PLS best since Hathor, says CannacordStockhouse editorial:
What follows is an excerpt from the Canaccord Genuity Morning Coffee newsletter:
There has been little to get excited about in the junior market lately, but one of the few standouts is the developing Patterson Lake South joint venture in the southwestern Athabasca Basin, and its 50-50 joint venture partners Fission Uranium Corp. (TSX: V.FCU, Stock Forum) Alpha Minerals Inc.’s (TSX: V.AMW, Stock Forum).
This week, Canaccord Genuity Mining analyst Joe Mazumdar initiated bullish coverage on AMW and FCU, highlighting that he views the PLS project as the most attractive uranium project in the hands of a junior mining company since Hathor Exploration’s Roughrider project (57 million pounds grading U308), which was acquired by Rio Tinto Plc (NYSE: RIO, Stock Forum) for $654 million, and valued the resource at US$11 per pound U308.
Mazumdar has not ascribed a target to either company as the underlying asset does not have a NI 43-101 compliant resource. However, his estimates suggest that at a discount to the Roughrider acquisition ($7 per pound, versus $11 a pound U308), the project may have an implied value of US$350 million, which is 50% higher than his estimates for the current market implied value.
Important potential catalysts going forward include the results of the current 2013 summer drill program (July-September), followed by a winter program (January-April 2014).
Mazumdar believes that after the 2013 summer program, they may drill close off the ROOE zone to estimate a resource for the zone by the first half of 2014.
Further drilling and exploration will be needed to attain the critical mass of 40-50 million pounds of U308 to justify a stand-alone plant.
Prior to any potential take-over by a suitor, as was the case for Hathor Exploration, Mazumdar believes that the PLS area will need to be consolidated under one entity.
Read more at
https://www.stockhouse.com/news/natural-resources/2013/07/26/fission-uranium-(tsx-v-fcu,-stock-forum)-project-i#tu3Kvgf91xcqbOcB.99