Canaccord-Morning CoffeCanadianandU.S.CommentsforMondayJuly20,20095
Denison Mines* (DML : TSX : $1.93), Net Change: -0.06, % Change: -3.02%, Volume: 1,263,047
Hathor Exploration* (HAT : TSX-V : $1.88), Net Change: -0.01, % Change: -0.53%, Volume: 215,389
Northern Continental* (NCR : TSX-V : $0.29), Net Change: 0.00, % Change: 0.00%, Volume: 490,350
It’s like when Pac-Man eats a power pellet. Was Hathor’s surprising offer to acquire all the outstanding shares of Northern
Continental a cry for attention? How else would you explain someone wanting to go up against one of the most aggressive and
savvy mining entrepreneurs of all-time in Lukas Lundin? Last week we mused, “Could Denison let Northern Continental fall
into the hands of Hathor and then make a bid for Hathor down the road?” Is this “Pac-Man” scenario really that far fetched?
Canaccord Adams Metals & Mining Analyst Eric Zaunscherb considers Hathor’s Roughrider discovery the most important
high-grade uranium discovery of this cycle for its high grade, shallow depth (approximately 210 metres to the unconformity)
and likely amenability to open-pit mining, remaining potential for scale, and proximity to under-utilized mills within 25
kilometres. Arguably the second most important discovery in the Athabasca Basin recently has been the Wheeler zone of
Denison Mines. The heavily promoted discovery helped Denison pull out of a severe share price plunge from $16.57 in May
2007 to $0.69 in December 2008. Falling uranium and vanadium prices had made it difficult for Denison to deal with its debt
load and the discovery helped pull in strategic investor and off-take purchaser Korea Electric Power Corporation. For Hathor,
strategically placed holes this summer could help “connect the dots” around previous high-grade intersections with very positive
implications for contained U3O8. But Hathor is certainly being ignored by the marketplace at this time. We don’t think it likely
that Hathor will score a win, but Northern Continental shareholders may be grateful for, what we believe, will be the topped up
offer from Denison.