As we enter a new year, we marvel at the mass media for once again missing the boat when it comes to investment news stories for 2006.According to the mass media, the Dow breaking into a new high was the story or the year. The Dow was up 14.7% last year which was an excellent year for the index. But uranium was up almost 100% (97%) last year. We have had a number of readers ask us why we are not more heavily invested in the mainstream markets; our answer is that we prefer 100% gains to 14.7% gains.

Amazing at it may seem, the fact that uranium has jumped up over 600% in 3 years, you would think that the main stream investors and media would take notice. But to date, we have seen very little in the way of coverage of this amazing bull market. The fact that uranium has not had one pull back in this entire run, and there is virtually no media coverage tells us that we are still very early in this bull market.

One of the aspects that we are very excited about is that the stocks have not kept up with the metal price. We are expecting some phenomenal jumps in share prices, maybe very soon, in order for the stocks to catch up to the metal. We have seen some of these stocks move lately, but there is more to come.

Remember that the fundamentals for uranium are still very strong today.

• There currently 445 Nuclear plants operating in the world today. There are 178 more pants under construction, planned or proposed. If all come on line, this would be a 40% increase.

• Nuclear power plants must have uranium in order to operate. Without uranium it is lights out for these Nuclear Plants.

• The cost of uranium in the overall cost of running the nuclear facility, is minimal compared to other fuel sources. As the cost of uranium increases, the impact on the cost of the nuclear plant is minimal. This is not the case with other forms of energy.

• Uranium also has the advantage of being a highly concentrated source of energy which is easily and cheaply transportable. The quantities needed are very much less than for coal or oil. One kilogram of natural uranium will yield about 20,000 times as much energy as the same amount of coal. It is therefore intrinsically a very portable and tradable commodity.

• Morgan Stanley documented that "mining fails to keep pace with demand. Uranium mine production in 2003 satisfied only 53% of our estimated demand for uranium. The balance of demand was met from stock depletion and dilution of weapons grade highly enriched uranium." After the cigar lake flooding, there are no new large supplies of uranium scheduled to come into production until at least 2010.

One possible setback is the announcement that the Department of Energy planned to sell off some of its decommissioned nuclear weapons uranium. Although this suggests that prices could drop, when the announcement was made, the price of uranium went up, not down. Should we get a correction in the uranium prices, which we feel is unlikely, then this would be another excellent buying opportunity. We want to make it very clear to our subscribers, that we are still very bullish of uranium. Until we see the mass media and then the mass investors start to take notice, we will remain bullish. Uranium is still page 16 news, if it gets any at all. Until it works its way to page 1, we are riding this bull market out. Remember our keys to success are maximizing profits and minimizing losses.

For those who have not yet jumped on this band wagon we do not believe that it is too late to make good profits. The fundamentals are still very strong. And until we see this bull market start to get the coverage that it will get, it is still early in this bull market.

Although uranium is far from page 1 news, it is getting some coverage in the media. In a Bloomberg article we see that Merrill Lynch has raised its 2008 uranium price forecast by 78%, due to the Cigar Lake disaster and new demand coming form China and India. " In their December 8th report, they are now predicting the average price in 2007 to be $75 a pound and $80 in 2008. Merrill Lynch notes that this year uranium had averaged $46 a pound, so their new view is rather impressive for uranium stock holders. "We do not see a major trigger on the horizon that will force spot prices down" says the Merrill Lynch analyst. "

"The delay of Cigar Lake and the immanent arrival of India into the commercial fuel market have created a notable increase in demand." At the end of November, 28 plants were under construction with a further 62 ordered or planned. India, which runs 16 reactors, is building another 7. Merrill Lynch had expected 2008 prices to decline after averaging $53 in 2007."

In another article we see that Scotiabank Vice President, Industry and Commodity Market Research, Patricia Mohr has forecast uranium and zinc as her top picks for investors in 2007, with precious metals, particularly silver, expected to benefit from further weakness in the U.S. dollar. In her recently published analysis, Mohr said "uranium was the third-best performing commodity this year "and will likely be the top performer in 2007." She forecast that spot uranium prices are expected to average US$80 a pound in 2008, possibly ending 2007 close to $90.

"The current upswing in uranium prices represents a 'secular' transformational change in global energy markets related partly to a shift by utilities from high-priced fossil fuels-rather than a 'cyclical' upswing," Mohr asserted. "Nuclear energy is used for 'base load' electricity generation and will be little affected by an expected modest slowdown in global growth in 2007 (4.7% down from 5.2% in 2006), using 'purchasing power parity' estimates."

This uranium bull market will come to an end and the profits will be tougher to get, but for now we are still very bullish on this market. Things could start moving much quicker as we move forward so we are looking to a great year for uranium in 2007.

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