Can BLR be in the top 10% juniors as mentioned below , out of...

Can BLR be in the top 10% juniors as mentioned below , out of the 2500 juniors ?

i can sense the tension and uneasiness among BLR investors and those waiting on the sidelines for the confirmation and success of ablation 5tph unit. when is it going to explode upwards. is it just hot air? or an explosive diarrhea. hahahha. Tune in over the next few weeks folks! and the next few weeks and the many weeks to come!

If you wont bet your farm on it, will you bet your life on it!?

All the best! It been a long ride for everyone except a few ;)

http://resourceworld.com/index.php/rick-rule-on-uranium/

RICK RULE ON URANIUM
Published by Resource World on September 6, 2013

Rick Rule, Chairman/Founder of Sprott Global Resource Investments Ltd., is a sought after speaker at resource investment conferences throughout North America; he usually draws a standing room only audience. Although based in California, where he is originally from, Rule is a graduate of the University of British Columbia and has successfully invested and financed dozens of Canadian resource companies.
Rick Rule, Chairman/Founder of Sprott Global Resource Investments Ltd.

Rick Rule, Chairman/Founder of Sprott Global Resource Investments Ltd.

Recently he has been examining and investing in the uranium sector, a sector that has been beaten down since the Fukushima disaster in Japan. However, the tide is slowly turning and the price of uranium is poised for a rebound for several reasons and, along with it, the share prices of uranium producers. In addition, a few select junior explorers are also worthy of consideration. In an interview with Resource World, Rule answered a few questions for us about the uranium sector.

Why do you think the price of uranium will increase? “The uranium industry, as a whole, has stated that in order to earn their cost of capital they need long-term prices of US $75-80 per pound,” said Rule. “In fact, the uranium price was happily at US $80 per pound until the Fukushima disaster. When that took place, two things happened: it took a substantial part of world uranium demand out of the market overnight and, at the same time, increased the supply of uranium on a temporary basis because the Japanese reactor industry sold their in-place inventories as they weren’t going to use them and they needed to generate cash.”

“So you had a decrease in demand and an increase in supply,” Rule explained. “Now it looks like the restart of the Japanese nuclear industry will take place over the next 18 months. Both of the situations that led to the decline of the price of uranium from US $80 to $40 are being reversed. In other words, demand is coming into the market. In the near term, the Japanese need to re-stock the same uranium that they de-stocked after the Fukushima event. So I basically see an unwinding of the circumstances that caused a 50% decline in the uranium price.”

Rule says he doesn’t think the ending of the Megatons to Megawatts program will have a significant effect on uranium prices as it doesn’t change the supply scenario very much. The program, which ends this year, converts high-enriched uranium taken from dismantled Russian nuclear weapons into low-enriched-uranium for nuclear fuel.

The World Nuclear Association website states that there are 432 operable civil nuclear power plants around the world and 67 under construction – and they will all need uranium. “That’s a really important point because if you are building a nuclear power plant, to finance the construction, you need to lock in supplies of uranium,” said Rule. “Lenders want to know that you are going to have uranium supplies in order to amortize the loan. That’s the reason why, although the spot market is at US $40 a pound, the term market is at US $60-65. All those nuclear power plants have to lock in uranium supplies over the long term. The price of uranium is a fairly insignificant contributor to the total cost of generating nuclear energy. Demand is surprisingly inelastic relative to price.”

Rule said it is also worthy to note that as the industry matures the average plant size has been growing. The plants that are being built today, say in China, require four times as much fuel as in the past, such as the one at San Onofre on the coast of Southern California.

Regarding the stock market, is Rule expecting that a rise in the uranium price will increase the shares price of uranium explorers? “Mostly not,” he speculated. “We learned in the last cycle that exploring for uranium is a high-risk exercise. I would suggest that there are seven or eight uranium juniors who actually have some uranium resources that have some leverage to the uranium price. As we have learned with other mineral exploration industries, if the price of something you don’t have goes up, it doesn’t dramatically change the fortune of the company. I think investors have wised up since the last uranium boom in 2004.

Would now be a good time to buy shares in uranium producers? “I think that is probably accurate,” said Rule. “There are a couple of ways to play this,” Rule notes. “Uranium Participation Corp. trades on the TSX and is a uranium investment holding company. They don’t have any exploration or operational risk. The uranium producers from the biggest ones on down may be more leveraged to uranium prices, but more risky.”

“For readers of Resource World, who are willing to take exploration or developmental risk, I think you come down to the third tier which are exploration and development focused juniors who have already found deposits – probably deposits that could not be put into production at US $40 a pound, but would be considered resources or reserves at US $80.

Rule doesn’t think uranium discoveries will kick-start uranium stocks in general. “I believe that the investing community observed during the last cycle that success in uranium involves a management team with experience in uranium,” he noted. “There are probably no more than 20 such teams out there. So I suspect that a rebound in the uranium price will lead to a dramatic response in a few stocks, but I don’t think it will be broadly based.” Rule said it’s a good idea for investors to focus on teams that have been successful in the uranium sector in the past.

As to when the price of uranium will rise, Rule is of the view that it may or may not be imminent. “It wouldn’t surprise me to see uranium to trade sideways for 18 to 24 months,” he said. “However, it wouldn’t surprise me to see it go up at the end of this year. Commodities can be priced below the cost of production for longer than we would have thought possible given the upfront capital expenditures that have gone into industries. When you ask yourself a ‘when’ question as opposed to an ‘if’ question, then the real question is: when will I make some money and not if I will make money.”

Rule thinks there is still opposition to nuclear power in places that believe that they can afford to do without it. “In the US, where we have abundant low cost natural gas, moderating energy demand, and a stagnant economy, I don’t see growing uranium demand. In Germany, there will be a growing indirect demand from obtaining nuclear power from France and Poland.”

“The rational and technically-oriented part of the environmental community is realizing that nuclear power has to be part of the energy mix,” says Rule. “There are three and a half billion people in the world who would like to live, like us, with energy-intensive lives, so uranium has to be part of the energy mix.”

As far as the general junior mining sector goes, Rule isn’t expecting a turnaround any time soon. “The excesses that were bred into the sector in the 2002 to 2010 bull market were so extravagant that they need to be wrung out of the system. It’s my belief that, on a worldwide basis, probably 70% of junior exploration companies are valueless. I may be wrong, but I believe that the market has already started to bifurcate, or if it hasn’t, will bifurcate this fall where the best 10% of [junior] issuers will bottom out and begin to head up. But it won’t feel like it because there is probably something like 2,500 junior explorers worldwide that don’t have any value.

Back in the 1990 to 1992 bear market, there was a cleansing of the market that was very healthy. When the diamond discoveries were made in 1993, the response to the market, that was cleansed of the lame companies, was spectacular.” Rule says that cleansing of the market can lead to a spectacular and violent recovery. He notes that investors must target companies that not only have a good project, but good fund raising ability.

“It probably takes a minimum of $600,000 a year for general and administrative expenses to run a junior exploration company,” said Rule. “This means the company must have the ability to raise and intelligently allocate $2.5 to 3 million a year to have a meaningful exploration program. We need to cut the market back to where it’s viable. Investors need to carry out qualitative differentiation [to seek out the best companies in which to invest.]”