December 29, 2006 - 8:29am EST by
2006 2007
Price: 2.50 EPS
Shares Out. (in M): 0 P/E
Market Cap (in $M): 49 P/FCF
Net Debt (in $M): 0 EBIT 0 0

Sign up for free guest access to view investment idea with a 45 days delay.


The best & cheapest way to play Uranium is via U308 Corp. which begins trading TODAY. With exclusive rights to the Roraima Basin in Guyana that geologists compare with Athabasca, U308 is at an early stage but poised to prove up what should be a world class deposit with 43-101 compliant resources by May 2007.  It has the benefit of previous work done by Denison Mines (‘68-70) and Cogema (‘79-84) that drilled over 36,000 ft in 253 holes with much of the associated maps, well logs, core samples, seismic, and other data with Uranium shows up to 7700 parts per million.
There are 23m post IPO shares after their IPO offering led by Sprott.  Market cap is sub US$50m. Cash on hand post offering will be over C$30m which will be used for additional drilling and analysis to get 43-101 compliant (the Canadian standard to be able to state resources as “Measured, Indicated, and Inferred”).
Uranium Market
The long-term contract price of Uranium was fixed this week at $75.  That’s up 1000%+ since the beginning of the decade and more than double this year as Utilities are scrambling to secure their future supply.  It is a market that has elastic demand and inelastic supply… a powerful combo for commodity investment when prices are rising..  Given the difficulties in obtaining government approval for Uranium mining, a supply response to any demand growth is years delayed.  Current worldwide demand is approximately 188 million lbs per year with only approximately 105 million lbs supplied by the mining sector.  The balance is provided by the “Megatons to Megawatts” program where US & Russian warheads are de-enriched from weapons grade to utility grade and sold into the market.  This government program is ending and the private sector is going to have to fill the sizeable gap.  In addition, emerging economies are building new nuclear power plants fast & furious while G6 nations are more slowly coming to realize that nuclear is the cheapest alternative.  There are currently approximately 440 nuclear power plants (104 in the US providing fully one third of the USA’s power needs).  An additional 20 plants are under construction with 40 more in various stages of permitting, and dozens more in planning stages.  Demand five years out is expected to be over 220m lbs/yr, so the mining industry must more than double its output to keep up.
Looks a lot like Athabasca
U308’s has exclusive rights to prospect for Uranium in Guyana, a democratic country in South America that has been a friendly host to 14 other mineral exploration and mining companies with stable relations for decades.  None of the others are seeking Uranium.   U308 has two permitted exploration areas each covering a gigantic land area.  The first is over 1.4 million acres to explore with rights to stake up to 15 Prospecting Licenses of up to 12,800 acres apiece (aggregate of 192,000 acres) at any time.  The second area is over 1.8m acres with rights for 20 Prospecting Licenses.  The topography and geology of the area looks exactly like Athabasca in Canada which holds some of the world largest Uranium deposits.  Geologists compare the Roraima Basin to Athabasca because both are intracratonic basins with similarities in terms of age, size, and sedimentary composition.
A Mr. Cleath who is now on the geological team stumbled on the Denison & Cogema data on an unrelated trip to the records room of the GGMC (Guyana Geology & Mining Commission) in 2004.  Realizing that the predecessors were working on a large find, he brought the idea to Allan Ibbitson, the CEO, to put together this venture.
Tests up to 7700 parts per million
The company expanded its seismic in Q3 2006 and is now drilling 20 prospects (14 of which were originally done by Cogema in ’79-84).  There are Uranium shows throughout the historical data and additional evidence in the recent drilling.  Uranium has already been found in this basin.  It is now a matter of quantification and U308’s large land area and exclusive rights to prospect for Uranium, in what appears to be a world class basin, make it a matter time before resources can be delineated.


Begins trading TODAY

Uranium price fix

Drill program findings and delineation of resource
    show   sort by    
      Back to top