Uranium surprise comingFont Size: Decrease Increase Print Page: Print Robin Bromby | June 01, 2009 Article from: The Australian
WITH all the reports of China stockpiling metals - copper, for example - it's surprising that speculators haven't been thinking about what would happen to prices of certain commodities if the stockpiling effort was extended to them.
Uranium, for example.
Warwick Grigor, in his latest client note out of BGF Equities, wonders out loud what would happen if China chose to begin stockpiling uranium for its rapidly expanding nuclear power sector. With uranium one of those markets that are already tight in terms of supply, and being a strategic mineral as well, uranium stands out to Grigor as the obvious market for investors to watch. If China were to make such a move, he writes, “then it would be smart to get set before it commences this strategy”.
China stockpiling uranium certainly would be a surprise but, on the local scene, investors might like to keep an eye out for the maiden resource estimate from the Firawa deposit in Guinea. It could be a wake-up call for those who have not been watching Forte Energy .
This stock has been trading around 11c or 12c in recent days.
As Murchison United, FTE was a bit of a flop in tin and subsequently had a copper disappointment in Portugal. Then it decided to search for uranium in West Africa, but not much notice was taken of that.
Well, that has changed, Last year French uranium giant Areva took a 15 per cent stake in the junior and brought with it an extensive database covering Mauritania.
While FTE plans to begin drilling in Mauritania next month, the immediate focus will be Guinea, with that resource figure due within three to four weeks. There have been delays in the assay process, but the company clearly has high hopes: the drilling campaign at Firawa in May 2007 identified a uranium zone extending more than 2km, and the resource drilling of that zone was completed last January. To flag the release weeks in advance suggests that FTE is expecting pretty good news.
The other news out of FTE today is that it will raise $10 million through two Sydney-based boutique brokerage firms at 10c a share.
In another development this morning, West Australian Metals is seeking to raise $9.9 million for its Marenica uranium project in Namibia. Last week this company said initial drilling had intercepted primary uranium mineralisation and that it was now planning a follow-up drilling campaign.
Uranium is starting to look hot.
The writer implies no investment recommendation and this report contains material that is speculative in nature. Investors should seek professional investment advice.
FTE Price at posting:
11.0¢ Sentiment: Hold Disclosure: Held
