Musings on Investing

Uranium Mining: Should You be Investing?

Renaissance Gold (REN)

Investing in mining shouldn’t be about speculating in commodities. Moreover, speculating in commodities is a dangerous job, from which only a rare person comes out unscathed, and even there mostly because of luck.

There is a reason why commodities are called “commodities.” They are liquid. They trade without necessarily a need for face-to-face negotiations. They have spot prices and often future prices.

A speculator in commodities and currencies often labels himself a contrarian, imagining himself to be a holder of superior knowledge. He mostly locks himself in an echo chamber of similar “contrarians,” and trades soundbites.

Peter Bacchus, previously of Jefferies and Morgan Stanley, is doing IPO of US$160 million to buy 8.1 million pounds of uranium. Those who manage such businesses, and those who warehouse and trade uranium will do well. But would you as an investor make money? I explore this issue in details in my linked article for Mining Journal.

At the recently held International Mining Investment Conference we had a discussion on which regions to invest in, commodities, and crypto-currencies:

On investments…

I have in the past written about Renaissance Gold (REN; C$0.19). It is one of my favorite generative companies, focused mostly in Nevada and Utah–as much as possible, I prefer investing in companies in safe jurisdictions. REN has seven projects that will be drilled this year. And it is trading at a 20% discount to its recent financing price. At C$0.19, I am happy to buy.

Warm regards,

Jayant Bhandari

 

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