But the funniest part about uranium is what it’s doing to the blood pressure of speculators on the stock market who are bidding uranium shares into the stratosphere – and the way in which uranium is generating a sort of reverse dot.com boom.
First things first. In keeping with the theme of EnergyReview.net, The Slug hereby deems uranium a fuel – and fair game for his casual observations.
Secondly, he urges all readers to immediately read the statement issued last week by a stock exchange tiddler called Fast Scout (ASX code: FSL) in which it announces the purchase of a 75% stake in a “suite of uranium exploration tenements” in the Northern Territory.
When he first saw it, The Slug thought he had entered a time machine where everything happens in reverse.
Was it really just a few years ago that small mining (and even some oil) companies were swapping exploration assets for a 15 minutes of dot.com fame (but no fortune)?
And could it really be now that a dot.com specialist like Fast Scout, with its virtual web and data-base offerings, is ‘morphing’ into an energy stock with a pile of uranium exploration assets?
Yes folks. It really is happening. A dot.commer has become a uranium explorer in a switch that rivals the conversion of St Paul on the road to Damascus.
The ‘why’ to all this is the four-fold increase in the price of uranium over the past few years, and the fact that even some of the darkest of dark green environmentalists are now saying that uranium is actually not all that bad.
All that’s missing in the conversion of the dark-greens is an apology for 30 years of telling porkie pies about the nuclear fuel cycle. But the Slug digresses…
Back in the surreal world of the stock market things are happening that are even weirder than dot.com companies discovering the delights of uranium in the outback.
We see stocks such as Paladin Resources soaring through the $1 billion market capitalisation barrier, and a flood of new floats pouring out of mining companies seeking to cash-in on a boom that has all the hallmarks of every previous boom. And we all know how booms inevitably end – in a painful bust.
The awful truth about what’s happening on the market today is that reality has given way to propaganda.
There is a belief that the world is desperately short of uranium, and that a crisis is developing.
Rubbish!
All that is happening is that the supply of uranium, of which there is no shortage, is undergoing a change. Cheap, reprocessed material from Russian and US missile warheads, is running down and a switch is being made to generating supplies from mines.
If there is a looming shortage, even the International Atomic Energy Agency reckons it will not become a problem until 2020.
The nuclear fuel cycle is not like a gas turbine. It is not switched on and off like a light bulb. Building a new nuclear reactor takes decades, and that’s just to get through the planning approvals process.
But if we all know that, and we know that Australia’s states are yet to lift their bans on new uranium mines, and the federal government is only talking about doing something, what’s the game on the stock market?
The answer, dear reader, is that we have a classic speculative bubble happening before our very eyes, and nothing provides greater proof than the conversion of Fast Scout.
Does this mean everyone should sell their uranium shares now?
No, is the quick answer. Enjoy the ride and make a fortune. But don’t be the last man left holding a parcel of unloved uranium exploration share certificates when that all-too familiar popping sound is heard from the uranium balloon.
