Remember Uranium? There’s Still a Big Demand (OTC:LBSR)

After the disaster in Japan, uranium producers like Liberty Star Uranium & Metals Corp. (OTC:LBSR) suffered as prices dropped and France and other foreign governments said they were ‘re-considering’ their nuclear plant initiatives. 

A fear set in that uranium and nuclear power plants were doomed… but that hasn’t played out. Yes- controls and updates, and emergency plans have evolved, but as an industry; nuclear is as viable as it ever was and there’s one thing nuclear power is dependent on… uranium.

As an investor, a uranium play might be worth a re-consideration.   

Have a look at LBSR, which was trading in the $0.02 range on Jan 23 and is currently trading in the $0.03 range; a gain of 49% in less than two weeks.

What happened?

Two significant things actually happened… 

On Jan 11 U.S. Secretary of the Interior, Ken Salazar, confirmed that a moratorium on new uranium mining claims over approximately 1 million acres of federal land in northern Arizona will be instated for the next 20 years.

The moratorium, initially proposed in 2009, allows existing claims and mines to continue as before, including 431 standard Federal lode mining claims comprising Liberty Star's North Pipes Super Project.

The Company's claims are in numerous separate blocks covering breccia pipe targets located on the Colorado Plateau Province of northern Arizona known as the Arizona Strip.

While bad for most exploration, LBSR’s CEO pointed out: “While this decision denies everyone's ability to make new claims in the banned area, our current claims are secured under the terms of the moratorium. 

“Also, this edict cannot control negotiation for exploration and mining rights over privately held land in this breccia pipe rich area and region. Should the price of uranium rise and interest in the area reignite, Liberty Star is poised to continue exploration activity on its secured claims.”

And today, LBSR said it had signed agreements for a non-brokered equity line of up to $10 million with Fairhills Capital Offshore Ltd. The equity line allows but does not require the Company to issue and sell up to the number of Common Stock shares having an aggregate purchase price of $10 million to Fairhills Capital.

I haven’t, don’t, and do not intend on holding any of the companies mentioned in this article.