unusual spike in share price and high volume, page-15

Happydayz

I think you have misread my post. At the end of my post I stated that I would be hanging on to my shares very tightly as I am expecting a re-rating of the share price upwards in the short to medium term (At least 60 cents by Dec 09 for reasons I have mentioned before).

Because of the crash in the sharemarket, I have taken the opportunity to average down my holdings and have purchased Deep Yellow 21 times since the crash began. The highest price I paid was 48 cents and the lowest 10.5 cents. Deep Yellow is by far the largest holding in my portfolio.

I analyse stocks using a combination of fundamental, technical and insider analysis. I would classify myself more as a long term investor rather than a trader.

While I do hope the share price for Deep Yellow does fall to 22 cents as you have mentioned so I can buy more, I personally doubt it will happen unless world financial markets start crashing again. But then again... you never know. The Sharemarket has surprised even the so called experts and professional investors since the crisis began.

The current price of 32 cents IMO is still reasonable and I would buy more if I wasn't already so overweight in DYL shares and had some spare cash.

I will give you an example of why I believe that the current price of 32 cents is still reasonable using insider analysis.

On 19 December 2007, an announcement was released regarding the discovery of an iron/ magnetite outcrop (INCA/ INCA Deeps) which could have potentially great significance.

On 9 January 2008, Deep Yellow announced early success at Inca with preliminary uranium assays released and stated more drilling would be required to understand the discovery.

On 22 January 2008, it was announced that preliminary assays confirmed more uranium mineralisation. It was also stated that 2 additional drill holes would be done commencing in late January 2008.

On 31 January 2008, Dr Leon Pretorius acquires 3.3 million shares at approx. 29 cents ($1million)

On 5 February 2008, Dr Leon Pretorius buys another 4.3 million shares at approx. 32 cents ($1.35million)

Dr Leon is a geochemist with 36 years exploration and mining industry experience with 18 years in uranium experience. He has both MSc and PhD research degrees on uranium exploration geology and deposit chemistry and was integral in discovering Langer Heinrich and contributed significantly to the success of Paladin resources.

This is once again just my opinion and purely speculative, but I find it hard to believe that someone with Dr Leon's knowledge and experience would dump $2.35million of his own hard earned money unless he was reasonably impressed with the results he was analysing from INCA in Jan 08. And true enough... in May 09, the high grade INCA/ INCA Deeps results are released to the market. Well done Dr Leon. Don't forget as well that Inca is only one of the many projects that Deep Yellow are working on and some other projects seem extremely exciting as well based on results released to date.

Dr Leon however isn't perfect and obviously didn't expect the share markets and uranium price to continue crashing subsequent to his share purchase.

Nevertheless, Dr Leon obviously thought 32 cents was still a bargain based on what he saw at INCA in Feb 08. FYI the uranium price had already crashed to $80/lb in Feb 08. Whilst it is only $51/lb today, nearly all uranium sales are based on the long term contract price which is currently $69/lb.

What's the current price of Deep Yellow?