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Posted by Daniel Workman May 7, 2007 |
Our article America Drives Free Trade reveals how foreign companies have privileges that allow them to buy Canadian resources, thus threatening Canada's economic sovereignty.
We then wrote about how the top uranium producing countries and companies are benefiting from spiking uranium prices. The fact that Canada is the world's leading producer of uranium makes us think that more foreign takeovers of the Canadian mining companies are imminent.
Propelled by blossoming demand for nuclear power from China and India, the current shortfall between global supply and demand for uranium (yellow cake) is expected to rise. China alone is building 30 of the 100 uranium-fuelled reactors being planned or built worldwide.
Yuriy Humber of Bloomberg News notes that recent disruptions in uranium supplies will push prices even higher. Cameco (CCO on TSX), the world’s largest uranium miner, reported that a flood at its Cigar Lake uranium project in Saskatchewan, Canada will delay production until 2010. Energy Resources of Australia cautioned that its Ranger mine may produce 35% less uranium in 2008 due to heavy rainfall.
Our research shows that there may well be international trade opportunities midst the emotional distress caused by the foreign capital takeover of Canada (or as John Turner calls it - the hollowing out of Canada).
Laramide Resources (LAM on TSX) owns the Westmoreland Project, a large open pit uranium mine in Australia. For more details on that Westmoreland's prospects, please read our article World's Top Uranium Project.
Since November of last year, Laramide’s stock price has increased 75% from $8 (Canadian) to around $14 as of late. Given the potential of its Westmoreland property in Queensland, Laramide would appear to have upside possibilities. However, the ride will be both risky and volatile as the stock recently traded in a weekly range from $12.21 to $15.40, a gap of more than 20%.