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« Denison Mines (DNN): Continues to Underperform | Main | Uranium-Stocks: Portfolio Update 13 March 2009 »
Monday
Mar162009

Mega Uranium Limited: Holding Gains!

MEGA Chart 17mar09
Chart courtesy of Stockcharts


As we can see from the above chart Mega Uranium Limited is managing to hold on to its gains despite it being a roller coaster ride for this uranium stock. Having traded as low as $0.40 in December 2008, galloped up to $1.40 in January 2009 and back down to $0.70 in February 2009, it is pleasing to see the stock close today at $1.25. The technical indicators are high so expect Mega to take a bit of a breather shortly. We expect to see the volatility to continue as the worlds financial markets are still in turmoil and the fall out can and will land anywhere, including this tiny sector
.

Mega Uranium Limited remains on our buy list along with Laramide, we do get tempted from time to add other uranium stocks however for now we will stick with just these two uranium stocks as buys. Many of you are fans and indeed investors of other uranium stocks that you will favour over these two stocks, which is fine, but if you can find the time do write and tell us which is your favorite stock and why you think that it will do well in the future.

It is important that any company keeps its investors up to date with the progress that they are making and Mega's news flow is fairly constant and usually very interesting such as their active involvement with Aura Energy whereby Mega Uraniumhas approved and will fund a proposed 24 hole aircore drill program of approximately 2000 metres in the Gunbarrel Basin Joint Venture in Western Australia with Aura Energy. The program will be managed and operated by Aura Energy.”



There is also the news from Cameroondrill intersections include 3.4 meters @ 0.10% U3O8, 3 meters @ 0.13% U3O8 and 41.9 meters @ 468 ppm U3O8 - Grab sample results of 324 - 8293 ppm U3O8 at Salaki.

Please click on the links to read the articles in full.


For now our strategy remains unchanged as we continue to hold on to what we have and watch this market in the hope that we can spot a significant upturn in the spot price, as it is the spot price which still occupies center stage in terms of influencing investor sentiment. The rate of decline in this price has slowed considerably which suggests that the worst is now behind us, so keeping calm and patient is the order of the day for us. However if these price levels are attractive to you then by all means don't be put off by us, pick up a few of your favorites.

Mega Uranium Limited trades on the Toronto Stock Exchange under the symbol of MGA, has a market capitalization of $233.63 million with yesterdays turnover of 981,220.00 shares tredaed.

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Reader Comments (13)

IMO, currently the best uranium company to invest in is Extract Resources (ASX:EXT).

It has declared a JORC-compliant inferred resource of 25.1m lbs at the Ida Dome project in Namibia plus 108.3m lbs at Zone One with drilling underway on Zone Two which will possibly prove up a further staggering 105m lbs. All at grades considerably more than the existing Rio-owned Rossing mine which it adjoins. And there is the rest of a 7km trend to go- over 300m lbs in total?

Kalahari Minerals (AIM:KAH) owns 40% of Extract. Niger Uranium (AIM:URU) owns 16.6% of Kalahari. Rio Tinto has taken stakes of ca 15% in each of Extract and Kalahari but Areva and Cameco could be also become bidders.

March 17, 2009 | Unregistered CommenterRobert Wallace

Robert, Thanks for this update, its very interesting data, we'll add Extract Resources to our watch list.

March 17, 2009 | Unregistered CommenterUranium Stocks

Team,

Mega gained 24% today adding 30 cents to the stock price to close at $1.55. More importantly is that it broke above its 200dma convincingly, so its fingers crossed that Mega can continue to trade above this average and head to higher ground.

March 17, 2009 | Unregistered CommenterUranium Stocks

Forsys Metals FSY (Toronto)is also in Namibia with a permitted mine. The stock has declined significantly due to money problems with George Forrest Intl. but should bounce back nicely. The uranium is there and easy to get at and the company could also be a takeover target if GFI can't do the deal by the next deadline.

March 17, 2009 | Unregistered Commenterdaveydog

I happened to notice your mention of Cash Minerals (drill results). I've been a long-term (and sorry!) holder of Cash, and I was wondering if you see this company as having any life left in it.

Thanks for the newsletter.

March 19, 2009 | Unregistered CommenterRK

RK,

Cash Minerals is a uranium stock that we really dont follow, apart from the mention it got when posting about Mega Uranium.

Maybe some of our readers can bring us up to speed - they are usually very knowledgeable especially when they own the stock.

March 19, 2009 | Unregistered CommenterUranium Stocks

Team,

Mega up today 11.64% to close at $1.63, so things are improving slowly.

