrifice at the end of the movie?

The man, who at one time claimed to have invented the Internet, more carefully documented his alleged 30-year personal campaign to help bring Global Warming to a screeching halt. Amazingly, he didn’t include footnotes with his film speech. We’re sure Gore was anticipating the “I invented the Internet” jokes and dutifully prepared his track record for audiences. He shamelessly dredged up memories of his old Harvard science professor, Roger Revelle, whom he once called into congressional hearings to have the scientist warn about CO2 emissions and rising water temperatures.

How seriously can we take ‘Scientist’ Al Gore? In a Washington Post article (March 19, 2000), Al’s grades and scores were questioned, during the presidential campaign, and the assistant headmaster at Gore’s private school, St. Albans, reportedly “chuckled at (Gore’s) science results.” He had scored so poorly.

Gore’s one constant, his glibness, manifests in this quasi-documentary. Mostly it’s a political infomercial, but for whatever reason Gore was so fervently pitching and hyping Al Gore was never made clear. He hasn’t quite grasped how serious the earth’s climactic changes could impact our civilization, other than flicking through multiple photos of receding glaciers and a few other tidbits. Gore mentions we might have 100 million refugees if sea levels rise, as if those many would actually survive. In contrast, Dr. Lovelock, author of “The Revenge of Gaia,” is forecasting the demise of billions of people under the same “earth is melting” scenario. Whom do we believe? We vote Lovelock, not Gore. After all, the politician admits, in a recent Rolling Stone magazine interview, Lovelock has forgotten more science than Gore has ever learned.

Whatever gravity the poseur portrayed during his supercilious narration, and in his deep-thinking (but awkward) poses, Gore nullified these moments with clumsy flashbacks to the 2000 presidential campaign. (Well, Gore reportedly did a lot of drugs in college, so we guess he's entitled to his flashbacks.) While he claimed in his movie to have moved on, the man still sounded downright bitter during this pre-campaigning film farce. His movie oozes contempt for the man who defeated him, and offers the same ill will toward anyone distantly related – family, business or otherwise – to the man who is now President of the United States. For those who helped keep him out of the White House or dissed him? He repays his enemies in a way only a screenwriter could: Gore adds his enemies to his movie.

Gore’s rapid-fire “subliminal images” are cleverly aimed at Florida and the 2000 presidential campaign. Take that Senator Katherine Harris! Guess which state gets submerged first when the polar ice caps melt? You got it, Florida. Of all the lakes in the world which are drying up, Gore selects Lake Chad. For those who have forgotten, it was the notorious “chads,” which cost Gore the presidency. Darn it Al, will you let it go? It’s been six years, you know. You LOST the election!

Film goers should wonder why an ex-tobacco farmer, and erstwhile U.S. presidential candidate (going 0 for 2 on presidential campaigns), has only NOW come out against fossil fuels because of Global Warming. What’s his agenda? To educate the public? If that is the case, then the filmmakers should have focused on the matter at hand – the earth is getting hotter, and we need a solution. Dr. James Lovelock’s mandate is simple: Nuclear energy is the single solution. Listen up, Hillary Clinton – you might have enjoyed Al’s ramblings, and said so in your pretentious New York Press Club speech last May, but where is Gore’s actual solution to the Global Warming crisis?

The self-righteous Al Jr. offers no solution in his movie. Even when asked by an audience in China for his solution, Gore spouts non-sequiturs – political rhetoric, but no word of a solution. The movie director deftly cuts away before Al can look even sillier, while we wonder why Al offered no solution.

The film shows images of a nuclear reactor, a wind farm and running water. Was the blustering Al or his bewildered movie director hoping the audience would choose a solution for them? At least Ross Perot, in his infomercials, had some solution for the ills then facing America. Al has none. Zippo. Nada. Just join Al’s crusade and start driving a hybrid car. Or did he mean a bicycle? After all, in one scene, Al boasts about the Chinese riding their bicycles and flashes a dated photo showing this. Wake up, Al, last we heard, the Chinese were driving Beemers and Benzs, not bicycles. Bikes are reserved for environmentalist weenies who can’t find a real job.

