Uranium SA (ASX:USA)
USA has been trending strongly upwards over the last week on expectations of a significant increase in their Uranium resources to be announced this week.
USA have announced exceptional drilling results over the past 6 months and look to have made one of the best uranium discoveries in recent years. While much more develpment work needs to be done, USA looks like having a potentially very profitable mining scenario.
I will post more on USA later, however see below comment fom BGF Equities on 17/7/10 (note: the share price was lower when this was issued):
Valuation Notes:
• The first point is that a market capitalisation of $18m, USA is very cheap.
• If the target of 20,000 t eU3O8 (44 mill. lb) is achieved by year end, the stock has the
potential to increase 2-4x, based on the following measures;
• Assume US$1.00/lb of resources = A$52m or 47¢ a share
• Valmin - 3% of in-situ value, at U$41/lb = A$63m or 56¢ a share
- But as we know, spot is unrealistically low, so if you use the long
term price of US$60/lb, it is A$93m or 83¢ a share
• We expect that the share price will move higher to close the gap between the current
price of 18¢ and the various valuation figures as the news flow gives us the next
resource upgrade, more drill results, and as it closes in on the 20,000 t resource figure.
More Info:
http://www.uraniumsa.com.au/html/presentations.htm
http://www.brr.com.au/asx/USA/uraniumsa-limited/
