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« URAMIUM: at $100.0, but when? | Main | Crosshair Exploration and Mining Corp: Update »
Saturday
Oct212006

ESO URANIUM CORPORATION: Time to buy?

esologo1

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.

esochart21oct06

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

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Reader Comments (3)

Your article on ESO was very informative. I have been following this stock closely as it taken off from a low of .37 to just under .80... they announced this week that they will start drillling tests at Cluff Lake... What is the short term potential of this stock? Can it soon be back at 1.50???

Also I bought EMC based on your October portfolio comments... and have been doing very well... From 5.50 to 8.60 in a few weeks...

thanks.

Tomas.

November 2, 2006 | Unregistered CommenterTomas

First up is that we have not bought this stock although as we have said it is on the Watch List with a number of other 'suspects'! These stocks with small market caps are tricky to say the least. We need to keep one eye on the volume. You will note that a few days ago 57,000 shares were traded and the stock price was $0.50. The volume then surged to 912,000 shares traded and the price hit $0.75. At this point we thought that we had missed the boat. However, we do try to be patient and not get stampeded into an investment because all of a sudden it's popular. Yesterday the volume dropped to 285,000 shares traded and the price dropped to $0.65. The point being that as investors it could us who are the driving force behind the stocks movement.

So, our strategy is still to watch for a little longer and let the heat drop a little in the hope that a truer picture will emerge and a reasonable entry point will present itself. As for going back to $1.50, well yes this is a real possibity.

November 3, 2006 | Unregistered CommenterBob

Glad to hear that you are making a profit on EMC. It really makes our day when someone acts on what we have posted and makes a dollar or two.

Again keep an eye on the volume, if it starts to tail off you might want to lock in some of these gains. Stock prices in our humble opinion do not go up when the volume is going down.

We tend to invest for the longer term however, short term opportunities for profit taking do come along, so please let us know how you get on and good luck with EMC.

November 3, 2006 | Unregistered CommenterBob

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