Oversold Platinum and Uranium May Provide Great Upsides

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...the more cautious investor could do worse than look at current major pgm and uranium producers whose stocks have also fallen drastically, but which have the financial clout not only to survive the downturn relatively easily, but also to enhance their longer term positions by snapping up juniors and new producers with good projects which are financially stretched. (We are already seeing this happening).

...Recently the minerals commodity sector, with some exceptions, has seen a huge sell-off which has brought relevant stock prices down by up to 60 percent in a matter of months ...

But, if investing in the sector - particularly in the junior market where the risk/reward ratio can be enormous - one really needs to do one's due diligence. Companies with a good resource, and plenty of cash to tide them through the current price doldrums, and which may also have access to sufficient power given that most are located in power-deprived South Africa, could provide some real bargains, either in their own right, or as take-over targets where larger cash-rich organisations may see bargains out there...

To an extent the same is almost certainly true of the uranium sector. The drive to build new nuclear power plants remains in place and a big medium term supply deficit seems evident. The price appears to have bottomed and many would see the only way as up...

Here the uranium price boom stimulated a huge number of uranium explorers to come into existence and generate exploration funds. Many of these now have little or no chance of survival - but here again, those with cash to see them through this troubled period and seen to have access to a good resource can provide great bargains for the bottom-feeding investor - again either in their own right, or as take-over targets as the majors look to securing future supplies.

While the above comments largely relate to junior miners and explorers, the more cautious investor could do worse than look at current major platinum group metals (PGMs), and uranium producers whose stocks have also fallen drastically, but which have the financial clout not only to survive the downturn relatively easily, but also to enhance their longer term positions by snapping up juniors and new producers with good projects which are financially stretched. (We are already seeing this happening).

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