Shares in First Uranium Corp. (0.52-0.04-7.14%)remain snuggled close to all-time lows after getting smacked Wednesdayin response to weaker than expected fourth-quarter results. A resurgencein negative sentiment toward uranium producers after the Japanesenuclear crisis hasn't helped matters.
Raymond James Ltd. analyst Bart Jaworski thinks investors may be wise backing away from the stock for the time being.
“Despite the recent share price weakness, we still believe investorsshould use caution with FIU, given continued uncertainty over liquidityand permitting,” Mr. Jaworski said in a note.
First Uranium lost 9 cents (U.S.) per share in the quarter, 4 centsworse than Street estimates, with similarly disappointing cash flowfigures. It also dropped its fiscal 2012 gold and uranium productionguidance.
First Uranium is developing gold and uranium extraction operations atthe underground Ezulwini mine and its Mine Waste Solutions tailingsrecovery facility, both in South Africa. It has a $150-million(Canadian) convertible debenture expiring in June of next year andanother $175-million of debentures due in 2013.
The lower production levels will make it more difficult to pay off thedebentures, Mr. Jaworski noted, although he retained a “market perform”rating on the stock - equivalent to a “hold.”
Downside: Mr. Jaworski cut his six- to 12-month pricetarget by 30 cents to 70 cents to reflect lowered guidance and higherfuture funding requirements.