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« Uranium: Spot Price Up another $4.00 to $84/lb | Main | Mega and Cash Minerals Announce Drill Results »
Sunday
Oct282007

Santoy Resources: A Readers View

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Every now and again we publish an article from one of our readers, which we think, might be of interest to you. Today’s article is about Santoy Resources, which we have traded in the past but do not own at the moment.

Santoy: Worth A Look At These Levels?

One of the interesting characteristics of the stock market and indeed humans in general is that they rarely behave rationally. As seen mid August, some commodity shares seem to be inextricably linked to the fortune of the general market. This makes no sense as the fundamentals for energy and particularly uranium continue to sparkle.

One of the uranium companies hit hard these past months is Santoy Resources. I like Santoy for a number of reasons. Number one it is an acquisitor with properties close to known deposits in the Athabasca Basin, South East British Columbia, Otish Mountains Quebec and the Central Mineral Belt of Labrador. As a junior, Santoy has been able to attract quality joint venture partners including Mega Uranium, Denison and Wescan in 50/50 arrangements to minimise costs moving forward.

This strategy can be attributed to Santoy’s legendary CEO Ron Netolitzky. Ron was one of the original players in the Saskatchewan uranium rush. At that time he acquired over one million acres in the area before cashing out to switch into gold. He continued in Saskatchewan forming Delaware resources discovering the Snip deposit that ultimately produced one million ounces. In 1987 at $7 Delaware was hit by the stock crash. With a large debt, Ron was able to use his contacts to refinance quickly. Twelve months later he sold out of Delaware for $28 a share.

Ron moved on to developing Eskay Creek that became the fifth largest silver producer in the world. More recently Ron has again been developing precious metal properties with Golden Band, currently the largest landholder in the Saskatchewan La Range gold belt.

Santoy is his latest energy play focusing on properties close to known uranium deposits. It also has a coal bed methane prospect in the Rock River Basin, Yukon Territory. They own 37 percent of Boss Power Corp who are developing the Blizzard property with 1 914 973 tonnes U3O8 indicated resources (historic data). Early drilling has commenced at Mustang Lake showing a hole with similar grading to Aurora Energy’s Michellin deposit. The search continues.

Santoy’s goal is to increase shareholder value by developing properties to a feasibility stage. They have no long-term debt and 14.5 million dollars of working capital. Their CEO understands how to grow shareholder value using quality joint venture deals that minimise dilution. The combination of excellent people and properties may be significant going forward. At present, share price is down significantly and seems to be forming a double bottom around forty-eight cents. It may be worth a new look.

Paul Trevethan
Disclaimer: This is not investment advice.


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Reader Comments (1)

Up 4% today at $0.74, so your call is looking good!

November 1, 2007 | Unregistered CommenterUranium Stocks

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