China's commitment to Uranium and Nuclear Power

ACB has taken some punishment on the share price and the last capital raising was abysmal IMO.  I've got to wonder why ACB couldn't sell the capital raising.  There is some very positive news about nuclear power and this is the first time since the Fukishima earth quake disaster that the potential for uranium price rises is real and it starts here.  In particular China is forging ahead as are some other countries.  Lets focus on China as I believe they are providing the future vision of and direction when it comes to nuclear, and this is the driving force for a realistic share price rise in the future.. IMO

The growth of the chinese nuclear industry is shown below... An excerpt from :-
http://www.world-nuclear.org/info/country-profiles/countries-a-f/china--nuclear-power/

• Mainland China has 26 nuclear power reactors in operation, 24 under construction, and more about to start construction.
• Additional reactors are planned, including some of the world's most advanced, to give more than a three-fold increase in nuclear capacity to at least 58 GWe by 2020-21, then some 150 GWe by 2030, and much more by 2050.

Even though some countries have invested significant resources in Solar and wind power like Germany but these are not the silver bullets for a lot of countries and neither is coal.  My own home has 3.9kW of solar panels on the roof.  I get about 20-24 kWh generation a day in summer and about 4-10 kWh generation a day in winter.  So that's a 60%-80% differential in generation.  China knows this and they know baseload generation is needed - especially when most of their country can't even see the sun.  Can't use coal, can't use solar, can't use wind, can't use tidal. Can use Hydro and can use nuclear.  Enter stage left...

Now look at the biggest single shareholder of ACB - its China Growth Minerals.  
I'm betting that not only does the uranium price rise significantly in 2-3 years, but ACB goes for a ride with it...
at $40 / lb, the project is marginal, but a $80/lb which is now very feasible considering china's nuclear growth and future demand for U3O8, the resource is worth between $12B and $24B in the ground at 100ppm cutoff.  If the uranium price goes higher, then this project is a no brainer...  Remember no investement in uranium mining has occurred in the last 5 years at all...

The ACAP Letlhakane uranium resource is approximated below : (copied off their website)

	Cut-off (U3O8 ppm)	Total Indicated	Total Inferred	Global Total
1	Mt[/B]	U3O8 (ppm)	Contained U3O8 (Mlbs)	Mt	U3O8 (ppm)	Contained U3O8 (Mlbs)	Mt	U3O8 (ppm)	Contained U3O8 (Mlbs)
2	100[/B]	131.9	198	57.5	530.5	215	250.9	662.4	211	308.1
3	200[/B]	49.4	269	29.4	198.6	319	139.7	248.1	309	168.9
4	250[/B]	23.4	322	16.6	114.9	390	98.7	138.3	378	115.2
5	300[/B]	11.3	376	9.4	72.4	458	73.2	83.7	447	82.5

Now ACB presently has a market cap about $13M.  My gut feel is that in 2-3 years, the market cap could be worth $150M to $300M+ IMO which represents 10 to 20 times the present share price or about 60c perhaps.  This seems feasible and likely now.

I've visited Botswana and loved the country - its safe for westerners and appears to have a relatively forward thinking government with regards to mining.  In terms of doing business, the excerpt below highlights how easy / difficult it is to do business in Botswana..

An excerpt from :-
http://www.kpmg.com/Global/en/Issue...lications/Documents/botswana-mining-guide.pdf
(Note Page 21 mentions ACAP resources as a big player in the uranium space having one of the worlds largest undeveloped uranium deposits.)

Botswana ranked 56th among the 189 countries covered under the World Bank Ease of Doing Business Index, 2014. It improved by nine ranking spots from its 2013 ranking, after last year’s rankings were adjusted by the World Bank to reflect data corrections.

Botswana’s change in rankings is in dealing with the construction permits category. By eliminating the requirement for an environmental impact assessment for low-risk projects, the country improved its ranking in the category by 95 spots to 69th of 189. The largest downward revision was in the getting electricity category, where Botswana lost 11 spots to 107th. This category is, however, expected to show improvement once the country brings its power plants online. Botswana continues to score relatively well in the resolving insolvency (34th), registering property (41th), and paying taxes (47th) categories. On the other hand, the country still scores relatively lower in the trading across borders (145th) category.

Parameter Rank Starting a business 96
Dealing with construction permits 59
Getting electricity 107 registering property 41
Getting credit 73 Protecting investors 52
Paying taxes 47
Trading across borders 145
Enforcing contracts 86
resolving insolvency 34

So I would suggest that Botswana represents a good place to do business in Africa IMO.

The last issue is the safety of nuclear power.  Now here is where I get rather annoyed.  The nuclear industry has had such bad press but if you think of all the other industries :-

COAL :- related deaths, mine collapses, explosions, the number is the 100,000's people who have died.  Let alone the cancers and lung problems from underground mining and issues with dust.  About 100 people die directly every year in the US alone from Coal related deaths .. and a further 10,000 to 30,000 people die from air polution related deaths... WTF.. if 1 person died from nuclear power it would be all over the world news!!!  The burning of fossil fuels is estimated to cause over 1.3M deaths per year.. That's an even bigger WTF...

OIL :- Sometimes I think the coal and oil industries are paying idiots to say how dangerous Nuclear is and the other idiots believe it so the rich elite in the US can make more money with O&G and coal.  How many oil tankers have run aground and destroyed reefs and how many rigs have blown up or Varanus Islands or Gulf of Mexico's or exxon valdez's do we have to have.  Its crazy - the number of significant environmental issues and the number of people who have died in O&G issues dwarfs nuclear.  I continue to be gobsmacked at how many people believe the bullsh1t...

NUCLEAR:
Regarding Fukishima -> There were no casualties officially reported to be caused by radiation exposure. However, Masao Yoshida, the former Fukushima supervisor of damage control who was among the Fukushima 50 (employees who remained on site for clean-up after others were evacuated) died of esophageal cancer in July 2013. There is some dispute as to whether this was due to his radiation exposure during the 2011 event.

Predicted future cancer deaths due to accumulated radiation exposures in the population living near Fukushima are predicted to be extremely low to none.  However workers involved in mitigating the effects of the accident do face minimally higher risks for some cancers.

The Fukishima nuclear disaster is all Media blitz and bullsh1t.  The only real disaster was chernobyl and that was just intentional stupidity - even so, the total number of fatalities and incidents due to nuclear power over the last 30 years is still several orders of magnitude lower than coal or O&G.  Its just laughable so yes - IMO Nuclear is several orders of magnitude safer than any other energy source, and also cleaner.  

Look at the Areva Animation how to generate nuclear power :-
http://www.areva.com/EN/operations-1572/assets-of-the-epr-nuclear-reactor.html

The big issue is IMO is that management couldn't sell this in the recent Capital raising ... and of course I didn't buy ... However at anything less than 3.5c, presents a pretty good option to buy more shares IMO

Now I've only talked about ACAP's Uranium... and although I'm not a fan of coal and believe it dangerous and unhealthy and risky, the company also has a billion or so tonnes of coal which at today's prices is upwards of $50B in the ground.  That's the topic of another post perhaps... but i'm bearish on coal and bullish on uranium.  The world needs CO2 free power and uranium is the only means of achieving base load generation with no CO2 at present.

GLTAH

Cheers and interested in what others think... but i'm thinking i'm going to load up on shares... nuclear for me is the way to go... And ACAP represents a very good opportunity at these prices.