Gidday test monkies---this is my latest FREE Uranium sector...

Gidday test monkies---

this is my latest FREE Uranium sector review report...

enjoy...JH

PS: Get other FREE Uranium company reports from http://www.rcresearch.com.au/documents

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RISK VS REWARD – PART II

Last time we looked at uranium companies projects and assessed their approximate time to production, drill programmes and preliminary results. In this second performance review we look at a little deeper at drills results, uranium deposit sizes, grades, current market cap and a reality check on time to production. A good uranium deposit in my view should have at least 5000 tonnes with a grade of at least .07pc. The market cap (in general) should not exceed 20 million, while above 50 mill really needs to really be justified more by a good sized deposit with good grades and closeness to production.

1 tonne = 2204 pounds

LOW RISK INTERNATIONAL PROJECTS

Africa
AEX - Proven resource which could be expanded. Imminent drill results due. Low political risk in South Africa. Market cap 28 mill. 11,025t @ a grade of 2.5.
GBE – Malawi and Argentina. Not far from PDN in Malawi. Drilling in the next few months. Market cap 11 mill. Early exploration grades of .73% & rock chips to .2%. Possible 30,000t in Argentina.
EXT – Namibia project with a 51% project interest. Encouraging drill results indicating a sizable U deposit. Market cap 52 mill. Encountering sizeable grades from drilling between .089 and 2.316.
EQN – Positioned to produce by-product uranium from its copper project in Zambia by 2008. Market cap 869 mill. 10,000t of U308. Production late 2007.
OMC - OmegaCorp is rapidly advancing in Zambia. Market cap 91 mill. Three projects. Zambia has 5000t with grades from .067 to 3.4.
EVE – Been drilling and discovered a resource in Zambia. Market cap 15 mill. 2200t. Grade is .4. Resource may be upgraded with further drilling.
BMN – Mainly Namibia near PDN and Botswana plus WA. Progressing drilling with promising historical intersections and anticipated grades from .02 to 1.2. Market cap 65 mill.
WME – Main project in Namibia with tenements in WA. Completed a promising surface sampling program in Sep 06. Market cap 30 mill. Surface level grades of .048.

Spain
BKY - Berkeley Resources signed an strategic alliance with AREVA in Spain. The world’s leading end to end uranium explorer and producer. Market cap 60 mill. Targeting 5000 tonnes in a grade range of .06-.07

US
UKL - Two main projects in Rio Puerco in New Mexico and in Nevada. Inferred resource 2772 tonnes. Market cap 11 mill. Grades from .07 to .12.

POLITICAL RISK IN AUSTRALIA

S.A. - lowest political risk
TOE – Toro Energy – JV with Stellar. Great tenements in SA and have been drilling. Best results to date are grades of .0271. Market cap 52 mill.
RPT – Redport- exploring near Olympic Dam. Being targeted by Canada's Mega Uranium. Market cap 84 mill. Resource size 10,747t with a grade of .086. Will receive a cash royalty from PDN Langer production.
CUY – Curnamona Energy – Acreage near Honeymoon. Drilling results are encouraging with grades averaging .135. Market cap 18 mill.
MXR – Good tenements but at this. Market cap 6 mill. Previous exploration indicated a .043 grade resource at a depth of 2.1 metres.
NEL – Nova – Great prospect next to Beverly. Market cap 26 mill. Inferred resource at 8983t @ .058 with the latest drill results ranging from .82 to 1.2. Drilling to be completed by mid Nov 06.
PNN – Pepinnini has 15 tenements in QLD and SA alone plus a significant MOU (60%) just signed with China's Sinosteel in PNN advanced crocker well project. Market cap 21 mill. Inferred U deposit at Crcoker well 6700t @ .05. Mt Victoria contains an Inferred JORC compliant resource of 250,000 tonnes @ 0.16. Very high grade surface samples (up to 21kgs/tonne U3O8) from newly discovered Becaroo Prospect
MTN – Advanced project with highly prospective drill results. Hong Kong's Crosby Capital has bid for Marathon Resources. Market cap 29 mill. Paralana – 33,200t @ .06. Owns 7% of USA and is a JV partner.
AGS – Beverley 4 mile project - rough calculations have the uranium find at 7-11 Billion dollars inground. AGS have a 25% share. Market cap 207 mill. High grade ranges from .05 to 2.1.
SRZ - Stellar Resources. Two projects in WA. JV with Toro. JV with UraniumSA. Explorer status. Market cap 18 mill.
CUY – Encouraging drill results. Market cap 18 mill. Grades .03 averaging to .135 from more promising drill results.
UXA – Commenced major drilling programme across five of seven of its its well positioned and prospective SA tenements with completion targeted for mid Nov 06. Market cap 17 mill.