Al seems to be pro-nuclear, but claims there are problems with proliferation and waste disposal. In an interview with Australia’s The Age newspaper, published in November 2005, Gore told the reporter he was not “reflexively against” nuclear energy. Wearing his hat as a fund manager for the Generation Fund, he told the newspaper that investing in uranium mining comes down to sustainability. In another interview with “Grist Magazine’s” David Roberts, published in May of this year, Gore responded to questioning about the nuclear energy renaissance, saying, “ I doubt nuclear power will play a much larger role than it does now.” How’s that for naiveté in the context of dozens of countries having already announced their plans to advance their nuclear energy programs?

Perhaps, Gore will begin touting renewables, as Hillary Clinton has done on behalf of lapdog/energy guru Amory Lovins. We asked third-term Wyoming legislator, David R. Miller, who is also president of a U.S. uranium development company, Strathmore Minerals, about the madness over renewables becoming a serious factor for baseload electricity generation. Miller told us, “We were 100 percent renewable 300 years ago, 50 percent renewable 100 years ago and 30 percent renewable 50 years ago. Now, we are less than 10 percent renewable and shrinking fast.”

About nuclear energy, Miller added, “It nearly unlimited. We are learning to use better technology to make purer energy to do more for us.” Miller’s rebuttal on Al Gore’s message was emphatic, “Those that preach about saving the earth should practice what they speak, but the loudest voices are those that consume the most.” Miller pointed out, “Only the rich and idle have time to rail against too much consumption. But they want you to stop the consuming, not them.”

One could look deeper to better understand Al Gore’s ambiguity toward any solution. For example, is Al Gore’s family still a large shareholder of Occidental Petroleum? After all, his father took a consultancy with a subsidiary of the multi-national oil firm, upon leaving the U.S. Senate in 1970. Just in time to cash in on the oil embargo of 1973, Al Gore’s dad was paid $500,000 per year for his services. Al Gore Sr. also served as a company director. Why was Al Gore’s father on such great terms with Armand Hammer, the founder of Occidental Petroleum? Hammer was a good buddy of Josef Stalin and his Kremlin successors. Hammer’s dad introduced Little Armand to Stalin, who helped him build the Hammer Empire. All this in return for one small favor: Julius Hammer founded the U.S. Communist Party.

Have the sins of the father visited the son? For the past thirty or forty years, Al Gore has allegedly received a “mining royalty” check from Occidental Petroleum for zinc ore discovered on the Gore family property. Reportedly, Al has been paid about $20,000 annually for mining rights to the property. But, that’s just chump change. Long before the Buddhist Temple fund-raising fiasco in Los Angeles, Al Gore was involved in dubious political financings.

We didn’t look that much more deeply into Al Gore. Truthfully, why bother? Gore’s remorse appears rigged; his acting is pathetic. For example, his sister died of lung cancer, before the family stopped growing tobacco. He makes a really big deal about this in his movie (despite his own alleged chain-smoking habits as a college student). But he failed to mention he continued receiving royalties from his tobacco farm for years after his sister died.

Gore also forgot his vivid 1988 presidential election campaign speeches, defending tobacco farmers in the southern United States. Imagine Mr. Clean telling tobacco farmers about how he, himself, tilled the soil with his bare hands and picked dem dar tobacco leaves wit his own fingers! Our research shows Gore continued accepting campaign donations from tobacco companies until at least 1990. Instead of being truthful with his audience, Gore mentioned in passing that the reason he ran for President in 1988 was to give Global Warming some exposure. Hypocrisy or ambivalence? You decide.

In his film, Gore claimed to have changed the way he performed his congressional duties after his six-year old son was hit by a car and nearly died. Throughout his movie, Gore uses every personal tragedy to play upon the audience’s heart strings. What does that have to do with Global Warming? Nothing, but it aids and abets an otherwise insincere politician to better sell his purported sincerity concerning abrupt climate change. The message is good; the messenger needs to take up a new hobby. Like unsuccessfully running for president again so he can finally get his just deserves: “Strike Three, you’re outa here!”

Why pay good money to get bored out of your skull with this blasé movie? Save the $7 to $10 (or more) on “Al Gore’s Inconvenient Infomercial” by reading the same stuff for no charge whatsoever (and without the deep-thinking, brooding ex-politician who spends nearly all of his 100 minutes preaching in your face). Kevin Bambrough and Eric Sprott wrote a detailed report, covering a great deal, if not more than what the Gore movie attempted to discuss. And it’s free. Please read it: “Investment Implications of Abrupt Climate Change.”



July 3, 2006
Open Review Extended, Print Version Announcement
 
For about two weeks, we have been swamped with numerous emails offering feedback and advice on how to improve our soon-to-be-published “Investing in the Great Uranium Bull Market.” We want to thank each person who has emailed us your thoughts, your illustrations, your articles and all of your advices. They were and are greatly appreciated!

