re: Ann: Further High Grade Uranium at Carley... Not that anyone...

re: Ann: Further High Grade Uranium at Carley... Not that anyone is particularly interested, given how many read this announcement:

U is on the nose but for those with risk appetite and who can hold for a couple of years the investment argument is worth a look as upside can truly be massive:

Pros

Share price is 40% below the SI cap raise in June
Good capital structure for investors
Company is vastly undervalued on a lb resource v market cap basis compared with local peers
Plenty of land development options
Main project resource just keeps getting bigger and may end up too big to ignore
Impressive technical background of management
Has about $4 million cash at end of September so trading close to cash backing
Planned production timeline will coincide with predicted world shortage of U for existing reactors (if Inteswisse report is to be believed)
Government desperate need for cash (from royalties) may eventually overcome any green resistance to U mining
Large promoters, Bell Potter and Interswisse will keep talking it up and obviously chasing the next cap raising and the big cap-ex one if they enter production.

Cons

U will probably still be on the nose next year when a working capital cap raise will be necessary – I reckon at least $5million will be needed (at maybe a lower price than the last one) and then again the same the year after unless it just marks time and sits on the resource.
Maybe too many projects to service for a minnow and virtually no chance of offloading any of them in the current climate.
Management highly skilled, can easily find other work and may not want to tough it out for a couple of years till the market for U turns
Big chunk of shares coming out of escrow in a couple of months

Italy
IMO a very long shot as local opposition was evident in 2006 and will only be stronger this time around.

WA
Change of government at the next election could kill the projects

SA
Still to conduct drill program in South Australia - but promising ground

Overall – worth a punt and have taken a small position to stick in the bottom drawer for a couple of years.