Uranium: Energy Solution And Risk-On Opportunity

If a person consumed only nuclear-generated power, the amount of waste generated over his or her lifetime could be contained in a soda can. Compare this to the trainloads of coal delivered daily to coal-fired power plants and nuclear power seems like a no-brainer. Cecil Musgrave of InvestorsGuru.com sees nuclear power as a bridge to a renewable energy mix—but only if supply is reliable. In this interview with The Energy Report, Musgrave explains why supply shortages may create a price spike for the commodity and names some uranium juniors that are poised to deliver the goods.

The Energy Report: Let's talk about the state of the international market for uranium. Profit margins for producers are still slim. Do you see a possibility that prices will rise this year?

Cecil Musgrave: Uranium prices sold off sharply after the Fukushima Daiichi nuclear power plant accident in March 2011, and have steadily drifted lower since then, from around $70 per pound ($70/lb) to its current price of around $43/lb. My charts say that uranium may have put in its bottom last November before bouncing over 10% on the back of Japan's election in December.

Since Fukushima, market sentiment for anything nuclear power related, like uranium, has been risk-off. While time was needed to stress test nuclear plants worldwide, the market's main concern was how the media, the public and governments around the world would react. But the facts continue to be on the side of nuclear power as a practical solution for a growing world that requires abundant, low-cost and environmentally safe energy.

Despite uranium's long-term fundamentals, which have never looked better, markets hate short-term uncertainty. I see this as mainly a timing issue. The InvestorsGuru.com and the Small-Cap Stock Observer newsletter in 1995 as a new way for investors and companies to share ideas and news—before most financial or social sites existed. Musgrave was a retail and institutional advisor licensed in all securities including options and futures and is a Certified Investment Manager and Fellow of the Canadian Securities Institute. He holds a Bachelor's degree in computer science and has served as a public mining company director and has owned and operated a number of private businesses.

DISCLOSURE:
1) Peter Byrne of The Energy Report conducted this interview. He personally and/or his family own shares of the following companies mentioned in this interview: None.

2) The following companies mentioned in the interview are sponsors of The Energy Report: Fission Energy Corp., UR-Energy Inc. and Uranerz Energy Corp. Interviews are edited for clarity.

3) Cecil Musgrave: I personally and/or my family own shares of the following companies mentioned in this interview: Uranerz Energy Corp. I personally and/or my family am paid by the following companies mentioned in this interview: Uranerz Energy Corp. The company was not publicly traded at that time. I was not paid by Streetwise Reports for participating in this interview.

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Written By: The Energy Report