The Rude Awakening
Budapest, Hungary
Thursday, July 19, 2007 ------------------------- - Explosion rocks midtown Manhattan,
- A new uranium bull quickens pace in Canada,
- The empire's crumbling infrastructure and more…
------------------------- From the heat wave in central Europe, Joel Bowman reports… Yesterday Hungarians praised their capital city's infrastructure. Citizens of New York cursed theirs. On Margrit Island, here in Budapest, residents crowded around the park's fountains, cooling off under a geyser of refreshing mist. On Manhattan Island, residents crowded around the explosion caused by a burst steam pipe under 41st St., breathing in a not so refreshing (and possibly asbestos-laced) mist. This seemingly impromptu event in Mid-Town Manhattan certainly comes as a surprise to us…we're surprised it didn't happen sooner. The 24-inch steam pipe responsible for the blast has been underground, pumping the Island's steam, year in, year out, since 1924. In fact, it was on that pipe's eighty-second birthday that Chris Mayer decided it was high time to get into the infrastrucure business. Some readers will remember this chart from the July 31st issue of Rude, last year:
"America's infrastructure is crumbling," Chris observed a year ago this month. "The companies that will repair this infrastructure will make a lot of money over the next few years." They did…and so did faithful readers of Mayer's Special Situations. It seems, however, that the boom (pardon the pun) has only just begun. Explosions sometimes result in a call to arms. Other times they result in a call to brokers. We're thankful this appears to be a case of the latter. To find out more of what Chris is targeting for his Special Situations investment letter, read on here. Underground pipes are not the only subterranean commodities threatening imminent explosion, as Marin Katusa explained in yesterday's Rude Awakening. Marin has been digging around for the next wave of uranium mining companies set to hit the jackpot, spurred on by the massive surge in exploration in recent years. "A major discovery in uranium is now all but inevitable," observed the contributing editor of Casey Energy Speculator. "And when the long-awaited discovery does come, accompanied as it will be by stories of shareholders striking it rich overnight, it promises to kick start another bull run for the sector as a whole." Read on below as Marin digs a little deeper for opportunities in the new uranium era… --- Bulletin Board Elite --- The first time, I called it beginner's luck… When it happened again, I called it a coincidence… But after 9 stocks in a "secret" market one ace analyst was screening JUMPED to major exchanges - and major profits - in just a 12-month span, I knew he was hunting in the right place for huge gains. Read On Here For Details. ----------------------------- More than Moose Pasture
By Marin Katusa A favorite tactic of promoters in all resource bull markets, past and present, is to stake huge land positions and then proudly point investors to the map, saying, "We're the largest landholder in such and such area." Such land grabs are a dubious exploration strategy at best. And in the case of the Athabasca uranium-mining districts, they're downright ridiculous. Many of the basin's most significant deposits are just a few tens of meters wide and hundreds of meters long. Thus, such deposits can be entirely covered by a land parcel just a few hectares in area - a virtual postage stamp compared to many of the gargantuan claims that exist in the basin today. It's not having the most land that matters, it's having the right land. Pre-2004, there were only a few companies working in the Athabasca. These companies took advantage of the fact that uranium was out of favor to accumulate properties that, by virtue of the exploration work done in earlier uranium rushes, were known to be the better prospects. Post-2004 the staking rush began in earnest, although it was quickly apparent that much of the land picked up late in the day was likely little more than moose pasture. So the first question you need to ask about Athabasca-based uranium companies you own is exactly when they acquired their land. If it was at any point after 2004, then some (fairly high) level of skepticism is warranted. You can further narrow down the likely discoverer by looking at management and their experience with using modern technology to explore for uranium at depth. Advanced technologies like electromagnetic (EM) geophysics are tools the big players didn't have back in the days when they passed over "uneconomic" sections of the basin. EM geophysical methods were what originally identified graphite in the basement fault structure at McArthur River, helping guide a drill program that eventually located the