Many have asked for additional time in reviewing this book and sending their suggestions to be incorporated into this book. We are extending the Open Review through July 14th as the final date for your comments and suggestions. Please email us sooner rather than later to help us meet our printing deadlines. This past Friday, we were invited to submit a galley proof of the Uranium Guide to a special bookstore conference to help determine the size of the book orders to the big bookstore chains.

We have read every comment emailed to us. We have also begun using the suggestions in this book. For example, we are adding a Glossary to this book to help many new investors understand the specialized industry terminology. The front cover has been modified. More changes are underway. If you wish to add your comments, just visit our open review book page: http://www.stockinterview.com/investor_guides.html

We hope to have the print edition of this book available before Labor Day. Hopefully, the book will arrive in major bookstores by the end of the year. All current subscribers will be mailed the print version of this book at no charge during September.

This past week, StockInterview.com received its highest ranking in its history. During two of our peak traffic days, after the New Mexico Nuclear Renaissance series was posted, StockInterview.com was ranked at 81,348 by the Alexa ratings system. Then, the website rose to 77,171 the next day!

Through the entire month of June, we have enjoyed steady readership, as evidenced by Alexa’s graph of ‘reach per million.’ Our one-week average rose to 180,222. To put this into perspective, these were the one-week averages by some of your favorite websites:

UXC.com – 978,647 (UxC Consulting)
NEI.org – 558, 507 (Nuclear Energy Institute)
Cameco.com – 513,620
UIC.com.au – 390,095 (Uranium Information Centre)
NRC.gov – 251,295 (U.S. Nuclear Regulatory Commission)
Iaea.org – 126,985 (International Atomic Energy Agency)
DOE.gov – 12,203 (U.S. Department of Energy)

The lower the number, the higher a website is ranked by “number of visitors.” We hope to greatly improve upon our Alexa ratings over the course of the summer. Thank you for your support!



June 26, 2006
“Impingement Value” in a Company’s Story Required to Obtain Widespread Publicity
 
In two previous columns, we talked about how quality management attracts Publicity, or PR. Nearly every company is constantly trying to attract the attention of the media. What brings the media to a company’s door? That’s what every public relations man or woman would love to know. For this is what PR people get paid to obtain for their clients.

Quality management is certainly a key motivation in attracting a reporter’s attention. This helps persuade the reporter or a radio/TV producer that the proposed interview isn’t going to be with someone who has “nothing to say” or just rehashing a cliché or tired, old story. The higher the title and the better known a company, the greater the “impingement” a PR pitch (that’s what publicity people use to sell a reporter) impacts upon a member of the media. If someone from the publicity department at Microsoft calls Fortune magazine to ask about profiling Bill Gates, the pitch will have major impingement value. Few names have this kind of clout, either personally or corporately.

In any event, the senior editor of the major magazine will still inquire about the story angle. The editor will want to know, “What are we going to talk about?” Ultimately, it is the outstanding story that sells magazines or newspapers, not just the big name. Not all such stories involve a big name speaking or spouting his thoughts for the day. Often, better stories evolve when there is a strong newsworthy angle. Let’s look at two recent stories – one which involves a uranium company and another one about a coalbed methane (CBM) company, which we’ve covered in this column.

On Thursday, Pacific Asia China Energy (PACE) was featured in the Financing section of Canada’s Globe and Mail newspaper. Headlined “High-Energy Performer,” the opening sentences told us why the reporter was interested: “PACE holds contracts to help China explore for and develop its coalbed methane (CBM) resources – fuel China needs to help satisfy its energy demands.”

The big story, which drew the newspaper to Pacific Asia China Energy, was China. PACE piggybacked that story because the company may be helping to offer a legitimate solution to the country’s energy mix. Part of the big story is the possible size of the recoverable gas, estimated in a technical report by Sproule International to be as large as 11.2 trillion cubic feet of gas.

Those two items enhanced the reporter’s interest in PACE. China needs alternative energy sources, such as CBM, to improve their energy mix – from a near total dependence upon coal. And, PACE has a potentially huge resource, which could last a good number of years. Such a gas resource could be sufficiently large to make an impact on China. After all, China has proven reserves of a little more than 30 trillion cubic feet. Another 11 trillion cubic feet, should the potential be proven up, would represent a significant increase of available gas in a very large country. By itself, this could later develop into a major international energy story, reported upon by a great number of news media. Another impingement about the reporter is having the satisfaction of reporting upon a good story, well before others write the story.

