ESO Uranium Corporation has fallen from its highs of $1.50 by 2/3 to 0.40 and recently made an encouraging recovery to the $0.50.

We have had a number of enquires regarding this stock over recent weeks so today we will post what we have.

This stock has been on our Watch List for some time however we have not bought it – yet.

ESO trades on the Toronto venture Exchange under the symbol ESO. It offers both exposures to uranium and to gold through its current projects.

On the uranium side ESO Uranium has close to one million acres of prospective uranium claims located in the Athabasca region.

On the gold side ESO has approximately 27000 acres of the Casa Berardi Deformation Zone in Northern Ontario. A number of geophysical surveys have been completed including high quality magnetic and electromagnetic surveys. Basal till sampling returned gold values of up to 55 g/t in heavy mineral separates, so ESO could be close to a sizable discovery.

The management team is littered with highly qualified and experienced staff, including Bob Beckett who graduated from Oxford University with a BA honours degree in Geology and has over thirty years of successful mineral exploration, development, and mine operations experience.

So far so good.

However we need to bear in mind that this is a fairly small outfit as we can see below the Market capitalisation is around $16 million. The volume of shares traded is a little on the thin side but then again this applies to a number of uranium explorers these days.

Shares issued 33,359,881
Fully diluted 42,414,322
Market Cap $16,000,000
Current Share Price $0.45 - $0.65
52 Week High-Low $0.41 - $1.48

Geographically and geopolitically we are on good ground in Canada.

So what bugs us and why haven’t we made an investment into ESO Uranium Corporation?

Well just take a look at the chart and compare it to the progress made by uranium. Yes it’s true that there are a number of uranium stocks that also look sluggish when compared to uranium but ESO has degenerated badly since making a high of $1.48. So we watch and wait. That wait may be over as we can see the beginnings of a recovery as the stock price has moved up and crossed over its own 50DMA, which is a good sign. It also looks like there is support forming at the $0.50 level, which is encouraging.

This may be a terrific opportunity staring us in the face but we need a little more convincing before we invest our funds in to ESO. We will continue to observe but don’t be put off by us, we have been wrong before.

Good luck if you do buy ESO we wish you well. And, as always please let us know how you get on.

21 October 2006