Most investors read a company’s news releases, but don’t read in between the lines to understand in which direction the business is heading. Also often, a business tries to say anything within the headline along with the initial paragraph. Why? Simply because they know, as we do, that most investors scan the headline, a number of sentences and perhaps take a look at some drill intercepts or important technical information (which handful of really comprehend). Then, the investor looks at how the share value reacts to the news, rejoicing or complaining on a stock chat board. Frequently, crucial phrases or sentences are buried inside the release, occasionally near the bottom. These may possibly provide you with a clue as to what’s genuinely happening using the company.
We pulled up some recent news releases of many uranium firms we have been following to help investors read between the lines. Only a keen, ruthless appraisal of each and every news release, or even a series of their news releases, could give you an accurate interpretation of how effectively the business is carrying out. Hopefully, the guidance which follows could help you much better understand what exactly is actually going with a company’s plans.
Northwestern Mineral Ventures (TSX-V: NWT; OTCBB: NWTMF) announced on Thursday the completion of its airborne survey. It also announced multiple prospective uranium targets in the country of Niger (Africa). Reading an earlier interview we conducted with Dr. John North, a director of this firm, he told us, “There appear to become no scarcity of drill targets on the concessions.” So what was the big news? The CEO announced they had “identified numerous near-surface targets with significant uranium mineralization prospective.” That wasn’t the news. Not even close. They already knew that!
The firm covered 24,000 line kilometers, more than 14,000 miles. Their initial pass-through was cherry picking. The true news was buried within the third paragraph, “…a second airborne survey to further delineate areas with sturdy uranium potential is expected to commence in the summer.” That ought to choose out the strongest targets for drilling at a later phase of the company’s exploration. That line also told us they had quite encouraging news. When the second airborne confirms strong uranium prospective, raising cash to push the project by means of into drilling and advanced exploration will come more effortlessly.
Forsys Metals Corp (TSX: FSY) announced on May possibly 28th a brand new “detailed drilling” system on the company’s Valencia uranium deposit in Namibia (Africa). Closely spaced reverse circulation drilling will help add more “measured” resource for the company’s feasibility study. Increasing the measured resource will make it less complicated for the organization to raise the cash to create a uranium mine or sell its deposit to a significant firm. Sounds good, but a news post Forsys Metals posted on its website was of higher interest to us.
A significant hurdle in additional creating the low grade uranium deposits in Namibia is water. These projects are within a desert. You will need water, plenty of it, to mine. On Could 26th, The Namibian newspaper ran a really encouraging report - excellent news not only for the Rossing mine, but additionally for Forsys Metals and UraMin (which also hopes to start mining uranium in Namibia). What was the news? At a breakfast meeting on water conservation and management hosted by the Namibia Financial Society (NES) on Wednesday, NamWater CEO Vaino Shivute, announced, “The desalination plant is back on the table. We’re searching into it again the way to restart it, examine the problems from the past and learn from that.” With the water concern on its method to a achievable resolution, we expect stronger interest in Namibia.
Energy Metals Corporation (TSX: EMC.TO) announced it would commence trading on the Toronto Stock Exchange on Thursday. EMC Chief Executive Paul Matysek’s quote spelled it out,? that due to this it would be achievable for “… the Business to reach a broader base of individual investors, mutual funds and institutional investors.” In other words, there will be less dependence upon the retail investor, and more reliance on the large funds to pile into EMC shares. Needless to say, the tiny guy will join the party as well.
UR-Energy Inc (TSX: URE.TO) issued a series of news releases between June 5th and Thursday, announcing quite a few significant developments. First, they confirmed their uranium resources on their two principal properties, Lost Creek and Lost Soldier, in Wyoming, by filing National Instrument 43-101 documents. Both resources were larger than the historical resource estimates. Second, the business confirmed the leachability of uranium on its Lost Soldier property.
Why is that critical? Without having the potential to leach the uranium through an In Situ Recovery project, the organization would have already been forced to raise the funds to get a far much more costly open pit operation. In an earlier interview, Chief Executive Bill Boberg told us the permeability could be a “go, no-go” consideration on the project. It appears it is a go. Thursday’s news release confirmed that, but buried within the bottom in the news release was a more telling news item. The firm is conducting environmental, hydrologic and engineering research to “generate baseline information.”
