Uranium mining stocks made a fortune for the famous newsletter writer Jim Dines, and his loyal subscribers. As fast as they rocketed higher though, uranium mining stocks and many mining stocks in general also crashed back down to earth. The reason uranium mining stocks saw such a meteoric rise was because the value of uranium had a meteoric rise.
Uranium Demand Insatiable
Uranium the metal has been a key demand item across the world because it powers nuclear power plants. Nuclear power plants are becoming a great source of power for countries that have adopted the questionable standard for reducing carbon emissions. All debates aside about carbon emissions, there is no question that nuclear power plants are incredibly efficient. France has been one of the leaders in nuclear power plants and has among the lowest cost for power production of any developed nation. Because of the advantage of nuclear power plants, uranium has become an attractive commodity.
Uranium is not traded on any commodity exchange, rather it is a regulated substance that has been primarily hoarded among governmental bodies and military forces. For this reason, uranium mining stocks have been a key source for finding new uranium for the new power plants coming into production within the next decade. Now that Russia is no longer actively selling their uranium into the market, mined supply must begin to make up the difference.
Uranium Mining Companies Hard to Start-Up
One of the major challenges with uranium mining stocks is that uranium mining stocks require a significant level of environmental regulation to cross over before they can start production. James Dines has pointed out that it can take as much as 10 years before a new mine is permitted once a resource of uranium is established. Uranium mining stocks can be extremely profitable because developing new uranium mines is a very challenging proposition. Some of the most famous uranium mining stocks include:
- Cameco
- Mega Uranium
- Strathmore minerals
While there are literally thousands of mining stocks, there are only a few producing mining stocks, especially in the uranium mining stocks sector, that are verified as far as for their resource and have near-term potential for starting or increasing production. Investing in near-term production uranium mining stocks can be enormously profitable.
For example, Pinetree Capital rocketed from under $1 to over $14 per share in about 18 months' time. If an investor had understood the dynamics of the uranium market they could have made a phenomenal profit over a very short period of time. Uranium mining stocks and mining stocks in general, especially junior mining stocks, can offer this kind of profit potential. Telling the full story of Pinetree Capital, one sees how the price sharply dropped from $14 down to approximate two dollars. Nonetheless, the potential for a 1000%+ profit was there to be enjoyed.
Uranium mining stocks and mining stocks in general can offer an investor significantly high returns as long as they understand the fundamentals of the market that they are investing in and get out when the stocks rise parabolically. Parabolic rises in mining stocks, especially uranium mining stocks, almost always signify that the market or stock is about to sustain a significant crash. Avoiding these crashes is the key to successfully investing in uranium mining stocks.
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