Chatter in the newsroom:
“Did you hear about PACE’s gas discovery in China, Bob?”
Bob’s Reply: “Oh that one. Yeah, I wrote about it eight months ago!”

Therefore, there are multiple impingement points in this story. Each “draw,” or a reason to attract eyeballs to the story, is another point the story must score, for the reporter and his editor, to overcome the hurdles of being featured in a major publication. China is a draw. The size of the PACE coalbed methane gas resource is a draw. The potential impact upon China’s energy mix is a draw. Writing about it before the rest of the pack jumps on the bandwagon? That’s a draw, too. In this case, four draws sufficiently attracted media coverage for this small CBM development company.

Sometimes, the timing is just perfect, and the overpowering “big story” accidentally introduces a lucky guy onto the world’s stage. On the same Thursday, the PACE story was carried in the Globe and Mail, the Chief Executive of a tiny Canadian uranium company impinged on a Russian news service reporter in Hong Kong. Such was the good fortune for Craig Lindsay, a Certified Financial Analyst, who has spent more than 16 years in corporate finance, investment banking and business development, according to the website of Magnum Uranium (TSX: MM), for which he now serves as Chief Executive.

While Magnum has a market capitalization of about $15 million, and Lindsay is neither a geologist nor engineer, RIA Novosti news agency touted him as a “well-known energy expert.” Admittedly, Lindsay gave a great speech at the Hong Kong Club for foreign correspondents. Cleverly, he announced, “Uranium may be the next oil,” during his speech. As many other industry experts have predicted, Lindsay also forecast uranium “may hit $50/pound by the end of the year.” So many are now announcing this it is likely to become a self-fulfilling prophesy.

What elevated Lindsay’s publicity was not what he said in his speech. Most of his commentary has been already been reported in numerous publications, including in our columns. (What reporters really hate is rehashing old news to give someone publicity!) It was to whom Lindsay was speaking, and especially the “timing” as to when it was said. Here is how Craig Lindsay got his “15 minutes of fame.”

About six hours earlier, the very same Russian news agency reported that Russia and Kazakhstan had signed a uranium deal worth $1 billion. The photos of Russian President Vladimir Putin and Kazakh President Nursultan Nazarbayev appeared as the photo op which goes with such really big stories. This was a major event involving two very big names, and among the biggest names and countries in the uranium sector. This was also Russia’s first contract to import uranium; Kazakhstan is the world’s third largest uranium producer. All of this is “big news.”

The clever Russian freelance reporter, who attended the Lindsay speech in Hong Kong, probably text-messaged or emailed his editor by Blackberry, tried to piggyback the Russian-Kazak story with his own story. Yes, that is how timing works. As soon as a major event takes place, other journalists rush to piggyback the event with “their” story. The Russian reporter scored points with his editor and got his story filed (slang for published).

Two cunning gentlemen, the Russian stringer (slang for freelance reporter), and Craig Lindsay (whose name was spelled Kreig Lindsay in the article), both accomplished their purposes. Mr. Lindsay got his company into the world’s spotlight. The Russian stringer got a great story. The reporter threw up a softball question, for which Mr. Lindsay supplied the desired answer.

What was the question the reporter asked Lindsay? That’s pretty obvious from what the reporter published in his article. Here is a clip from the Moscow News article:


Foreign investors are ready to invest in Russia’s uranium industry, if Moscow wants this to happen and establishes a necessary legal base,” Lindsay said. “I believe that Russia is one of the most promising directions for this kind of investments, it is an undeveloped market, full of opportunities. My company will be the first to come to Russia, if the necessary conditions are created,” he added.

Nowhere in Lindsay’s speech did Magnum Uranium’s Chief Executive discuss investing in Russia. However, the reporter NEEDED a good quote. It had to tie-in with “investing in Russia for uranium development.” Lindsay accommodated. He didn’t commit to investing in Russia, but he kept the door open. Magnum Uranium recently announced the acquisition of a 1,080-acre land package in Converse County, Wyoming. The company is also exploring for uranium in both Wyoming and the Athabasca Basin. Its finances are probably already stretched from both exploration and acquisition activities. Magnum’s market capitalization would probably be insufficient to launch investments into Russia, at this time.

