Uranium Equities Limited (UEQ): UEQ have two interesting...

Uranium Equities Limited (UEQ): UEQ have two interesting projects which have attracted large global partners. The first is the PhosEnergy process which seeks to extract uranium from phosphate (current global production of 100m tonnes of phosphate with 20m lb of contained uranium). The second is the Narbarlek Uranium Project which has an impressive past production record of 24m lb at 1.84% U308.

The PhosEnergy process combines conventional technologies in an innovative way to achieve high uranium recoveries (over 92%), at a low operating cost of $25-30 USD/lb, with reduced levels of waste. PhosEnergy is a new bolt on process designed for existing phosphate production facilities, without any material impact on the phosphate process. Over 5m lb of uranium was produced from phosphate in the 1980s however production ceased in the 1990s due to the high operating costs ($60 - $70 per lb) and low uranium price at that time. Given the expected increase in demand for Uranium over coming years, due to the increased number of nuclear power stations coming on line, the production of U308 from phosphates using this technology has the potential to deliver significant returns for shareholders. Cameco see enough potential in the process to fund ongoing development up to USD$16.5m plus a commitment to fund at least 50% of the first facility capital requirement. Discussions are underway regarding potential facilities and news can be expected on that front in the first quarter of 2010.

Narbarlek, the second project of interest, has also recently attracted a significant global partner, Mitsui of Japan, who have paid $2m for an option to acquire up to 25% of UEQs holding in the region for a minimum purchase price of $15m. The area has seen significant historical uranium production and the recent N147 discovery, located near the Narbarlek mine, with a peak value of 1544 ppm U308 should generate some interest once exploration gets underway in 2010.

UEQ also have several other uranium exploration projects which are joint ventured with Cameco, Vale and Intermet. With a cash of around $10m the company has the funds to undertake significant exploration programs on their properties in 2010.

With a market capitalization of just under $34m and an enterprise value of $24m there is clearly room for considerable upside this year.