Uranium warming up. Best Mkt Cap/Resource opportunity


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As a long term uranium investor I like to keep a fairly close eye on several factors including the spot price, the long term price, the direction of the global uranium companies share prices as well as the Australian Uranium Share Price Index and the  global uranium fund’s (GURAF) trend.

Recently we have seen an increase in both the spot and long term uranium price and over the last week a rise in several of the ASX listed uranium plays.

This lead me to have a look at the market caps and JORC resources of our ASX listed uranium plays.

I must admit the results surprised me in that one company in a safe, uranium mining friendly country, has a verified resource (291m pounds) almost equal to Paladin’s but a market cap of $19.6 million compared to Paladin’s 2.8 billion. Extract has slightly bigger resource than Paladin’s and a market cap of $1.5 million. Paladin are mining, Extract probably will be mining in 2011 but that doesn’t really indicate why my “find” is 100 times cheaper. Even more interestingly my “find” has good reason to believe that it will have a resource of around 1 billion pounds of uranium, around 3 times more than Extract current 400m pounds.

Here is what Australian-Shares.com says about my “find“.

Aura Energy (ASX: AEE, “Aura”) is a uranium explorer with projects in Australia, Sweden and Africa. The Company has assembled an exceptional portfolio of properties on three continents, including a major presence in Sweden’s Alum Shale Province, one of the largest depositories of uranium in the world. The Company continues to be very active, with drilling completed on all three continents in 2008.
Aura is a major landholder in the mineralised Alum Shale of central Sweden. The Alum Shale is widely distributed throughout the Baltic States and locally contains exceptionally large resources of uranium, vanadium, molybdenum and nickel.

Aura’s Storsjon Project adjoins Continental Precious Metals’ (TSX: CZQ) Viken Project, which has a published resource of 1.05 billion pounds U3O8 grading 0.017%. This size of resource makes Viken the second largest published uranium deposit in the world after Olympic Dam.
Aura’s considers that it holds approximately half of the uranium field, and anticipates defining resources of similar size to Viken in its Storsjon Project.“

I can hear you thinking it is the grades dummy:  “The resource, using a 100ppm U3O8 cut-off, gives the Häggån Project a contained uranium content of 291 Mlbs. This resource places Häggån seventh within the ten largest undeveloped uranium resources that are compliant with ASX or TSX requirements”

But from their latest metallurgy results published yesterday (14th/October/2010) Their  tank leach metallurgy seems to be promising… They also  have a massive amount of Vanadium, some Zn, Ni, Mb.

“The first metallurgical test results for Aura’s Häggån Uranium‐Molybdenum‐Vanadium Project in Sweden gave high uranium recoveries using conventional treatment methods:

  • Conventional acid leaching achieved uranium recoveries of up to 93% from Aura’s samples
  • Majority of uranium extraction was achieved in first 12 hours of leaching”

AEE are now looking at enhancing the leach process using a biological  model

“Aura commenced bioleaching testwork with the Parker Cooperative Research Centre for hydrometallurgical research in Perth, Western Australia in late 2009. Bacterial cultures have been established from three sources: the ore; waters from the project area in Sweden; and from a coal mine in Western Australia.

Initial work demonstrated improved extraction rates of uranium, molybdenum, nickel and zinc using bacteria, relative to samples without bacteria. Consequently these initial results indicate the Alum Shales within the Project are likely to be amenable to bioheap leaching.

This method of extraction will potentially provide a low capital and operating cost treatment route.
These preliminary small‐scale tests are encouraging, confirming that bacterially‐assisted leaching of uranium from the mineralisation may be technically feasible.”

So a very large resource possibly in the world’s top four, a proven tank leach process with a throughput time of around 12 hours and a possible much greater efficiency with a biological modification all for 1/100th of EXT’s current price. WOW!

Many of the uranium plays are looking healthy according to marketclub:

Canada Relaxing Foreign Investment Rules in the Uranium Sector
URANIUM: Up another $2.5!
Aurora Energy after the vote!
Cigar Lake: 2011 at the earliest!
China to Build 28 More Nuclear Power Reactors by 2020

Disclaimer: I hold AEE and EXT and of course : Comments on this blog should never be taken as investment advice

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