news article

This came from Minesite.com A leading U.K mining website. Very Interesting reading.







July 31, 2007

Murchison United Stood Out From The Crowd Last Week





Last week, which was a poor one for most stocks, our London weekly round-up noted that ASX and AIM listed Murchison United went against the trend with its shares gaining 17 per cent to 6p after the company released an update covering its uranium exploration in Africa and copper exploration in Australia. The company has completed a 2000 metre drill programme at its Firawa prospect in Guinea and is expecting results shortly. It intends to drill the Bir En Nar prospect in Mauritania in the next couple of months. Murchison also announced that it has raised A$7.4 million through a placing. Whether these bits of news are enough to get a share price moving is a good question, but maybe investors were simply glad to hear from the company as there has been little hard news for a while. Chief executive Mark Reilly was in the States so could not give an opinion.
It is several years since we wrote about Murchison and at that time it had lost its long battle to acquire the Neves Corvo mine in southern Portugal and the cost of this, combined with closing out its US$82.5 million worth of Australian/US dollar contracts at a rate of 61.76 cents had left it in a parlous financial state. This hedging programme was entered into as part of the financing of the Renison tin mine and had long been a pain with the Australian dollar weakening. In the end the tin mine also had to go and the company has been able to focus on a new future involving an extensive portfolio of uranium projects in Guinea and Mauritania in West Africa, where it is pursuing intensive exploration programmes this year. Murchison also holds copper and cobalt interests in Queensland and Western Australia.

At the end of June a sixth uranium exploration licence was granted in Mauritania increasing the coverage to more than 8 200 sq kms , with two further applications being processed. During the June quarter Murchison completed its first drilling programme at the Firawa prospect in Guinea and planning for the next phase of exploration activity in Mauritania is now well advanced. The 2,050metre RC drilling at Firawa finished in May and samples were forwarded to Canada for multi-metal analytical processing, but the results have not yet been received. Another drilling programme will start at the Bohoduo prospect in Guinea, provided a rig can be obtained, when the wet season ends in 2 to 3 months time.

Murchison clearly had a busy time in the June quarter as a drilling programme was also prepared for one of the company’s licences in the Bir En Nar prospect in Mauritania. This country represents an attractive opportunity for Murchison, with large tracts of prospective exploration ground, including historic uranium prospects located within Reguibate Massive, a part of the West African Shield. Digital airborne data and processing of radiometric line data interpreted in Sweden has identified several strong uranium anomalies. Initial reconnaissance sampling of some of these anomalies has returned grades of up to 0.95% uranium. Negotiations are in progress to arrange access to a drill rig and it is anticipated that drilling will commence during the next 2 months.

Mark Reilly has shrewdly kept a foot on home territory with the company’s Australian interests but that is in keeping for an accountant who worked with Coopers & Lybrand in Perth before establishing a practice with Glenn Featherby who is now the chairman of Murchison. In that capacity they acted as administrator of the company's previous subsidiary Renison Bell Limited and clearly liked the potential of the listed relics. Attention to detail means that exploration budgets and work programmes have already been agreed with joint venture partner Aditya Birla Minerals for the Maroochydore copper project in Western Australia. An RC drilling programme has started which is in part designed to confirm the existing JORC resource which stands at a total of 51 million tonnes in the indicated and inferred categories at a grade of 1% copper and 0.04% cobalt for 0.51 million tonnes of contained copper and 20,000 tonnes contained cobalt, of which half is attributable to Murchison.

Drill rigs are scarce so it is difficult to forecast when this programme will be completed and after that some more drilling is planned to confirm the resource and provide samples for metallurgical testwork. This same proviso applies also to drilling planned for the Millenium leases north west of Cloncurry in north west Queensland. The five adjacent leases include the historical “Federal” copper mine and cover an area approximately 3.5 kilometres long and 500 metres wide extending in a northerly direction. Now that Murchison has sufficient money from the placing Mark Reilly wants to get moving there as well.