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Green Stocks: This Company Recycles Nuclear Waste and It’s Undervalued by a Factor of Five…

Posted December 13, 2007

A Today's Financial News Research Report:
This company holds seven patents through which they can monetize depleted uranium and solve the major environmental problems associated with nuclear power.

by Chris DeHaemer, Editor, RedZone Profits

Today's Financial News feed provides an independent and practical perspective on the U.S. and global investment markets. Subscribe in a Reader or Subscribe via e-mail

It is becoming clearer and clearer that all of the easy, low cost oil has been found. We aren't going to run out of oil, but the high price of crude will mean that, for the first time in history, secondary sources or energy are now viable for the long haul, not just the current energy cycle.

Along with all types of alternative energy, nuclear power is making a massive comeback. Tennessee Valley Authority and New Start energy just filed an application for the first new nuclear power plant in the U.S. since the Three Mile Island meltdown three decades ago.

It's taken a generation to forget about the downside to nuclear power: radioactive and toxic waste and the storage and transportation problems that go with them. There is one U.S.-based company that has a solution to some of these problems.

Idaho Falls, Idaho, is the home of one the last federal research nuclear reactors in the U.S. And there is a small company there that is turning dangerous waste created during the uranium enrichment process into a valuable asset.

I'll run though the basics here, but don't worry if it's a bit overwhelming. I'm simply trying to convey the idea that this process works.

Uranium Oxide to Electric Power: The Process.

All uranium oxide comes out of a mine and is milled into "yellowcake" (U308) and then converted into uranium hexafluoride (UF6). UF6 is a very dangerous, toxic gas. This is taken and enriched into U235, which in turn is processed into nuclear fuel.

During the enrichment, which removes the fissionable U235, a byproduct is created called depleted uranium hexafluoride (depleted UF6), or depleted uranium.

Depleted UF6 is a highly toxic gas and a radioactive hazard with no economic value. It is very dangerous to store or transport depleted UF6. Depleted uranium has long been the bugbear of environmentalists for good reason; it's deadly stuff.

But here's the deal: The Department of Energy is currently storing 1.5 billion pounds of depleted UF6. This stockpile grows on a continual basis as the world produces 250 million pounds of the depleted UF6 every year.

And due to the global expansion of the nuclear power industry, these stockpiled will expand exponentially. Egypt, China, France, Japan, Turkey and others have plans to build more nuclear power plants.

But there is good news: There is one way of disposing of depleted UF6 by defluorination. This turns the gas into low value hydrofluoric acid and depleted uranium oxide. However, in the past this process is not economically viable, which explains why there is 1.5 billion pounds of depleted UF6 rusting away in steel drums.

But there are a few companies that are defluorinating depleted uranium using a new process that make does it economically viable. One of these companies is International Isotopes (INIS), based in Idaho Falls. It has a proprietary, revolutionary technology for defluorinating depleted uranium in a manner that produces high-value fluorine gases.

International Isotopes’ core business is nuclear medicine, and it makes about $5 million a year in revenue. As part of this business, the company has licenses from the Nuclear Regulatory Commission to import, export and store radioactive materials.

Recycling Depleted Uranium

After some false starts and a change in leadership, the new management is focused on recycling depleted uranium since it represents billions of dollars of revenue potential.

The high-value fluorine gases can be used as a fluorinating agent to produce Freon or fluoropolymers. There is also a real possibility that depleted uranium oxide can be used as fuel in MOX nuclear reactors.

The key here is that INIS holds seven patents through which they can monetize depleted uranium and solve the major environmental problems associated with nuclear power.

(Report continues below…)

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Comparable: Silex

The only real comparable is Silex (SLX AU), an Australian development-stage company that is commercializing a new laser separation technology for uranium enrichment. SLX has licensed its technology to GE in exchange for a 7% royalty. Based on this 7% royalty, SLX’s stock has risen from AUD0.38 to AUD10.50. It is currently trading at AUD8.55 with a market cap of $1 billion. This is a company with zero sales.

INIS trades at US$0.62. Its market cap is only US$153 million. It owns the patents for the Fluorine Extraction Process, a method of monetizing the unwanted byproduct of uranium enrichment.

The price of uranium went from $7 to $140 and now down to $84. With the pullback, the fluff has been taken out of uranium speculation. But the 400 new nuke plants worldwide are still being planned, and the price of oil is going ever higher.

International Isotopes (INIS.OB) Two-Year Chart

International Isotopes is a company run by scientists, not Vancouver P.R. firms. So don't expect a lot of talk or appearances on CNBC, the Hee Haw of Wall Street. But as you can tell by its chart, the word is getting out.

Buy International Isotopes (INIS.OB) up to 75 cents as a pure play on recycling waste left over from the nuclear enrichment process. All the dominant trends are lined up. A few positive developments could make this a billion-dollar company. That said, don’t bet the farm.

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