Most investors read a company’s news releases, but don’t read between the lines to understand in which direction the company is heading. Too often, a company tries to say everything in the headline and the first paragraph. Why? Because they know, as we do, that most investors scan the headline, a few sentences and perhaps look at some drill intercepts or key technical data (which few really understand). Then, the investor looks at how the share price reacts to the news, rejoicing or complaining on a stock chat board. Often, key phrases or sentences are buried inside the release, sometimes near the bottom. These may give you a clue as to what is really happening with the company.
We pulled up some recent news releases of several uranium companies we have been following to help investors read between the lines. Only a keen, ruthless appraisal of each news release, or a series of their news releases, could give you an accurate interpretation of how well the company is doing. Hopefully, the guidance which follows may help you better understand what is really going with a company’s plans.
Northwestern Mineral Ventures (TSX-V: NWT; OTCBB: NWTMF) announced on Thursday the completion of its airborne survey. It also announced multiple potential uranium targets in the country of Niger (Africa). Reading an earlier interview we conducted with Dr. John North, a director of this company,he told us, “There appear to be no scarcity of drill targets on the concessions.” So what was the big news? The CEO announced they had “identified several near-surface targets with significant uranium mineralization potential.” That wasn’t the news. Not even close. They already knew that!
The company covered 24,000 line kilometers, more than 14,000 miles. Their first pass-through was cherry picking. The real news was buried in the third paragraph, “…a second airborne survey to further delineate areas with strong uranium potential is expected to commence in the summer.” That should pick out the strongest targets for drilling at a later phase of the company’s exploration. That line also told us they had very encouraging news. If the second airborne confirms strong uranium potential, raising money to push the project through into drilling and advanced exploration will come more easily.
Forsys Metals Corp (TSX: FSY) announced on May 28th a new “detailed drilling” program on the company’s Valencia uranium deposit in Namibia (Africa). Closely spaced reverse circulation drilling will help add more “measured” resource to the company’s feasibility study. Increasing the measured resource will make it easier for the company to raise the money to develop a uranium mine or sell its deposit to a major company. Sounds good, but a news article Forsys Metals posted on its website was of greater interest to us.
A major hurdle in further developing the low grade uranium deposits in Namibia is water. These projects are in a desert. You need water, lots of it, to mine. On May 26th, The Namibian newspaper ran a very encouraging article – good news not only for the Rossing mine, but also for Forsys Metals and UraMin (which also hopes to start mining uranium in Namibia). What was the news? At a breakfast meeting on water conservation and management hosted by the Namibia Economic Society (NES) on Wednesday, NamWater CEO Vaino Shivute, announced, “The desalination plant is back on the table. We are looking into it again how to restart it, look at the problems of the past and learn from that.” With the water issue on its way to a possible resolution, we expect stronger interest in Namibia.
UR-Energy Inc (TSX: URE.TO) issued a series of news releases between June 5th and Thursday, announcing a number of significant developments. First, they confirmed their uranium resources on their two primary properties, Lost Creek and Lost Soldier, in Wyoming, by filing National Instrument 43-101 documents. Both resources were higher than the historical resource estimates. Second, the company confirmed the leachability of uranium on its Lost Soldier property.
Why is that important? Without the ability to leach the uranium through an In Situ Recovery project, the company would have been forced to raise the money for a far more expensive open pit operation. In an earlier interview, Chief Executive Bill Boberg told us the permeability would be a “go, no-go” consideration on the project. It appears it is a go. Thursday’s news release confirmed that, but buried in the bottom of the news release was a more telling news item. The company is conducting environmental, hydrologic and engineering studies to “generate baseline data.”
During the course of our research in Wyoming, we discovered a company must provide at least one year of baseline data before it can submit its application for a permit to mine in that state. The other piece of data in the news release showed UR-Energy has been working on this and expected to submit its application by mid 2007. In other words, the company is quickly moving forward to establish its In Situ Recovery operation.
See Part Two for the rest of this article.
James Finch contributes to StockInterview.com and other publications. Sign up now and get your free copy of our new book, “Investing in the Great Uranium Bull Market: A Practical Investor’s Guide to Uranium Stocks.” Just visit http://www.stockinterview.com for details.
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