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Investments
Uranium and Coal
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Click here to read Pinetree's Disclosure Criteria
Uranium
Pinetree developed a positive view of uranium in 2004 based on several macro factors including global growth led by China and India and the renaissance of nuclear power, seen as a clean reliable base-load generating technology. Growth in energy needs, primarily from China and India, combined with concerns for the environment continue to keep the price of uranium high. On the supply side, the flooding of the Cigar Lake project and Ranger mine are removing supply in the near and medium term. Unless a significant number of additional mines are brought to production soon, we see demand outstripping supply into the foreseeable future.
Pinetree began investing in uranium when it traded at $20/lb. With no official uranium market it is difficult to assess the spot price for uranium. Only small quantities of uranium were actually selling at the high levels seen in early 2007. At Pinetree, we believe a realistic spot price for uranium is between $80-$100 lb, a price which makes many new discoveries very economic to mine. Pinetree is investing in junior uranium companies that are not locked into historical contracts and as a result are able to take advantage of higher uranium prices when negotiating supply agreements.
Coal
Coal is the largest source of energy for the generation of electricity worldwide – extracted from underground mines or open pits. It is primarily used as a solid fuel to produce electricity and heat through combustion. World coal consumption was approximately 7,743,786,000 short tons in 2006, with an expected increase of 48% to 9.98 billion short tons by 2030. Consumption of coal is increasing and the price of coal had increased from around $30.00 per short ton in 2000 to approximately $111.50 as of October 2008.
With world steel production continuing to rebound from the global economic crisis, The World Steel Association is forecasting a 9.2% increase in steel demand for 2010 and a return to the record production levels of 2008. Emerging economies, especially China and India, will be the critical factor driving world steel demand in the near future. China currently accounts for almost 50% of both the supply and demand of steel products and Indian steel manufacturing is forecasted to reach record levels this year. This has resulted in strong demand and higher prices for metallurgical coal in fiscal 2011. Metallurgical coal is used for the iron and steel industry, foundries and other industries. The coke developed from coal is used chiefly to smelt iron ore and other iron bearing materials in blast furnaces, acting as both a source of heat and a chemical reducing agent, to produce pig iron or hot metal. With the increase in demand for the steel and iron industry, Pinetree holds a positive view of coal. As of April 2010, the price for metallurgical coal has been over $200 per ton.
Coal is mined in over 100 countries and on all continents except Antarctica. The largest reserves are found in the USA, Russia, Australia, China, India and South Africa. Pinetree invests in coal mining companies with a track record of safety and environmental responsibility.Uranium and Coal Investments as at June 30, 2010.
Cline Mining Corp. (CMK:TSX)
13,500,000 common shares
Continental Precious Minerals Inc. (CZQ: TSX)
2,000,000 common shares
1,000,000 warrants expire May 6, 2012
Energy Fuels Inc. (EFR:TSX)
4,500,000 common shares
Forum Uranium Corp. (FDC:TSX-V)
10,496,500 common shares
3,000,000 warrants expire Apr 22, 2011
Mega Uranium Ltd. (MGA:TSX)
13,400,000 common shares
914,712 warrants expire Feb 22, 2012
1,500,000 warrants expire Oct 26, 2014
Pele Mountain Resources Inc. (GEM:TSXV)
8,000,000 common shares
1,000,000 warrants expire Feb 22, 2010
Rockgate Capital Corp. (RGT:TSXV)
8,500,000 common shares
500,000 warrants expire Mar 27, 2010
250,000 warrants expire Jul 28, 2011
Sparton Resources Inc. (SRI:TSX-V)
8,236,500 common shares
2,500,000 warrants expire Oct 5, 2010
Tournigan Energy Ltd. (TVC: TSXV)
10,000,000 common shares
U308 Corp. (UWE:TSX-V)
2,550,100 common shares
Uranium Resources:
The Ux Consulting Company: http://www.uxc.com
Uranium Information Centre: http://www.uic.com.au/
Trade Tech: http://www.uranium.info/
World Nuclear Association – www.world-nuclear.org
World Nuclear News – www.world-nuclear-news.org
Canadian Nuclear Association – www.cna.ca
Uranium Information Center – www.uic.com.au
The Canadian Nuclear Society – www.cns-snc.ca
WISE Uranium Project – www.wise-uranium.org
The Australian Bureau of Agricultural and Resource Economics (ABARE) - www.abareconomics.com
International Atomic Energy Agency - www.iaea.org
