london broker update- matrix

Resource potential becoming clearer, but greater potential at Bir Mogrein



Forte Energy continues to suffer delays in the receipt of its assay results from the first phase of drilling at its Bin En Nar uranium project in Mauritania. However, in the meantime it has released the interpreted sections based on geology and scintellomter readings. This data give us comfort that a resource has probably been defined here, and simply awaits formalisation. We estimate this drilling presents the possibility of up to 10Mlbs having already been defined we risk this by 50% and thus apply 5Mlbs to our estimate of the company's resource base for a total of 25Mlbs, as such, we increase our price target to 17p.

Forte Energy continues to experience delays in receiving assay results from its contract laboratory in Canada. Drill samples from Bin En Nar have now been with the lab for several months under normal circumstances, expected turnaround time would be weeks rather than months; however, in this instance the lab is performing poorly. Unfortunately, this delay is beyond the companys control; the timetable is entirely in the hands of the lab and they are unable to provide an estimate as to when results may be forthcoming.

Some 45 holes are now with the lab; generally such a delay would leave the company little option but to wait, however uranium is somewhat different these are high grade veins that are clearly visible, and the samples are obviously radioactive. Measurements can be taken in the field that, in some circumstances, can give rough estimates of grade; however this is inexact, and the company has not released the numbers, other than to say previously that radiometric readings indicate that the assay grades should be in line with the previous high grade results obtained in the last phase of drilling by Areva.

While the assay estimates are not available, the radiometric results do provide important geological information on the location, thickness and dip of the veins, which in this sort of environment is useful.