We reiterate our BUY Rating and C$1.15/sh price target Today’s exploration results at Waterfound, 64% owned and operated by Orano but with a 12.9% UEX shareholding are indicative of a highly prospective 20km plus trend of unconformity deposits that includes Iso’s electrifying Hurricane Discovery, Cameco’s Larocque project, and now today’s unconformity style exploration results that included 3.9m @ 5.9% U3O8 and 9m @ 0.99% U3O8. For UEX, this highlights that i) excluding the implied value of Wheeler River and Millennium, UEX is trading at ~C$50m mcap, similar to early stage Athabasca explorers; 2) unlike the majority of new Athabasca juniors, UEX holds ground in the major trends and exploration camps in the eastern and western Athabasca, and 3) with >3,000km2 of exploration ground, UEX has 10x the exploration ground of a typical explorer in addition to better access to the prime Athabasca camps. We reiterate our BUY Rating and C$1.15/sh price target based on our unchanged SOTP in-situ valuation (C$9/lb for Millennium and Wheeler River, C$3/lb for Shea Creek, Christie Lake and Kiggavik and C$2/lb for other resources). Stepping back, we think there is significant opportunity to daylight value through JVs to increase the pace of exploration on the landholdings. The thesis for UEX is the company provides exposure to the best place to explore for uranium: The Eastern and Western Athabasca, at bargain basement entry cost and backstopped by the stakes in Wheeler River and Millennium. Orano drilling at Waterfound (13% UEX) hits 3.9m @ 5.9% U3O8, highlights undervalued UEX portfolio UEX highlighted exploration results from three holes drilled by Orano at the Waterfound JV property (62.4% Orano, 24.7% Denison, 12.9% UEX, respectively). Best hits included 9m @ 0.99% U3O8 from 474m, 3.9m @ 5.9% from 474m, and 5.3m @ 1.27% at Waterfound (62.4% Orano, 24.7% Denison, 12.9% UEX). The holes intercepted mineralisation 7m and 12m apart, respectively. The zone targeted is 700m E-NE along strike from the 1991 Alligator Zone discovery hole (10.5m @ 4.5% U3O8). The program was completed after six holes for 3,175m and drilling will resume in the summer field season. Figure 1. Waterfound River Project and Larocque Trend; Map of UEX/JCU projects in E Athabasca
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