NT- 2nd lowest risk
ERA – A buy late 06 if drilling results look good. Long-term fixed contracts signed in 1998 restrict benefits from U price increases. Market cap 2,565 mill. Drilling a number of prospective targets around Ranger with results due towards the end of 06.
CMR – Compass Resources – Exploring highly prospective Rum Jungle. Site of 1st Aus U Mine. Market cap 499 mill. 4000T @ 1.01.
DYL – Completed drill results in NT confirm good expectations. JORC inferred resource statement to follow . Recently acquired 5 tenements (one near PDN) in Namibia with estimated resources of 18,000t @ avg. grade of .0263. Market cap 107 mill.

QLD - 3rd lowest – resistance at state level
SMM – QLD. Controls over 34,000t across Mt Isa tenements. Market cap 355 mill. Better off with a new partner in PDN for its 50% stake at Valhalla, which has 25,000t @ a grade of .14. Also has 50% interest in Skal, which has 5,000t @ .12. JORC statement coming for 100% owned Bikini tenement, which has good prelimary grades of .07-.14. JORC statement also coming for 100% Tjilpa, which has grades of .12-.15. More drilling required for 100% Warwai, which has grades of .14-.24. Has 15 other tenement prospects.

WA – 4th for low risk. Strong resistance at State level
UTO – U308 – Market cap 26 mill. Advanced Dawson well project in WA primary focus for drilling. Good preliminary results indicating a grade between .03 and .10. 15 Tenements Aus wide. 4 WA, 4 QLD.
EME – Market cap 31 mill. Recent drilling detected uranium intercepts at Lake Mason in WA from .024 grades to .0417. 5 Projects in WA. 2 in the NT. JV with VUL.

Uranium R&D – outside the realm
SLX – Sensational technology and a massive cash burner given R&D expenses and research exposure to optmise the energy efficiency of uranium extraction and power generation. If AUS really gets underway this will be the CSIRO of Uranium in Austtalia and will no dount collect and charge a hefty fee. SLX has successfully gained GE to commercialise its innovative uranium enrichment process.

New prospects off to a good start –
USA – UraniumSA – Lists today. Government-run CNNC controls much of China's nuclear industry. Mr Xu, based in Beijing, has taken a seat on the board of UraniumSA but does not have a stake in the company at this time. UraniumSA, which has 17 uranium exploration licences in the highly prospective Gawler Craton and is a JV partner with MTN.
UOG – Uranium oil and gas. Unlisted.
ERO - Eromanga Uranium – Unlisted.

PERFORMANCE ANALYSIS

Performance dated from China announcement to track hot air effect
Code From @ 23.09.06 @ 16.10.06
AEX 04.04.06 22.73% 22.73%
BKY 04.04.06 -1.16% -3.49%
CUY 04.04.06 -38.52% -11.11%
DYL 04.04.06 -21.88% 6.25%
EME 04.04.06 -12.56% -7.21%
EQN 04.04.06 -15.01% 5.26%
EXT 04.04.06 -44.62% -48.46%
MTN 04.04.06 -44.64% -46.43%
MXR 04.04.06 -40.48% -21.43%
NEL 04.04.06 -30.56% -6.67%
OMC 04.04.06 9.43% 22.64%
PNN 04.04.06 37.08% 52.81%
RPT 04.04.06 3.7% 11.11%
SMM 04.04.06 12.5% 36.36%
SRZ 04.04.06 -46.81% -32.98%
TOE 04.04.06 -54.69% -43.75%
UXA 04.04.06 -30.85% -8.51%

Recent listings
UTO 10.07.06 5.00% 25.00%

New additions to watch that are on the move
AGS 12.09.06 15.15% 36.36%
BMN 19.09.06 -1.67% -15.00%
CMR 19.09.06 3.33% -10.22%
EVE 19.09.06 -4.76% -4.76%
GBE 30.09.06 -% -34.91%
UKL 19.09.06 4.05% 8.11%
WME 19.09.06 14.29% 10.71%

Sector picks in order of preference with project status and risk considered
23.09.2006 – BHP, PDN, AEX, EXT, EQN, UKL, AGS, PNN, OMC, MTN, WME, CMR, DYL, RPT, CMR, SMM.
16.10.2006 – BHP, PDN, AEX, EQN, OMC, AGS, PNN, MTN, RPT, NEL, CMR, SMM, CUY, DYL, ERA, USA.

Investment strategy
Build overweight positions in rank 1 on a downsliding scale to include the top 5 with a view to attaining the top 10. Rotate on performance and project progress.

Research note from the author
This is a quick snapshot of ASX listed companies in the Uranium mining and exploration industry. Due to time restraints and the sheer size and number of prospective companies, full analysis and due diligence is limited and only contains information known to be publicly and widely available to date. Some companies not ranked well may perform better or announce pertinent information in the future that has been unavailable for review to date. Jeremy Hamann 16th October, 2006.

*Disclosure
The author owns shares in BHP, PDN, AGS and AEX.