importance of timing for uau, and 2 gold ipos

Dear Korab and UAU Share holders

Firstly, thank you, Socrates44 for following up the UAU progress and providing his view point on the timing of UAU IPO via his statements (refer post no. 5184629):

* I would not now expect any road shows or IPOs for 4-6 months at the earliest, until the iron mineralisation is confirmed and

* IMO, the iron mineralisation discovery could delay the UAU float, depending on its size

My view points are as follows:

I am quite comfortable to wait till the market condition improve and get institutions support before UAU listing. I am not sure UAU directors will wait till iron ore mineralisation is confirmed (no official announcement yet). IMHO, it is better to get the money first from IPO then to wait for confirmation of iron mineralisation unless the wait is very short say less than 1 or 2 month (max). If UAU miss the opportunity to get fund from IPO, even the mineralisation is fantastic (eg as a minimum, the grade of iron ore is more than 50% with low impurity, the tonnage is more than 50 to 100 MT), UAU may find it is hard to raise capital (if there is another GFC or US/UK and PIGS debt crisis become bigger).

By the way, KOR just missed by 4 months in 2007 to float the UAU before GFC (Global Financial Crisis) came in and the Uranium prices started to come down from its peak of US$145/lb. During the recent uranium bull market, KOR share price has reached more than $1 a number of times and peaked a few times also at A$1.35 between March and April 2007. The proposed listing of UAU was at the end of August/early September 2007. In July 2007, they have done road shows in UK, North America and Australia and KOR share holders have two opportunities (ex- entitlement date and record dates have specified) for having priority / entitlement of the float (A$20 to 30M). After referring to the IPO Deal Sheet for Sophisticated Investors/ institution and discussion notes with BBY corporate, I should remind myself and learn that the importance of right timing is so crucial and the impacts of mistiming by mere 3 months is so huge (KOR has to do a 1 for 2 right issue at 7c in April 2008, SPP in September 2009, UAU has missed to get between A$20M to A$30M from the IPO, to name a few negative impacts).

Another example of the importance of timing is the latest Uranium IPO in 2009, EMX (Energia Minerals), a spin off from CNX and was listed on Thursday 24 December 2009, following the successful completion of its IPO which raised about $7.5M (39.5M shares at 20c) and was oversubscribed. The offer was widely supported by Carbon Energy Ltd (ASX:CNX) shareholders, who accounted for 85% of the offering and CNX will retains 42% equity in EMX. Bank of New York Mellon Corps applied for 5 M shares and got scale back to 3.5M shares and a substantial holder with 5.04% (ASX announcement 13 /01/10).. If the ipo was delayed by 1 or 2 months, do people think the IPO will still be possible?

Anyway, some observations for pondering and optimism:

* Uranium stocks are improving from its low despite the low uranium spot price (about US$ 42.5/lb)

* Commodities funds saw positive flows each month from the beginning of March 2009 through February 2010. For more details, refer to http://www.marketwatch.com/story/one-market-sector-still-draws-stock-fund-investors-2010-03-24?dist=afterbell


* EMX has successfully raised A$7.5M in December 2009 and UAU intend to raise only A$11M. Bank of New York Mellon Corps applied for 5 M shares for EMX and got scale back to 3.5M shares and is a substantial holder with 5.04%.

* Some traders/investors still have appetite on some small uranium stocks. For example, Yesterday (23/3/10), OKU (Oklo Uranium) announced OKU to Acquire Highly Prospective Namibian Uranium Project , it has the record volumes of about 12.39 million (about 8.5% of the issued shares of 145 m)and open price =6.8c, highest=11.5c, lowest=6.8c and close =7.5c.


* The Australian market (XJO/XAO indexes) has recovered the 9% correction in Feb 2010 this year. Yesterday (23/3/2010), the DOW is 18 months high. Everyone should also remember the risk and possibility of double dip recession in US and UK and the PIGS/European debt issues.

* The importance of timing will also apply to the pending Bobrikovo /Lugansk and Melrose IPOs

* Hopefully KOR directors with 37% share holding can remember the lesson of 2007 and pay attention to the importance of timing for IPOs and make the right decision for share holders.



As always DYOR. Different share holders have different strategies in their time horizon for investment/trading, profit/stop loss target, risk profiles, financial needs, etc. The final decision is for them to make.