http://watshot.com/shop/page-article/action-article.show/id-13000...

http://watshot.com/shop/page-article/action-article.show/id-130008536

Dated 25/10 but posted on their website today.

"There is talk that uranium could be next year's gold. An extra 147 nuclear plants are expected to come on line over the next decade, ensuring that demand outpaces supply for some time. Forte Energy is involved in uranium exploration in Guinea and Mauritania. Its shares have been on the back leg for around 18 months following political upheaval in Guinea and delays in processing information from its Mauritanian projects. However, the company is looking to return to the country to develop Firawa, an 11.6 million pound deposit, and there is now a local laboratory in Mauritania which Forte can use. French nuclear firm Areva owns an 11% stake in Forte and is likely to be interested in off-take agreements once Forte's projects move into production. At 5.1p the shares are a speculative buy.

Uranium: next year's gold?

The 1980s saw nuclear output more than treble, but during the decade to 2006 it rose by just 16%. However, the world seems on the cusp of a uranium renaissance as political leaders look to safeguard their countries' energy supplies against potential threats and mitigate the impact of higher oil and gas prices. Investing in nuclear power is also essential if we are to wean ourselves away from a carbon economy. The International Energy Agency says that if carbon emissions are to be cut by 50% within the next 40 years, we must invest a total of $342 billion in nuclear power during the next decade, a further $1.47 trillion between 2020 and 2030, and even more trillions in the following decade. There are currently 441 nuclear reactors operational worldwide, with 58 under construction, 152 planned and another 337 proposed, but no country except China expects to bring a new nuclear plant online before 2012. This suggests the potential for a price spike as countries rush to secure their supply of uranium.

Morgan Stanley already thinks uranium prices will average $52.25 a pound next year, 19% more than in 2010. Whilst there is plenty of near-term supply, demand growth is expected to outpace supply growth, so that the market is forecast to move into deficit within the next few years. With uranium currently trading at around $48 per pound it is nearly two thirds below its $136 peak before the financial crisis, suggesting plenty of scope for appreciation.

Guinea

Forte Energy holds four Uranium Prospecting Permits in the Republic of Guinea, West Africa, covering 847 square kilometers over two separate concession areas ? Firawa and Bohoduo. In 2009 the company announced a maiden resource estimate for its Firawa prospect of 11.6 million lbs of uranium oxide U3O8. Forte is now working to increase that figure substantially and, if all goes well, could be in production there by the end of 2011 or the start of 2012, using cash flow from that to fund work on increasing the resource estimate further. A pre-feasibility study is planned for 2011, which should give investors a better picture of the situation there. Forte has also confirmed the presence of uranium mineralisation at Bohoduo, and airborne geophysical data indicates a 12-kilometre long extension of the anomaly to the east. While the results of an initial drilling program carried out during 2008 were promising, Forte is currently focusing on its more advanced projects at Firawa and also in Mauritania.

Guinea is currently in the midst of a transition to democratic rule following the seizure of power by the military in 2008. The electoral run-off was delayed for the third time on Sunday 24th October, but both rival candidates appealed for calm and a government ban on demonstrations was observed by party supporters. The new president will no doubt be keen to exploit Guinea's vast mineral wealth and Forte now feels comfortable enough to move back into the country.

Mauritania

Forte Energy holds nine uranium exploration licences in the Republic of Mauritania, West Africa, covering 11,895 square kilometres, with more permits said to be on the way. The company disappointed the market earlier this year with a lower-than-expected 2 million pound resource at its Bin En Nar project*, but the market had been losing interest well before that due to the six months it took to get drilling samples processed. However, there?s now a local laboratory in Mauritania run by an Irish firm that claims it can do it in just a few weeks. With this in mind, the company has started a drilling programme at its A238 project which, it claims, has far greater potential than Bir En Nar. Initial results were "extremely encouraging", with drilling having intersected mineralisation with true depths of up to 60 metres - the highest to date of any prospect in Mauritania - and delineating an anomaly over 1.2 kilometres long and up to 100 metres wide. Exploration plans are being formulated now for additional drilling on this and other prospects in the region at the end of the Mauritania summer later in 2010. In the interim, we can look forward to the results from another five prospects.

* It should be noted that the Bin En Nar project was by no means the most important project in the firm's Mauritanian portfolio. It was simply chosen as the first drill target as it was the project that could be brought to resource status the soonest.

Conclusion

Forte has an exciting drilling programme ahead of it and there appears to be the potential for significant upside if the firm is able to reignite investor interest in the shares. French nuclear giant Areva has an 11% stake and is bound to offer an off-take agreement if Forte can prove up a decent resource base across its portfolio. It is also worth noting that Lady Barbara Judge, the Chairman of the UK Atomic Energy Authority, is the company's deputy chairman. Speculative buy. "