However, Lindsay did a great job getting his company this caliber of publicity. And he got the uranium sector excellent publicity. He capitalized upon an impinging story – a story that did show up on the world’s radar – by correctly supplying an answer the Russian journalist was trying to prod out of him.

This is the essence of how journalists and publicity-seekers work together. If the PR person gives the journalist the story angle he is looking for within the bigger story, chances are it will appear in print. Piggybacking a “main event” is the most common way to increase one’s impingement value to a reporter. And by being a cunning interviewee for his Russian reporter, Craig Lindsay just got Magnum Uranium into this column as well!



Websites of companies mentioned in this article:
Pacific Asia China Energy TSX: PCE http://www.pace-energy.com
Magnum Uranium TSX: MM http://www.magnumuranium.com




June 21, 2006
StockInterview.com Celebrates Highest-Ever Alexa Rating with Uranium Investors Guide Giveaway
 
StockInterview.com is sending 1,000 free hardcover copies of its soon-to-be published “Investing in the Great Uranium Bull Market” to all first-time visitors of our website. “The quality of the feedback from the public and peer review has been very encouraging,” said Julie Ickes, editor and publisher of StockInterview.com. “We’ve received responses from key industry professionals as well as from savvy investors. This feedback will help us shape the book into its final form, and it provides a unique opportunity for our website visitors to impact our publication.”

First-time visitors can view the electronic version of this 200+ page book at http://www.stockinterview.com and offer their commentary and feedback on the first eight chapters of the book. To be published later this summer, the book will retail for U.S. $24.95. “We encourage those of you who may not have had a chance yet to review the book, to do so,” Ms. Ickes recommended. “The first 1000 people to provide feedback will receive a free copy of ‘Investing in the Great Uranium Bull Market,’ upon its publication. We’ll even cover the shipping and handling costs. All existing StockInterview.com subscribers will also receive their free copy when it comes off the press.”


Jump in Alexa Rating


“Upon announcing the availability of the electronic version of this investor’s guide on Monday, there was a marked increase in the number of visitors to StockInterview.com,” said Ickes. On Tuesday, Alexa.com, which measures the popularity of websites, ranked StockInterview’s one-week average of visitors at 250,235, more than 95 percent higher than all websites on the Internet.



Tell Your Friends!


“The StockInterview team wishes to create a unique reference book about uranium mining and nuclear power, which we hope might be indispensable from the novice to the expert investor,” Ickes explained. “To broaden our scope and ensure we have not omitted any significant or pertinent data, we’ve presented our book online to website visitors, so we can draw from their expertise. In appreciation of those visiting our website and reviewing our book, we will thank them with a free copy of our book.” A form has been posted accompanying the book’s chapters for visitors to offer their commentary and suggest changes.




June 20, 2006
Cohen Research Report Bullish on Pacific Asia China Energy
 
A recent report published by the Cohen Independent Research Group, called Wall Street’s #1 Independent Research Firm, rated Pacific Asia China Energy (TSX: PCE: Other OTC: PCEEF) a Buy. The 68-page research report set three wide-ranging valuation levels as price targets for PCE shares for the company’s coalbed methane concessions in China. Considerations such as the wide range of the Guizhou’s abundant gas reserves, expected prices of natural gas during the research firm’s forecast period, and discounting factors, such as the stock price’s high volatility, were included in their price targets.

PCE shares, which closed at C$1.16/share on nearly 131,000 shares trading hands on June 19th, were given long-term fair market pricing of C$1.96/share by Cohen Research. This pricing was under the most pessimistic scenario. The low-case scenario included a natural gas price as low as $275 per 1000 cubic meters, and included a discount rate of 25 percent on the stock price. Cohen also reported, in the report, that at the current market price, PCE is “grossly undervalued.”

Cohen Research wrote, “As per our Base Case scenario estimates, the NAV of PACE’s resources falls in the range of C$5.31 – 7.83 per share (with a discounting factor of 20 percent).” Under the most optimistic pricing, assuming natural gas at $375 per 1000 cubic meters, Cohen targeted PCE shares at C$11.56/share. Cohen Research used the Net Asset Value (NAV) based method, which is one of the most accepted methods to value mining companies.

PACE, the acronym for Pacific Asia China Energy and not the stock’s ticker symbol (which is PCE, trading on the Toronto Venture Exchange, or TSX), is fortunate that one of its concessions is in the Guizhou province of China. Estimates describe this Chinese province as hosting more than 20 percent of China’s coalbed methane (CBM) reserves. The country’s total CBM reserves have been independently estimated to exceed 31 trillion cubic feet.

