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February 23, 2012

South Korea has two new nuclear power plants, China invests in nuclear research and Energy in Saskatchewan

1. World Nuclear News - South Korea's two newest nuclear reactors, Shin Kori 2 and Shin Wolsong 1, have been connected to the grid.

Shin Kori 2 started up in December 2011 and was connected to the grid in January, joining Shin Kori 1 which entered commercial operation in early 2011. Meanwhile, Shin Wolsong 1 started up and was connected to the grid in January. Its sister plant, Shin Wolsong 2, is expected to start up before the end of 2012.

The two units are both South Korean-designed OP-1000 pressurised water reactors and are due to enter commercial operation by the middle of 2012.




2. China Daily - A total of 1.75 billion yuan ($280 million) was invested in China's independent nuclear research and development in 2011, the China National Nuclear Corporation (CNNC) said on Tuesday.

After years of efforts, the CNNC's work in the field is bearing fruit, with successes including China's first fast reactor, advanced uranium enrichment technology and nuclear power technology.

3. Tom MacNeill (CEO of 49 North Resources) is interviewed by The Energy Report and he explains why Saskatchewan resource plays trump their Alberta or Ontario counterparts.

We (Saskatchewan) view ourselves as much better off than Alberta from a geological perspective. The Western Canadian Sedimentary Basin overlays almost all of Alberta, meaning there’s really no hard rock mining with the exception of some coal mining and some other assets in the Rockies. Alberta is very much an “energy only” resource province.

Saskatchewan is the opposite. The sedimentary basin covers the southern half, but the northern half is exposed Precambrian shield. We’ve got all of the mining prospectivity and assets that you would find in Ontario and other hard rock jurisdictions, plus all of the oil and gas that you find in Alberta, and a sea of potash and other natural resources. You name it, we’ve got it. The neatest part is that it’s mostly still in the ground. There are 27 active mines in the province, but we should have a multiple of that given our resource base.

There is $15 billion (B) worth of capital committed already to expansion in the potash industry, not including capital commitments from BHP Billiton Ltd. (BHP:NYSE; BHPLF:OTCPK), which is moving into the final feasibility stage of its 8 million tons (Mt) per annum potash mine at Jansen Lake. When mining is combined with our exponential growth in energy development I expect that $15B will double or triple in the next 5-10 years.

One new gold mine just came on-stream this past year. There are three others that are prospective in the Greenstone Belt in northern Saskatchewan. There’s a potential rare earth elements deposit that’s near development. In the next 10 years, at least 10–20 mining operations should reach feasibility in the province.

There was a physical price spike in 2006 due to uranium speculators. It created a parabolic price chart, so we knew that the price of uranium was going to come off. When that happens, all of the junior explorers get crucified. We took that time to exit our positions.

We’ve been diligently watching the uranium price chart and energy complex in general and view this year as the time to be taking positions. Uranium stocks have been beaten up. That’s the time when we get involved in projects and we’re actively pursuing more than what we have on the books right now.

We’ve got a significant investment in Unity Energy Corp. (UTY:CVE), which is an early-stage explorer in the same area as Hathor Exploration Ltd.’s (HAT:TSX.V) RoughRider deposit and the area were Fission Energy Corp. (FIS:TSX.V; FSSIF:OTCQX) is exploring. Also we have been accumulating a large position in Eagle Plains Resources. They have substantial landholdings in the Athabasca basin in Saskatchewan and recently announced a high-grade uranium discovery on their property near the Rabbit and Cigar lake mines.

We’re focusing on heavy oil and coal (for conversion to crude oil), but our backyard is unique. There are 20–40 billion barrels (Bbbl) of heavy oil in place in west central Saskatchewan. There are also staggering quantities of light oil as well in Saskatchewan, but I’m not as interested in that. Everyone knows about the Bakken shale and other tight light oil plays now being developed using modern multi-staged fracturing but very few follow heavy oil development.

My interest is tied to the recycle ratio, which is the net profit/bbl divided by acquisition and development costs/bbl. The ratio for light oil in Saskatchewan averages somewhere around two, meaning if a company puts $1 million (M) into acquiring and developing an average well, it will get $2M out of it. But heavy oil in Saskatchewan can have a recycle ratio as high as five.

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