By: Peter Spina, Founder UraniumSeek.com
There is a great global hunt for new uranium discoveries. Hundreds of exploration companies are on the march throughout the world staking claims, sinking drills into the ground, analyzing rock and are all hopeful of the assay results. The great uranium grab continues with the price remaining strong near $100/lb, after the long overdue correction. The resulting reaction was a sharp decline in most uranium stocks. Some of these investments deserved their price haircut with lofty valuations. Others were never fairly valued and consequently provide investors with an excellent opportunity at this time.
Varied forecasts for uranium still hold prospects for another run back to $150/lb or higher. Should prices just stabilize after this pullback; a $100/lb price will create some enormous profits for the first group of companies to bring in new mine supply. Once the highly imbalanced and growing demand worldwide is satisfied, the U3O8 price may begin to ease. After this period, the lowest risk-reward profits will have been made. How many years until this event occurs is debatable, but until such time, one of my most favored advanced-staged uranium properties continues to remain under the radar screens despite their 33 million pounds of uranium, in addition to their other ‘gems’.
When I take a look around the uranium field, I have come across several potential investment choices. Some with interesting properties and others with strong cash flow models. In the more speculative investment class where large fortunes have been created before, the exploration activity is at historic levels. There should be a period upcoming with multiple discoveries of mineable deposits that will generate a buzz among this sector-class. Should there be a major discovery then expect speculative capital to flood the sector. Yet investors need not to take on unnecessary risks when there are investment choices that are well-advanced in their exploration programs and are trading at low market valuations.
This past June, I went to investigate Pele’s new uranium property in
This past January, Scott Wilson Roscoe Postle Associates Inc. released a NI 43-101 compliant report estimating that the deposit contains 30.05 million tonnes grading 0.05-percent U3O8, for a total inferred resource of 33.05-million pounds U3O8, and an additional potential mineral deposit of 25 to 30 million tonnes at grades ranging from 0.04 to 0.05 percent U3O8. When looking at the property on the ground and the data provided by past drilling programs, the potential for a 100+ million pounds deposit is quite possible.
What makes the story even more exciting than the large uranium deposit is the rare earth metals found with it. Drilling at the property has confirmed that for every pound of uranium, a few pounds of Rare Earth Elements (“REO”) are also situated with the uranium. As stated in a press release earlier this year:
“As noted in prior press releases, Scott Wilson RPA is investigating the technical and economic viability of REO recovery as a means of increasing revenues at
There are upwards of 500 uranium companies available to investors in the
The lower grade uranium ore does require firm uranium prices but with Pele advancing the project, they should be within 3 to 5 years in production. This is within my projected timeframe of strong uranium prices and one must also consider the possibility for the company to lock uranium sales in even before production commences. The project also provides investors with terrific leverage to the uranium price. Hypothetically speaking, should the production cost be $55/lb and with uranium trading at $85/lb, then the profit in this scenario equates to $30/lb. Now should the uranium price move to $145/lb, then the profit margin grows to $90/lb – or a triple in profits!
As well, such a timeframe puts them in the class of companies that have a genuine potential to make investors a strong return on their investments. Advanced stage exploration companies like Pele have a much higher prospect to advance their projects into production. Investors in the mining arena know that mines today can take several years or more to move into production. This provides Pele with a huge head start and thus minimizes the risk. When comparing the company to their peer group – the advanced uranium exploration companies - Pele continues to trade at just a fraction of group valuations!
In the coming few weeks, Pele will be releasing their anticipated Scoping Study. It will provide investors with an update on the project:
“The focus of the ongoing studies is to establish the basis for economically viable, safe, and environmentally compliant mining and processing facilities at
Pele has seen a vicious correction with the uranium, mining sector over the past months. This has created the opportunity for investors to enter into this company at severely discounted levels from earlier this year. Before Pele announced the addition of the
With current market valuations for Pele, I have made it one of my few selected uranium investments. Combine continued progress at their
Steady progress continues at Pele and more investors are likely to discover
In the end, the risk/reward I attribute to this stock and with the current $0.60/share makes Pele a true GEM of a stock! I recommend investors take a further look at the company. Here are some great resources to do so:
- Pele Presentaiton: http://www.uraniumseek.com/uraniumcasts/GEM/
- Bob Moriarty’s Pele Report: http://www.321gold.com/editorials/moriarty/moriarty062507.html
- Pele’s Website: http://pelemountain.com/
#1 – WEX.V: Profiled at $1/share. Current Price: $2+
#2 – GORO: Profiled at around $1.50/share. Current Price: $4+
#3 – TBLC: Profiled at around $1/share. Current Price: $3+
#4 - NEW – SMR.V: Profiled here at around $0.90/share. Initial 6-month Price Projection: $2+
You may view my public equity reports here: http://news.goldseek.com/PeterSpina/
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For further research and information:
Contact the Company Directly:
Pele Mountain Resources, Inc.
416 368 7224 phone
Disclaimer & Additional Disclosure
Please note: Pele Mountain Resources Inc. Is a paying client on Uraniumseek.com, Gold Seek LLC. The author holds a position in the company and is providing investor relations work to increase investor exposure in the company. Nothing contained herein constitutes a representation by the publisher, nor a solicitation for the purchase or sale of securities & therefore information, nor opinions expressed, shall be construed as a solicitation to buy or sell any stock, futures or options contract mentioned herein. Investors are advised to obtain the advice of a qualified financial & investment advisor before entering any financial transaction.
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-- Posted Wednesday, September 19 2007 | Digg This Article | Discuss This Article - Comments:
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