PACE was the first Canadian publicly traded company to participate in China’s granting of CBM concessions. PACE is participating in the Baotian-Qingshan CBM project through its wholly owned subsidiary Asia Canada Energy (ACE). China’s state-owned CBM company, China United Coalbed Methane (CUCBM), granted the 970-square kilometer CBM concession in September 2005 to ACE. The Baotian-Qingshan concession is located in the CBM-rich Guizhou province.

The Cohen Research NAV levels confirm what we anticipated. Earlier this year, we had reported on the assessment by Sproule International on the Baotian-Qingshan property. On March 1st, PACE had released three scenarios presented in the technical report filed by Sproule. The worst-case scenario on the property showed 504 billion cubic feet for three coal seams. The high case volume scenario for seven coal seams reached as high as 11.2 trillion cubic feet. Sproule’s assessment, called the “Most Likely Case volume” estimated 5.2 trillion cubic feet. Some analysts have valued each trillion cubic feet of gas at C$1 billion market capitalization.

This valuation does not include PACE’s other CBM concession in China, the Huangshi project, where the company began drilling test wells in mid May. Nor does this include the company’s joint venture partnership with Mitchell Drilling Services of Australia for the exclusive use of the drilling company’s Dymaxion® system in China. We interviewed Nathan Mitchell, president of the drilling company, who was both optimistic and excited about his company’s joint venture with PACE, and looked forward to expanding his drilling operations into China.

Mitchell told us, during that interview, his drilling company’s technology made it possible to extract gas for around US$1.25 per mcf. This would help make potentially “uneconomic” gas more economic under a very pessimistic scenario. Revenues from others using the Dymaxion system in China would flow into the coffers of both PACE and Mitchell. Obviously this joint venture is moving forward. On June 8th, PACE announced it had appointed a country manager for the joint venture, writing, “Mr. Pacey will oversee all aspects of the joint venture activities in China as the Joint Venture Company prepares to deploy Mitchell Drilling Contractors Pty Ltd's proprietary Dymaxion Surface to In-seam Drilling System later this year.”

Cohen Research did warn of negatives in making a hypothetical Bear Case for PACE’s projects. The research team wrote, “Commercial viability has not yet been proven.” The report also pointed out that technical studies were insufficient to “accurately assess the quality of CBM” to be extracted. Current drilling is underway on both CBM concessions. On June 12th, PACE reported, “Early stage desorption data from 12 samples show a range of gas contents between 105 and 407 scf/t (3.3 to 12.7 m3/t) after 4 to 19 days of testing. These values will be exceeded as desorption will not be completed for several weeks.”

The company appears on the right track and has been issuing regular progress reports, which are encouraging. As PACE progresses to its final drilling in Guizhou province, and as the price of natural gas recovers, we suspect Cohen Research will be pleased with their price targets, as might shareholders in Pacific Asia China Energy.



June 19, 2006
Public Review of Uranium Investor’s Guide
 
StockInterview.com is pleased to publish the electronic version of its latest publication, Investing in the Great Uranium Bull Market: A Practical Investor’s Guide to Uranium Stocks, on its website: http://www.stockinterview.com/investor_guides.html. This is an open review to both the public and the industry, as both a public and peer review of our research. The Public Review will continue through June 30th.

We aspire to provide investors with a technically accurate and complete overview of the uranium mining sector before going to press with the print version. Because this book will be distributed in bookstores and elsewhere across North America and Europe, we wish to present the finest work possible on this subject – one which will be used as a reference guide through the end of this decade.

This open review will provide you with an opportunity to comment upon our electronic version. We hope you will send us your feedback. We will read and review any suggested changes you believe should be in the book or any of its chapters. We welcome any and all remarks you may wish to make about this book. Each chapter was posted separately for easy viewing in PDF format.

Chapters One through Eight comprise the reference guide of this book. These chapters provide information about uranium, mining, the nuclear fuel cycle and important data an investor might wish to study for a quick and concise grasp of the industry.

A special form appears below the eight posted chapters for your commentary, suggestions, recommended changes and feedback. Chapter 9 has been withheld until the electronic version has been revised and in final form. Chapter 10 is a complete list of the directory of uranium companies. We decided at the last minute to not post this directory until we review each company on a case-by-case basis to determine if they are truly a uranium producer/developer/explorer, or a company only purporting to be one.