main ore zone. Such high-tech prospecting in unclaimed areas toward the center of the basin could potentially unearth new discoveries. To come up with a find, would-be discoverers will need drilling - and lots of it. As we've noted above, the Athabasca Basin is not an easy place in which to zero in on uranium deposits. A quick example: Cogema's Midwest Lake uranium deposit in the northeastern Basin was discovered in the late 1970s only after nine years of field work at a cost of $4.35 million (roughly $13.4 million in 2007 dollars). Outside of the majors, very few companies are currently carrying out extensive drill programs in the Basin. The others may be loathe to drill because, so far, they've been able to promote themselves on land package size and potential resource - the key words here being "so far." The initial buzz and excitement is over and now it is time for real results. Drilling is how properties are put to the test, and only the true contenders, the ones who know they have a shot at finding something, are willing to pull drill core from the ground. A breakdown of 2007 drill programs in the Athabasca reveals who these contenders are. There are 59 junior uranium companies in the Athabasca Basin. The top 5 Casey Research uranium stocks are drilling 73,000 meters, the other 54 juniors are drilling a combined 64,645 meters. So, 8% of the junior uranium explorers working in the area will account for 53% of the drilling. It is these companies who are serious about making a discovery, not simply riding the uranium wave. While nothing is guaranteed, it's clear who has the best chance of claiming the Athabasca's next monster deposit. In 2006, the rising tide of interest in uranium lifted pretty much all junior uranium stocks, including those we follow in the Casey Energy Speculator. In 2007, our stocks have taken their lumps along with the rest of the sector, although some of our picks continue to charge forward (including one that is up 74% year-to-date, and over 350% since our original recommendation). We are not concerned, because we are invested in companies we are comfortable holding for their exploration - as opposed to promotional - promise. With many of the best uranium juniors selling at bargain prices, investors with strong contrarian instincts now have a brief window of opportunity to get in before the true frenzy begins - so long as they choose the right juniors in the right district. Choosing the right district is the easy half of the equation. For all the reasons outlined above, it's clearly the Athabasca Basin. As for cherry picking the right companies out of the dozens that now exist, based on our analysis, you only need to buy 5 of the 59 companies drilling in the Athabasca Basin this season to gain exposure to more than half of the entire drilling programs for the whole region. That reduces the task of building a portfolio of the right stocks to an easily manageable level. As more and more money is poured into the ground, the likelihood of a new mega-discovery grows daily. It's even possible that the 2007 drilling season will see more than one major discovery in the Athabasca, sending the companies responsible on a phenomenal rise, and in the process, lifting all those who happen to be exploring nearby to new highs. Joel's Note: Marin Katusa is the chief investment strategist, Energy Division, of Casey Research, publishers of the Casey Energy Speculator and Casey Energy Confidential Alert Service. Sharing the names of the five Athabasca Bain explorers identified in the Casey Energy Speculator would be unfair to current subscribers. However, if you subscribe today, you'll also receive our updated special report "The Top 5 Uranium Juniors in the Athabasca Basin." As new subscriptions come with a full six-month money-back guarantee, you have nothing to lose by giving it a try. Just click on the link below to learn more: Click here: Doug Casey's Energy Speculator - 6-Month Risk-Free Trial -------------------------------------- A final word here before we turn you over to the fellows in Baltimore H.Q. for today's 5-Minute Forecast. As you may already know, next week Vancouver will play host to Agora Finaicial's annual investment symposium. The theme for this year's event is investing in the new Asian era. Among the list of presenters offering their insights this year will be your senior editor, Eric Fry. If you are attending the conference (or even if you're not) please feel free to formulate a question or two that you'd like Mr. Fry to address. As I'm unable to attend, I've offered my services by promising to forward any questions you have on to Eric. Send your queries to aussiejoel@the-rude-awakening.com and, if possible, please mention if you will or will not be attending the conference. Cheers, Joel | 
