Purepoint Uranium Group Inc V.PTU

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Strengths

Projects located in the Athabasca Basin, one of the largest uranium-producing areas in the world.

Joint ventures with major uranium miners: Cameco Corporation; AREVA S.A.; and Rio Tinto plc.

High-calibre management; considerable geological and mining expertise within the Purepoint group.

$3-4 million exploration and drilling program planned for 2011-2012.

Uranium price has revived and is on an upward trend.

Recovery in Purepoint share price reduces dilutive effect of any near-term equity financing.

Larger companies, including any one of its three major partners, could be a potential purchaser of any of

Purepoint’s properties, or of the Company itself.

Purepoint has acquired a large and enviable land position in Saskatchewan’s Athabasca Basin, home to one of the world’s largest uranium mining areas. Purepoint’s portfolio, see Table 1, page 4, comprises:

(1) ten 100%-owned properties comprising 34 claims and totalling about 105,000 hectares; and

(2) two partially-owned properties, with interests varying from 20% to 23%, comprising 8 claims, and totalling 35,000 hectares. The Company’s partners in the jointly-owned properties are all large, well-known, and influential global mining entities.

STRATEGIC PARTNERSHIPS

The project partnerships with Cameco Corporation, AREVA S.A., and Rio Tinto plc are strategic and, perhaps, unparalleled for a junior exploration company. Among the recent agreements with these large uranium producers are:

(1) the definitive option agreement with Rio Tinto Exploration Canada Inc. on the Red Willow project (announced in late December 2010), under which the Rio Tinto subsidiary can earn up to an 80% interest in the project; and

(2) the definitive joint-venture agreement with Cameco for ongoing exploration of the Smart Lake uranium project (announced in mid-January 2011).

Purepoint has also recently staked a promising 4,217-hectare property, known as Forsythe Lake, near the northeastern edge of the Athabasca Basin (announced in mid-January 2011). See map on next page.

Work is underway at most of Purepoint’s properties in preparation for drilling. A $3-4 million exploration and drilling program is planned for 2011-2012. Purepoint plans to go the equity market, probably before mid-year but depending upon market conditions, for financing for its 2011-2012 program.

Table 3: Intrinsic Values at Varying Property Ratios

Purepoint Uranium Property Ratio Intrinsic Value

Current Book Value 1.00x C$ 0.23

Current Property Ratio 1.62x C$ 0.40

Property Ratio: Next 12 Months 2.00x C$ 0.45

Property Ratio: Next 12 Months 2.08x C$ 0.47

Property Ratio: Next 12 Months 2.50x C$ 0.57

Property Ratio: Next 12 Months 3.00x C$ 0.68

Property Ratio: Next 12 Months 3.50x C$ 0.79

Property Ratio: Next 12 Months 4.00x C$ 0.91

Property Ratio: Next 12 Months 4.50x C$ 1.02

Property Ratio: Next 12 Months 5.00x C$ 1.14

The Intrinsic Value of Purepoint Uranium, at the peer average Property Ratio of 2.08x, is
.47 per share.

After a less-active period, since Purepoint is now becoming more aggressive in its activities (as outlined in this report), we believe the shares are deserving of a higher multiple. We have used a Property Ratio of 3.00x and derived an Intrinsic Value of
.68 per share.

We believe a premium should be ascribed to the calculation of the Intrinsic Value to reflect the many positive developments that will accrue to Purepoint Uranium for the ensuing year and which are not factored into the above calculations.

We believe that, after the Company’s next 12 months’ activities, further upside to the Company’s shares may come from the factors listed below.

The strategic initiative with Rio Tinto Canada;

The strategic initiative with Cameco Corporation;

The aggressive drilling program over the next 12-18 months;

The continuing recovery in uranium prices and the corresponding investor search for over-looked and under-valued junior uranium exploration companies, such as Purepoint Uranium.

From all of this, we have chosen a range for the premium to be added to the Intrinsic Value:

At a 30% premium, the augmented value equates (rounded) to
.88 per share.

At a 40% premium, the augmented value equates (rounded) to
.95 per share.

At a 50% premium, the augmented value equates (rounded) to $1.02 per share.

We are taking the 40% premium as the basis for our 12 months’ price objective, which gives us a Target Price for the shares of Purepoint Uranium of
.95 per share.

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My thoughts on the EResearch Report (investclub) are that it was not a rush job and time was put into gathering the info required "well put together and in a conservative light". They do put into the future factor situations that could affect an upward move to the price however they do leave out the main contributor to a price increase which is a discovery of a deposit which understandably is too difficult to gauge. Whereas a small hit would only have a 50 cent affect to the price a moderate to larger one could send the price anywheres from 75 cents to 2 dollars upward.

Now a good buy under 95 cents
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