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« Uranium-stocks: Portfolio Update 29 Dec 06 | Main | Uranium quietly up $7.00 »
Wednesday
Dec272006

Santoy Resources Ltd: A Jack-of-all-trades?

We have received a number of emails this week about Santoy Resources so we will try and give you a balanced outlook for this uranium stock.

Santoy Resources Limited has concentrated its efforts in the energy sector with its emphasis firmly placed on uranium projects in Saskatchewan, British Columbia, Manitoba, Labrador and Central America. So as investors in Uranium we are of course interested in Santoy’s activities. The table below tells us where they are and what sort of geographical area they cover. Mainly in North America so they are as geopolitically as safe as any.

PROJECT SIZE

HAZEMPA LAKE 20,033 ha and 11,870 ha
FIR ISLAND 21,994 ha
PATTYSON LAKE 29,189 ha and 15,675 ha
DOWLER LAKE 21,418 ha
KARPINKA LAKE 18,828 h

The total area acquired in northern Saskatchewan is 139,000 ha (343,500 acres)

However along with uranium interests they also have Coalbed Methane, Coal, Oil & Gas and Projects Available for Option, which include base metals and gold. This begs the question ‘Are they a Jack-of-all-trades and a Master of none’ or is their veteran management team agile enough to pursue a number of wide ranging options without dropping the ball. We tend to be of the opinion that an exploration company going after uranium or uranium and gold is focused on the job at hand. Santoy does appear to have a number of targets, which could mean that their resources are spread a little on the thin side. We will leave their other interests for another time for now, as they may generate something of value in the future.

This is a small stock to invest in with a market capitalisation of around $57 million, a stock price of CDN$0.81, and approximately 70 million shares outstanding. They can be found on the TSX Venture exchange under the symbol of SAN. The stock price is volatile to say the least having hit a high of $0.90 it then fell out of bed only to climb back to $0.81 recently. The volume is strong and appears to be gaining more interest.

These price oscillations could be attributed to a number of reasons, however we must bear in mind that this whole market sector is small and any one particular stock can rise and fall on a small amount of investor activity. Our projection of $200.0 per pound for uranium remains intact so the general trend for uranium stocks that actually have something in terms of quality should pay handsome dividends.

As we can see from the chart this stock is certainly going through a few gyrations with the stock price now having moved significantly above its own 200 day moving average.

san1



We took a chance and made a small investment at $0.71 and we thought that it was a high entry-level price. We had hoped that it might fall back and present us with a cheaper buying opportunity but it is now at $0.81 and we still think that it is high.

We do not wish to put you off this stock as we believe that it could be dramatically higher in the near future but do not go mad on it. Try to be patient and buy slowly on dips is the conventional wisdom, but are we in conventional waters? We think not!

Good Luck.


27 December 2006

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