Friday, April 25, 2014

Powertech Stock Goes Nowhere After Hoopla Over NRC Approval. Company Officials Get Mad At The Rapid City Journal.

     Lessee, it's been a couple of weeks now since Azarga/Powertech (a merger made in penny stock heaven--I'll just refer to it as "Powertech" here) got approval from the Nuclear Regulatory Commission on its Dewey-Burdock application.  Dewey-Burdock is the site in the southern Black Hills where the company wants to set up a uranium mining venture that will contaminate the ground water for probably time immemorial.  And yes, I said contaminate forever, because according to the science directed at this "in situ" type of mining, among the risks of the process is "the impossibility of restoring natural groundwater conditions after completion of the leaching operations."  To date, approval is based on being able to restore the water to its pre-mining uses, merely making it potable.  That means contaminants from the in situ leaching process can remain, so long as they are at levels deemed safe for human consumption.  To which I say, yeccchh.  I've been around this old planet a few times and I've had my share of water considered safe for human consumption that made me want to gag as I quaffed it.  If that's the kind of  "potability"  that Powertech's footprint will leave in the Black Hills, I join the chorus of those around here who would like the company to get lost.
     Meantime, I've been following the company's fortunes for the better part of a year now, given how many people I know are fighting tooth and nail to keep this outfit away from here.   A company like this (worth 7 cents a share as I write)  trades on the "penny stock" market, a haven for all sorts of risks per NASDAQ's assessment, which include "lack of information available to the public . . .no minimum standards . . . lack of history . . . [and lack of] liquidity."  Stocks like this prosper--if they do--when some big news about their prospects suddenly disseminates through the world of brokers who use big announcements to hype their inventories of stocks worth a few pennies.  Given the way company officials at Powertech honked loudly over the news a few weeks ago that the firm had just gotten approval from NRC for its Black Hills venture, you'd think some upside follow-through on the price of the stock was in the cards.
     The follow-through never happened.  Tracking the stock at PWURF, you can see that since the NRC news came out, it has traded within a penny or two of its pre-announcement price, with this morning's market about unchanged from the day the news came out.  My sense is that penny stock speculators, despite the NRC nod, know that approval is still a long ways off, considering that South Dakota-based hearings aren't even scheduled until August.  Those who've owned this stock for several years now, having bought it back in '07 when it was around $4/share, and even those who bought in '11 at 50 cents/share, must be extraordinarily frustrated.  The "bag-holder blues" is a very sad song indeed.
     I suspect shareholder frustration is what manifested into a laughably bungled effort at complaining about the media this week.  My friend Cory Heidelberger in his blog (the best political blog in South Dakota, hands down) The Madville Times reports that officials at Powertech complained to the Nuclear Regulatory Commission about a Rapid City Journal editorial that faulted NRC's approval of the Black Hills mining venture. NRC, in wonderfully terse beauractic-ese, told Powertech to stuff it.   Heidelberger provides a pdf copy of the entire e-mail exchange between the company and NRC.
    The old "blame the media" dodge is a time-honored political gimmick that I believe is generally used by the losers of a political tussle.  I've never actually seen it applied to a situation from a private sector venture, and I doubt that Powertech will be setting any sort of precedent here.  Indeed, if the incident follows form, Powertech will be among the list of losers who complained about the media as they morphed into the obscurity they deserved.

   

4 comments:

  1. Lynn G. here. John it looks like this company is throwing out a series of "Hail Mary" passes. I'm very skeptical when it comes to things like this feeling it will end up that promises are not kept being over sold and the Taxpayers end up once again subsidizing and cleaning up a mess. The main problem is how would you clean up that contamination knowing that rate of Radioactive decay in water? You can't right? Then what about leaching into other water sources such as Aquifers?

    If they are basically a penny stock company are they not really underfunded which raises red flags right away?

    I feel with the climate changing and droughts and chemical contamination, clean water will easily increase in value and become more scarce as a resource.

    One memory I had from childhood back in the 70's was my father telling me to turn off the water faucet while brushing my teeth because besides it wasting water someday in the future wars will be fought over water. Lynn G.

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    1. This gambit with the RCJ editorial sure smacks of desperation to me, Lynn. The science is over my pay grade, but the "red flag" for me is that the water quality has to be returned to its prior use for approval, not its prior condition. I don't like that. As to the company's financials, it's hard to get data from a "pink sheet" penny stocks aren't required to submit financials nor even file with the Securities and Exchange Commission, so they escape scrutiny and regulation (note my link to NASDAQ for a more complete exposure of these stocks and their risks). Having had to deepen a well a few years back when the drought was bad, I can attest to the value of water! I think your dad was on the right track.

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  2. Lynn G. again.

    John you stated "the "red flag" for me is that the water quality has to be returned to its prior use for approval, not its prior condition. I don't like that." I agree!

    Besides the factors I mentioned above we are simply using more water with population growth, development and industry. Ethanol uses quite a bit of water for example and look at the battles for water in the South West. I could go on but just say there are many forces at play and water is such a precious resource that seems to be undervalued.

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    1. I often think that if we rationed water by finding some sort of supply/demand model that made people pay for it on a market-determined basis that we'd stretch the availability of this resource considerably. E.G., when I'm in Southern California and people are nearly hysterical about a drought even while golf courses are consuming enormous quantities of water (nothing against golfers, just making an observation) I can't believe there's serious concern about water supplies.

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