March 19, 2009 | Unregistered CommenterUranium Stocks

Uranium Stocks:

Your comment about putting Extract Resources on your Watch List on March 17 was unfortunte; you should have put it on your BUY list!
Just look at this comment which appeared on Mineweb today (28 March) and you can realise why I said IMO Extract was the best uranium company to invest in:

Namibia's uranium bull market

Extract Resources, a global top stock performer, among all stocks, is finding that grades improve as it drills deeper at the (already) world class Rössing South project.

Author: Barry Sergeant
Posted: Friday , 27 Mar 2009

Extract Resources put it this way on Friday when announcing its latest assay results: "Rössing South is the highest grade granite hosted uranium deposit in Namibia and potentially one of the largest uranium deposits in the world".

In Australia, certainly, the long lamented bull market in listed uranium stocks seems to be back - certainly, again, for those names on the right pieces of ground in Namibia. Extract's stock price has exploded over the past few months, not least on news that major miner Rio Tinto (and world No 2 uranium miner) has raised its stake in Extract to 15.6%.

The Extract stock price is currently nearly 500% higher than its recent lows, seen in November 2008. Kalahari Minerals, which holds 38.85% of Extract Resources, has seen its stock price rise by 269%; the two names rank as among the best-performing in the world, across all equity subsectors. Rio Tinto has also acquired a 15% stake in Kalahari Minerals.

The latest news from Extract on Rössing South, which lies immediately south of Rio Tinto's Rössing mine, can only be classified as confirming a world class deposit. In January Extract announced an initial resource of 108m pounds of uranium oxide at a grade of 430 parts per million at zone I of its Rössing South project. The very latest numbers include 53 meters at 794ppm U3O8, 65m at 1,056ppm and 20m at 3,351ppm, from 90 meters to 247 meters depth.

March 27, 2009 | Unregistered CommenterRobert Wallace

Robert,

Well done with your purchase of Extract, we have noted its progress recently and that it jumped again yesterday to close at $4.45.

Would you be so kind to tell us what your exit strategy is?

We have been up and all the way down again on a number of stocks so how you intend to profit from this trade is interesting to us.

March 28, 2009 | Unregistered CommenterUranium Stocks

Suggest you go the www.extractresources.com site and look at the "fly-past" video. The paleochannel that Extract has discovered is a parallel one to Rio's Rossing trend. In fact it is the same paleochennel but is linked by a double bend to the original Rossing channel.

The further Extract drill along their channel the higher grades they are discovering. They have so far drilled out Zone One (108m lbs) and have got up to six drills working flat out on Zone Two. So far some 3/4 kms have been/are being covered, after which they will have a resource of at least some 220m highly viable lbs. Analyst estimates range to to A$7+ when this stage is reached- scheduled for August 09.

After that there are are another maybe 6/7 kilometers to go! And the grades are at least double and up to 8/9 times richer those of Rossing which has been a highly profitable mine for decades!

I's not totally fanciful to believe that they could end up with nearly a billion highly economic pounds in the ground. (NB Forsys' Valencia deposit with Rossing-type grades was bought by Forrest originally at US$9 in the ground!) I fervently hope I will be able to hold and see the day when the final resource estimate is made by Extract.

However my fear is that a major, probably Rio, who have already stepped up to the plate for 15%, will nip this in the bud and buy Extract out long before then, probably sooner than later. I therefore reluctantly forsee a forced exit for me. If other majors try and spoil Rio's party the fireworks over the final exit price will really light up the sky.

Note all of this scenario applies to London AIM-listed Kalahari Minerals and Niger Uranium just as well. (see my first 17/3/09 post on this thread). Both these companies have further projects apart from their holdings in the Extract success story, Niger's are particularly promising.

March 28, 2009 | Unregistered CommenterRobert Wallace

Further to my post at 4.18 today.

There is another Extract exit opportunity scenario; a JV offer from a major. Extract will almost certainly have to raise money later in this year if it is to remain the operator. Rio would be JV favourites with an existing processing plant nearby.

But Areva will have one at Trekkopje also in the same region of Namibia and Cameco could install a stand-alone plant as they have done in Kazazhstan, another foreign country for them. BHP, unlike Rio, have low debt and the deposit could be attractive although they already possess the world's largest deposit at Olympic Dam.

If Extract sees fit to accept a JV offer it would almost certainly cede control and, subject to the Australian and Namibian authorities approving the passing of control the shareholders' choice might be staying with the project over many (profitable?) years ahead or selling in the market.

March 28, 2009 | Unregistered CommenterRobert Wallace

Robert,

Thanks for this update, can we take it that you are waiting for a take over bid to materialize somewhere down the line and will hold until then?

March 29, 2009 | Unregistered CommenterUranium Stocks

I stand by what I said in paragraphs 4 and 5 of my post at 4.18 on 28 March.

March 29, 2009 | Unregistered CommenterRobert Wallace

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