Subscribe for 12 months with recurring billing - $199

Buy 12 months of subscription time - $199


Search Uranium Stocks
Uranium Price
Our RSS Feed

Uranium Updates

Enter your email address:

Follow Us on Twitter
« Uranium Participation Corp: Add to Holdings | Main | Santoy Resources Ltd: Sell »

Ur-Energy: BUY

Having sold Santoy at a remarkable profit, we are now adding Ur-Energy (URE on the TSX) to the BUY List.

Ur-Energy Wyoming Projects

Ur-Energy has been trading on the TSX since 2005 and it is one of the more interesting emerging US producers of uranium.

URE is actively involved in exploration for uranium and some uranium projects that are in the later stages of development. The main uranium projects for URE are its Lost Soldier and Lost Creek properties in the Great Divide Basin of Wyoming, USA. That fact that these project are in the USA are a great comfort to us as investors as in our opinion the USA is a “safer” place to mine, geo-politically speaking. Wyoming is especially good for mining uranium as the state has a history of uranium mining, having producing 200MMlbs of uranium. Therefore it should be relatively smooth running for URE to bring its projects into production.

URE also has the Bootheel, Radon Spring, HorthHadsell, Toby, and Kaycee properties in Wyoming, with a previously defined historical resource of 49 MM LBS of U3O8. In addition to this, Ur-Energy also has recently bought 79 Mineral Leases in South Dakota, that contain approximately 46,363 acres.

Looking north to Canada, URE is exploring for high-grade unconformity style uranium deposits in the Thelon Basin and alongside Triex Minerals Corporation (TXM on the TSX Venture) in the Hornby Bay Basin located in the Western Arctic.

However the USA projects, particularly in Wyoming, are the most attractive part of the company. Over 40% of America's uranium resources are located in Wyoming, and they are contained mainly within three geological uranium basins; The Shirley ,The Great Divide and The Powder River Basins. At the moment Cameco is producing uranium from the Powder River Basin and this project is the only ISL operation in the state that is currently active.

Ur-Energy is moving forward with their projects however, at Lost Creek and Lost Soldier, with production anticipated for Q4 in 2008. A combined resource of 24.9 MM lbs is included in the Lost Soldier and Lost Creek projects, and this resource is compliant with NI 41-101 standards. These two uranium deposits are being advanced towards production, and as they are next to each other, satellite operating concept similar to what is being attempted by Energy Metals Corporation (EMC) at its Texas in-situ leach operations could be applied to this projects as well. This year, URE has budgeted about $7 million for more pump testing, drilling, water quality testing, and environmental baseline studies at its Lost Creek and Lost Soldier properties, which we consider to be their most valuable assets.

Ur-Energy Logo

The best aspect of Ur-Energy, in our opinion, is that it is a near term producer of uranium with substantial uranium deposits that are 43-101 compliant. Last year, URE advanced their Lost Creek and Lost Soldier projects a great deal, and we hope this trend can continue through this year, leading up to production of uranium at the end of 2008 and full production kicking into gear in 2009 going up to a rate of about 1 million pounds of uranium each year. The Lost Creek and Lost Soldier properties have a 43-101 resource of 24.9 million lbs and this deposit of uranium is located at fairly sallow depths of 400-500ft. This is nearer to the surface than many other ISL deposits and so the cost of well field construction should be considerably lower for URE.

In the mining business, or any business for that matter, management plays a key role in the success of the company. The Director of CEO of URE, Bill Boberg, has over 35 years of experience in the resource industry, spanning from Africa, Asia, Western North America and South America on a variety of mineral projects. Bill also has more that 20 years experience exploring for uranium in the US with a strong focus on Wyoming. He has worked for Hecla Mining, a stock which is on the BUY list of one of our sister sites, as well as Anaconda, Conoco Minerals, World Nuclear, Kennecott, Western Mining Corporation and Canyon
Resources, holding management positions in the majority of these companies. With his expertise he as assembled a team with 400 years of combined experience in the industry. This is crucial to any mining company, but it especially applies to the uranium sector as know how and uranium knowledge and expertise is scarce.

Ur-Energy has a market cap of about $350 million and so it is not too big that it will be slow to move, but big enough to be considered by investors as a decent way of playing the uranium bull market. If we take the Lost Soldier and Lost Creek properties alone, with a resource of 24.9 million lbs, URE is currently trading at just over $14 per pound in the ground and if we add in the historical resources of its other Wyoming projects, it is trading at just over $4.70 per lb, so there is still a lot of upside potential in this stock as it moves towards production.

Ur-Energy Chart

From the chart we can see that URE has been doing very well indeed, but it has come back slightly from its highs, with the STO on the bottom and the RSI at 50, this stock looks to be a good buy at $4.75 both technically and fundamentally, backed by a strong 43-101 resource base and uranium projects coming into production with the help of a top class management team.

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.
Author Email (optional):
Author URL (optional):
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>