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Friday
Apr272007

Aurora Energy Resources Inc: Up 27% in 2 months

As you may recall we bought into Aurora on the 2nd March at $14.17. This stock closed yesterday at $18.02 for a gain of 27% in just 2 months.

Chart:

Aurora Energy Chart 27 April 07


Aurora is now trading at a new high as we can see from the chart ignoring a one-day spike to the $18.50 level. We are of course extremely pleased with Aurora’s recent progress, as we have watched this uranium miner for some time without making a purchase. Timing an entry point is always difficult, as we tend to lose our nerve when a stock we want to acquire starts to fall to where we want to buy it. Our reaction is to dig like crazy in search of an explanation for the fall before we actually make the purchase. This time however it does appear to be shaping up as a good move.

Even though the company have increased their uranium resource by five times for their properties in the Aurora Uranium District in Labrador, Canada, they are confident that there is still more to be identified on top of the 96 million pounds confirmed already. (Measured 5.3 million, indicated 52.5 million and inferred 38 million) Aurora have committed $20 million to this years drilling programme in order to discover and expand the resource. To put it into context that’s more money than some uranium companies market capitalisation. The main objective of this exercise is to upgrade Inferred resources to Indicated Resources at the Michelin Deposit and to establish new resource bases at the Jacques Lake Deposit. Production is planned to come on stream in 2013.

From what we can gather these are multiple near surface deposits grouped together with no identifiable ground water or structural hurdles to hamper operations. Considering the effect of the recently flooded mines of Cameco and Ranger this is reassuring to know. The technical line up has quality too, with SNC-Lavalin, Earth Tech and SRK. Lavalin for instance goes back a long way in Canada.

So who is the President of this venture? Well it’s Dr Mark O’Dea. Yes an exact replica of the man from FRG.

Aurora has approximately 66 million shares outstanding at around $C18.00 which gives them a market capitalisation of $C1.18 Billion. No longer a junior and sure to attract the attention of the Fund Managers who wake up to what is going on in this small sector of the market place.

Now if the ‘Sell in May and Go away’ crowd hit the sell button in the near future and this uranium stock is sold off in the process then we will treat such an event as the opportunity of a lifetime to grab a few more shares. Our small group of investors have been put on red alert to raise some cash should this opportunity present itself.

Enjoy the weekend.

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Reader Comments (1)

Agree with your analysis of the fundamentals of Aurora, it's a stock with huge upside potential. However from a TA point of view you have a dichotomy: on the one side you are approaching/making a new high. On the other hand the RSI is toppy and there is significant divergence from the 50day MA. Double top or breakout - time will tell. For my money it's probably better to hold off a wee while to see which direction it takes

April 28, 2007 | Unregistered Commenterbob

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