We hope to hear from you.



June 16, 2006
Inside A Company’s News Release
 
Most investors read a company’s news releases, but don’t read between the lines to understand in which direction the company is heading. Too often, a company tries to say everything in the headline and the first paragraph. Why? Because they know, as we do, that most investors scan the headline, a few sentences and perhaps look at some drill intercepts or key technical data (which few really understand). Then, the investor looks at how the share price reacts to the news, rejoicing or complaining on a stock chat board. Often, key phrases or sentences are buried inside the release, sometimes near the bottom. These may give you a clue as to what is really happening with the company.

We pulled up some recent news releases of several uranium companies we have been following to help investors read between the lines. Only a keen, ruthless appraisal of each news release, or a series of their news releases, could give you an accurate interpretation of how well the company is doing. Hopefully, the guidance which follows may help you better understand what is really going with a company’s plans.

Northwestern Mineral Ventures (TSX-V: NWT; OTCBB: NWTMF) announced on Thursday the completion of its airborne survey. It also announced multiple potential uranium targets in the country of Niger (Africa). Reading an earlier interview we conducted with Dr. John North, a director of this company, he told us, “There appear to be no scarcity of drill targets on the concessions.” So what was the big news? The CEO announced they had “identified several near-surface targets with significant uranium mineralization potential.” That wasn’t the news. Not even close. They already knew that!

The company covered 24,000 line kilometers, more than 14,000 miles. Their first pass-through was cherry picking. The real news was buried in the third paragraph, “…a second airborne survey to further delineate areas with strong uranium potential is expected to commence in the summer.” That should pick out the strongest targets for drilling at a later phase of the company’s exploration. That line also told us they had very encouraging news. If the second airborne confirms strong uranium potential, raising money to push the project through into drilling and advanced exploration will come more easily.

Forsys Metals Corp (TSX: FSY) announced on May 28th a new “detailed drilling” program on the company’s Valencia uranium deposit in Namibia (Africa). Closely spaced reverse circulation drilling will help add more “measured” resource to the company’s feasibility study. Increasing the measured resource will make it easier for the company to raise the money to develop a uranium mine or sell its deposit to a major company. Sounds good, but a news article Forsys Metals posted on its website was of greater interest to us.

A major hurdle in further developing the low grade uranium deposits in Namibia is water. These projects are in a desert. You need water, lots of it, to mine. On May 26th, The Namibian newspaper ran a very encouraging article – good news not only for the Rossing mine, but also for Forsys Metals and UraMin (which also hopes to start mining uranium in Namibia). What was the news? At a breakfast meeting on water conservation and management hosted by the Namibia Economic Society (NES) on Wednesday, NamWater CEO Vaino Shivute, announced, “The desalination plant is back on the table. We are looking into it again how to restart it, look at the problems of the past and learn from that.” With the water issue on its way to a possible resolution, we expect stronger interest in Namibia.

Energy Metals Corporation (TSX: EMC.TO) announced it would commence trading on the Toronto Stock Exchange on Thursday. EMC Chief Executive Paul Matysek’s quote spelled it out, that because of this it would be possible for “… the Company to reach a broader base of individual investors, mutual funds and institutional investors.” In other words, there would be less dependence upon the retail investor, and more reliance on the big funds to pile into EMC shares. Of course, the little guy will join the party as well.

UR-Energy Inc (TSX: URE.TO) issued a series of news releases between June 5th and Thursday, announcing a number of significant developments. First, they confirmed their uranium resources on their two primary properties, Lost Creek and Lost Soldier, in Wyoming, by filing National Instrument 43-101 documents. Both resources were higher than the historical resource estimates. Second, the company confirmed the leachability of uranium on its Lost Soldier property.

Why is that important? Without the ability to leach the uranium through an In Situ Recovery project, the company would have been forced to raise the money for a far more expensive open pit operation. In an earlier interview, Chief Executive Bill Boberg told us the permeability would be a “go, no-go” consideration on the project. It appears it is a go. Thursday’s news release confirmed that, but buried in the bottom of the news release was a more telling news item. The company is conducting environmental, hydrologic and engineering studies to “generate baseline data.”

During the course of our research in Wyoming, we discovered a company must provide at least one year of baseline data before it can submit its application for a permit to mine in that state. The other piece of data in the news release showed UR-Energy has been working on this and expected to submit its application by mid 2007. In other words, the company is quickly moving forward to establish its In Situ Recovery operation.