Throughout the course of our study in Wyoming, we discovered a organization ought to offer at least one year of baseline data before it might submit its application to get a permit to mine in that state. The other piece of data within the news release showed UR-Energy has been working on this and expected to submit its application by mid 2007. In other words, the firm is rapidly moving forward to establish its In Situ Recovery operation.
Uranerz Energy (OTC BB: URNZ) issued a few telling news releases, which might clarify the direction in which they are heading. On June 5th, the organization announced a brand new Chief Monetary Officer. URNZ also announced it had closed a financing, bumping up their cash to just below $12 million. URNZ Chief Executive Glenn Catchpole told us he hoped to launch his very first In Situ Recovery operation for about, or much less than, $10 million. This is a great sign. But, it was the next day’s news release which confirmed the earlier news and reinforced exactly where the organization is going. The organization announced the appointment of three independent directors to its Board. All three were appointed to the audit committee. Two are accountants with impressive track records; the third has an MBA from the University of Western Ontario, one of North America’s top MBA schools. How do we interpret this news release? URNZ most likely plans to move from the lowly more than the counter bulletin board to a a lot more senior exchange: Amex or NASDAQ Modest Cap would be our guess.
What do you do about a organization that hasn’t been issuing a flurry of news releases? Take Strathmore Minerals (TSX: STM; Other OTC: STHJF) as an example. You’ll find developments, but the news stream has been fairly quiet. Have they come to a standstill? No, very the opposite is true.
We did what any investor ought to usually do in the absence of key news. We picked up the phone and referred to as their investor relations department. Throughout a short chat with Craig Christy, the company’s spokesman, we asked in regards to the company’s money scenario. He responded, “We have about C$0.55/share in cash.” According to Thursday’s closing cost, that comes to more than 30 percent of what the market place is valuing STM. That is UP from C$0.37/share earlier this year. STM has plenty of money and is in outstanding economic shape.
We looked by means of our copy from the Hargreave Hale Report, entitled, “Too Hot to Handle or just Warming up?” This can be a leading British financial institution, based in London. They may be a significant shareholder in STM, and they have been recommending STM shares. On page 32 of their document, we reviewed a terrific monetary evaluation of 33 Canadian and Australian uranium producers and development firms. The bar chart depicted the Uranium Enterprise Value (UREV) per Risk Adjusted pound of U3O8 Reserves and Resources of those thirty-three businesses. A horizontal line crossed the chart, showing “fair value” of about US$4 million for each company’s UREV per pound adjusted.
It was fascinating to study how STM stacked up against several of the most well-liked uranium companies. Companies, including Mega Uranium (TSX: MGA) rated at about US$28 million - about 700 percent ABOVE the Hargreave Hale “fair value” evaluation. Crosshair Exploration and Mining traded about 500 percent of its fair value. UEX scored about twice above its fair value. Firms including Uranium Resources, Western Prospector, Paladin Resources and UrAsia Power scored at or quite close to their fair value. Strathmore Minerals had the lowest fair value rating - an absolute steal at about 30 percent of its fair value. About 16 companies traded above their fair value, some very significantly above the Hargreave Hale fair value evaluation. It was enlightening to find Strathmore was within the organization of producers for example ERA of Australia, IUC, Uranium One and Denison as an undervalued uranium company. In this case, it was one of the most undervalued of all 33 firms analyzed by the City of London financial institution.
We also discovered out that, per week ago, Strathmore Minerals president David Miller presented in the invitation-only Raymond James In-Situ Leach Uranium Mini-Conference in Toronto and Montreal on June 7th and 8th. You may go to the Raymond James site for the webcast of David Miller’s presentation, however it has restricted access. Other people presenting were Uranium Resources and Energy Metals. We were fortunate to assessment David Miller’s PowerPoint presentation. One word describes Miller’s presentation: Wow! It genuinely did pack a punch. We heard Raymond James may possibly be releasing these presentations to the public inside the near future.
Occasionally, when there is a lack of news, one can learn to dig around and discover a company could be undertaking quite effectively. In other situations, one can study the news releases and attempt piecing together exactly where the company is heading. We hope this guidance assists you turn out to be a more sophisticated investor. We neither advise stocks nor give purchasing and selling advice. As constantly, speculating on all-natural resource companies can be extremely risky and suitable only for specific investors. One should constantly check with their registered economic advisor about what is suitable or not for one’s investment choices.