Seeking Alpha on Ucore's latest Recovery Process Study!!
Summary
- Ucore provided an update on the research being done to maximize recoveries of HREEs at its Bokan Project in Alaska.
- While this sounds positive, I think investors should note that it implies a delay of the company's PFS, which I anticipated would come out in the fourth quarter.
- The potential for increased recoveries and increased efficiencies is clearly a positive, although we have yet to see the final results of the study.
- The stock is trading around the "buy" level that I have emphasized at around $0.20-$0.25/share, and Ucore shares remain a compelling speculative "buy" with multi-bagger potential.
Ucore (OTCQX:UURAF) recently announced some updates regarding the research it is currently conducting at the University of Alaska Fairbanks. This research - led by Dr. Rajive Ganguli who is head of the Dept. of Mining and Geological Engineering and in part funded by the State of Alaska - is to improve the recovery rate and the overall efficiency of the recovery process from the ore at Ucore's Bokan Project in Alaska.
Thus far the research has yet to yield conclusive results as Dr. Ganguli tries to maximize recoveries using different kinds and concentrations of acid, and management anticipates that the results will be reached in the fourth quarter.
This is a very timely press release, as my July article prompted several readers to ask questions regarding metallurgy and processing to management. The issue at hand is that while Ucore has substantial HREE mineralization, most of this is not in the form of xenotime (although some is), which is the one HREE mineral that the industry has ample knowledge of when it comes to processing. The concern is that Ucore has yet to prove to the investment community that it can extract HREEs economically from these esoteric minerals, and that its processing costs might be far greater than initially anticipated in the PEA.
So the good news is that Ucore is responding to these concerns. However, this press release essentially says "we're working on it and we'll have an answer for you in a couple of months," which is fair, but lacking in substantive information.
With this going on and with HREE prices continuing to fall, Ucore shares have fallen back down to their long-term support level in the mid-$0.20's/share range, although unlike most of the industry, Ucore shares have not made a new low for the bear market, which is positive. As management answers these questions (and I will be releasing a more detailed article in which I recap and analyze my conversation with management regarding these issues), those investors who believe in the HREE story will decide whether Ucore is a horse they want to bet on. Given these uncertainties I think the stock remains speculative, but given the potential value of Ucore shares in the event of positive metallurgical and processing results, I think this is a bet worth making, especially given the company's potential access to financing which sets it apart from the rest of the industry.
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