Uranerz Energy (OTC BB: URNZ) issued a few telling news releases, which may explain the direction in which they are heading. On June 5th, the company announced a new Chief Financial Officer. URNZ also announced it had closed a financing, bumping up their cash to just under $12 million. URNZ Chief Executive Glenn Catchpole told us he hoped to launch his first In Situ Recovery operation for about, or less than, $10 million. This is a good sign. But, it was the next day’s news release which confirmed the earlier news and reinforced where the company is going. The company announced the appointment of three independent directors to its Board. All three were appointed to the audit committee. Two are accountants with impressive track records; the third has an MBA from the University of Western Ontario, one of North America’s top MBA schools. How do we interpret this news release? URNZ probably plans to move from the lowly over the counter bulletin board to a more senior exchange: Amex or NASDAQ Small Cap would be our guess.

What do you do about a company that hasn’t been issuing a flurry of news releases? Take Strathmore Minerals (TSX: STM; Other OTC: STHJF) as an example. There are developments, but the news stream has been fairly quiet. Have they come to a standstill? No, quite the opposite is true.

We did what any investor should always do in the absence of major news. We picked up the phone and called their investor relations department. During a brief chat with Craig Christy, the company’s spokesman, we asked about the company’s cash situation. He responded, “We have about C$0.55/share in cash.” Based on Thursday’s closing price, that comes to more than 30 percent of what the market is valuing STM. That’s UP from C$0.37/share earlier this year. STM has plenty of cash and is in excellent financial shape.

We looked through our copy of the Hargreave Hale Report, entitled, “Too Hot to Handle or Just Warming up?” This is a leading British financial institution, based in London. They are a major shareholder in STM, and they have been recommending STM shares. On page 32 of their document, we reviewed a great financial analysis of 33 Canadian and Australian uranium producers and development companies. The bar chart depicted the Uranium Enterprise Value (UREV) per Risk Adjusted pound of U3O8 Reserves and Resources of those thirty-three companies. A horizontal line crossed the chart, showing “fair value” of about US$4 million for each company’s UREV per pound adjusted.

It was interesting to study how STM stacked up against many of the most popular uranium companies. Companies, such as Mega Uranium (TSX: MGA) rated at about US$28 million – about 700 percent ABOVE the Hargreave Hale “fair value” analysis. Crosshair Exploration and Mining traded about 500 percent of its fair value. UEX scored about twice above its fair value. Companies such as Uranium Resources, Western Prospector, Paladin Resources and UrAsia Energy scored at or very near their fair value. Strathmore Minerals had the lowest fair value rating – an absolute steal at about 30 percent of its fair value. About 16 companies traded above their fair value, some very much above the Hargreave Hale fair value analysis. It was enlightening to find Strathmore was in the company of producers such as ERA of Australia, IUC, Uranium One and Denison as an undervalued uranium company. In this case, it was the most undervalued of all 33 companies analyzed by the City of London financial institution.

We also found out that, a week ago, Strathmore Minerals president David Miller presented at the invitation-only Raymond James In-Situ Leach Uranium Mini-Conference in Toronto and Montreal on June 7th and 8th. You could visit the Raymond James website for the webcast of David Miller’s presentation, but it has restricted access. Others presenting were Uranium Resources and Energy Metals. We were fortunate to review David Miller’s PowerPoint presentation. One word describes Miller’s presentation: Wow! It really did pack a punch. We heard Raymond James may be releasing these presentations to the public in the near future.

Sometimes, when there is a lack of news, one can learn to dig around and find a company can be doing quite well. In other instances, one can study the news releases and try piecing together where the company is heading. We hope this guidance helps you become a more sophisticated investor. We neither recommend stocks nor give buying and selling advice. As always, speculating on natural resource companies can be very risky and suitable only for certain investors. One should always check with their registered financial advisor about what is suitable or not for one’s investment decisions.

The electronic version edition of StockInterview's Investing in the Great Uranium Bull Market: A Practical Investor's Guide to Uranium Stocks debuts on June 18th at 11:59pm eastern time. The electronic version of this book will be posted for open review through June 30th. This open review will provide you with an opportunity to comment upon our electronic version. We hope you will send us your feedback. We will read and review any suggested changes you believe should be in the book or any of its chapters. A special form will be posted on our website for your comments. Each chapter will be posted separately for easy loading and review.



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