Market Commentary & Pele
Market Commentary
May 07, 2007
Uranium company stocks continue rally: Dow ties 80 year record
Publisher: U3O8.biz
Author: Robert Simpson
Uranium company stocks continue rally: Dow ties 80 year record
Uranium exploration and producers stock continues to rally in the wake of futures trading on the NYMEX and spot price of uranium hitting a record $120 a pound.
Leading the junior advances was Altius Minerals Corp gaining $1.00 on 333,582 shares traded. Altius is a significant shareholder of Aurora Energy which saw its share price skyrocket $1.78 last week to end at a year high of $19.40.
Almost 1.15 million shares traded in Aurora as investors position themselves in advance of news expected on Aurora's winter drill program on projects in the Central Mineral Belt of Labrador. The trend continued Monday with 209,000 shares trading up 2.9% (0.57 cents) at $19.97. Fronteer Development Group which holds a 47.24% interest in Aurora Energy Resources closed up 0.97 cents at $15.52 Friday and spiked to $15.83 on high volume trading early Monday.
Crosshair Exploration, also exploring in the Central Mineral Belt of Labrador, closed up $0.32 cents in anticipation of the Company listing its stock on the AMEX on Monday. On open Monday the company thinly traded on the AMEX, but the remainedin positive territory closing at $3.19.
Shareholders in Continental Metals continued to position themselves in anticipation of results from nine drill holes on the Pleutajokk property in Sweden, and on news the company secured nine more additional mineral exploration licenses from the Inspectorate of Mines in Sweden. The Pleutajokk property has an inferred resource of 1,743.7 tonnes U3O8 grading 0.107 % and an inferred resource of 551.0 grading 0.117% U3O8.
Energy Metals saw its share price close in positive territory at $13.70 after announcing the company entered into an agreement to supply of uranium concentrate to a U.S. nuclear utility. The contract covers the sale of 1.4 million pounds of U3O8 for delivery over a six-year period beginning in 2010. The terms include market-related pricing along with floor price protection. Energy Metals Hobson/Palangana uranium project is scheduled to start production in 2008.
First Uranium Corporation stock closed down at $12.86 after announcing its subsidiary, First Uranium (Proprietary) Ltd., entered into a agreement to acquire Mine Waste Solutions (Proprietary) Ltd. (MWS) and its subsidiary Chemwes (Proprietary) Ltd. MWS owns and operates an existing gold mine tailings and reprocessing facility adjacent to First Uranium's Buffelsfontein tailings recovery project in South Africa.
Shareholders also took profits after First Uranium Corp. completed its private placement of $150-million total principal amount of 4.25-per-cent senior unsecured convertible debentures due June 30, 2012.
The debentures will bear interest at a rate of 4.25 per cent per year, payable semi-annually, and will be convertible into common shares of the company at $16.42 per share, representing a conversion premium of approximately 37.5 per cent to the closing price of the shares on the Toronto Stock Exchange on April 18, 2007.
The company intends to use the net proceeds from the sale of the debentures: to finance a drilling program and feasibility study in respect of the possible expansion of its Ezulwini underground uranium and gold project in South Africa and to finance the development of the company's Ezulwini underground mining project and its Buffelsfontein tailings recovery project in South Africa.
Pele Mountain closed up 16 cents last week after delivering positive drill results from the Elliot Lake Uranium Project. Shareholders also rewarded the company for transferring the Elliot Lake uranium holding to a subsidiary company, a pure uranium play that will be valued on its independent merits. The Elliot Lake Project currently hosts a compliant inferred resource of over 33 million pounds of U3O8.
On Monday the company announced additonal intercepts of 0.218% U3O8 over a core length of 1.26 metres and 0.572 per cent U3O8 over a core length of 0.32 metres (true width is unknown at this time). The stock climbed 18% to $1.19 on the news.
Laramide Resources benefited form more promotion after a Globe and Mail article quotes Webb Asset Management chairman Derek Webb who sees the potential shift in Australian government mining policy as Laramide's ticket to increase production. The company stock had fallen $2.69 after the Queensland premier said he would not allow uranium exploration despite the recent Labour party's change of policy in favour of uranium mining. Laramide's key Westmoreland uranium project is located in Queensland.
SXR Uranium One closed up on high volume trading after receiving a strong buy recommendation by Raymond James analysts with price target of $21.25. Shares continued to trade up on Monday after the National Post published the buy recommendations saying " SXR Uranium One Inc's purchase of the Shooting Canyon Mill in Utah could be a sign of things to come.
On Monday, Tournigan Gold saw its share price climb 19% to C$3.58 after announcing a new resource estimate for its Kuriskova (formerly called Jahodna) uranium deposit in eastern Slovakia. The new inferred resource estimate, indicates that the Kuriskova resource has grown to more than 50 million pounds of U3O8, nearly three times the last resource estimate of 18 million pounds.
Bluerock Ventures' stock price increase to C$0.55 up 17% as investors take advantage of the buying opportunity resulting from speculation on a round of warrants expiring May 10th. According to the company, drill results from the Tramp mining where historical grades are reported from 0.05% and 0.45% U3O8 over significant intersections will be available within weeks. The current drill program is twinning these historical drill holes.
The uranium index continued its upward climb at the beginning of the week to record highs of 1091.74 points, up 24.7 points on the day of 2.27%.
The Markets
As it stands now, the Dow Jones industrial index is on pace to tie an 80-year-old record on Monday by matching its longest streak of gains with only three declining days mixed in-between.
According to the people who tabulate the blue-chip index, the Dow posted gains in 24 of 27 trading sessions in 1927. If the Dow ends higher on Monday, it would match that record.
Driven by Monday's blockbuster bid by Alcoa Inc. for Alcan Inc., Wall Street is 37 points higher at midday, surpassing 13,300 for the first time.
Key to that is billionaire investor Warren Buffett telling the annual meeting of his Berkshire Hathaway Inc. that he is open to making a "huge" acquisition.
On the TSX, Alcan's 33 per cent advance is contributing 78 index points to the composite's 102-point climb at midday. More than 36 million shares have traded on the NYSE and TSX so far.
Only consumer staples, energy, information technology and telecom stocks are in negative ground on the TSX.
You can view the Next Market Commentary item: Sat May 5, 2007, Uranium spot price climbs to all-time record highs of US$120/pound