bgf coverage 50c target nice

You may be wondering why UraniumSA shares put on 20 per cent this morning. No, it wasn't the Abbott/Bishop remarks, but we can tell you that BGF Equities sent out a “buy” note on this stock this morning to its clients. There will be good profits for anyone who can buy under 21c, the note said. The stock was at 21.5c when we last looked, so 0.05c is probably neither here nor there.

BGF has put a 2010 target of 50c on the stock. It urges investors not to be misled by the low grades at USA’s Eyre Peninsula deposit. This is offset by the low capital costs - the location is just 20km from Whyalla - and the ore body is just 50m below surface. This makes it amenable to (cheap because of its proximity to surface) in-situ leaching. It’s in South Australia, so political risk is low (we would say zero) and there are no Native Title issues.

BGF’s conclusion: “There is a clear disconnect between the current share price and market capitalisation of $19 million … It is way too cheap at current levels.”