Uranium hunters on the moveGarimpeiro / Barry FitzGeraldMay 11,...

Uranium hunters on the move
Garimpeiro / Barry FitzGerald
May 11, 2009

URANIUM explorers have been stellar performers since February-March.

Sure they have only been recapturing some of the huge share price losses suffered in the global equities meltdown that got going last September, as well as the losses that came with uranium's price retreat from the record levels of June 2007.

But the strength of the uranium hunters is such that they have been making the rest of the exploration sector positively tardy.

It is not as if the uranium price has taken off. At about $US44 a pound in the spot market and $US75 a pound for long-term contracts, uranium remains well short of that June 2007 record of $US138 a pound.

The explanation for the new chase for uranium explorers looks to rest in the very thing that drove uranium to $US138 a pound in the first place.

And that is that new supplies of the radioactive stuff are required if demand created for new mine supplies by the forecast boom in near-zero emissions nuclear power generation is to be met.

It seems punters in the uranium explorers believe the push for an increasingly carbon constrained world has not been halted by the economic malaise.
Botswana plays

Take A-Cap Resources, a uranium explorer in Botswana.

Since March the stock has more than tripled to the 37c a share posted on Friday, giving it a market cap of $60 million.

Apart from the recent general rush back to uranium explorers, A-Cap has benefited from the emergence of a Canadian uranium entrepreneur, Stephen Dattels, as a major shareholder through his London-listed Polo Resources.

Dattels is best known as the founder of the African uranium explorer UraMin, which was bought by the French nuclear giant Areva for $US2.5 billion ($3.3 billion) in 2007. UraMin had 170 million pounds of uranium under its belt at the time, and plenty of exploration upside.

Through Polo, Dattels is looking for a repeat performance. The group has been busy assembling key stakes in uranium explorers which might fit the bill.

Polo has just taken a 19.9 per cent stake in A-Cap through a $10 million placement of shares at 20c a share, lifting A-Cap's cash to about $15 million.

Before the A-Cap move Polo took up strategic stakes in the ASX-listed Berkeley Resources (uranium/Spain) and Caledon Resources (coal/Queensland), and an interest in Extract Resources (uranium/Namibia).

Extract owns the South Rossing uranium project that, as its name suggests, is south of Rio Tinto's Rossing mine. Polo's move on to Extract's register comes as Rio plots to acquire control of the southern deposits by building its presence on the register of Extract's biggest shareholder, London-listed Kalahari.

So A-Cap, based in sleepy suburban Hawthorn, is all of a sudden right in the thick of things when it comes to the global.

That is thanks to its ownership of the Letlhakane project in north-western Botswana. It is a low-grade deposit of about 100 million pounds and has plenty of exploration upside. As it now stands, its uranium is being valued at US45c a pound in the ground, hence Polo's interest.
Right addresses

Expect to hear more in the year ahead from a new uranium exploration company, the privately held Raisama Resources.

Backed by Emerald Partners and Chris Reindler, a veteran Perth explorer, it was founded in February last year to acquire uranium projects with the right sort of addresses in Western Australia, since declared to be open to uranium hunters.

Emerald has arranged the equity funding for Raisama, allowing it to pursue its exploration on a private basis.

Raisama and its private backers have already spent $1.5 million and have commitments for another $5 million to $7 million. That gives it an exploration budget that would shame many of the listed uranium explorers. Mind you, if this developing bull market in uranium explorers continues, you would have to wonder how long Raisama stays private.

Raisama's first project, Sunday Creek, is adjacent to the Kintyre deposit, recently sold by Rio Tinto to Cameco and Mitsubishi for $US500 million. Raisama also has uranium in Kyrgyzstan and New Mexico in its sights.