Saturday, August 26, 2006 at 08:04AM
Fronteer (TSX: FRG) put in another brilliant performance yesterday proving just what an excellent uranium stock it is.
What are the underlying driving forces behind this excellent progress in Fronteer’s stock price?
Well lets take a look:
The price of uranium ticked up again to $48.0 per pound. This is something we keep harping on about I know, but as we have said before “the future is clear, it is Nuclear” with the past hostility to nuclear energy subsiding the need for a safe supply of uranium is driving the price upwards. We are of the opinion that the price of uranium will not only continue on this path but will accelerate, as what appears to be obvious to us becomes a global reality.
Digging a little deeper we can also take some comfort from the performance of Fronteer’s subsidiary company Aurora Energy resources Inc TSX: AUX which has been on the upward path recently. Its shares moved up to C$8.65 yesterday with a one-day increase of 8.4%.
Aurora has recently announced the appointment SNC-Lavalin Inc. to conduct a preliminary engineering study on its Michelin uranium deposit in the Central Mineral Belt of coastal Labrador, having worked in Canada I know of Lavalin and think that this is a really good choice. They have also reported an increase from a resource of 18.3 million pounds, to a new Measured and Indicated Resource of 22.2 million pounds of uranium.
Just stop there! That’s another 4 million pounds at almost $50 per pound; lets say another $200 million in the ground. Such good news has an effect on the stock price.
Always keep an eye on the volume of the stock you are investing in as it tells a story of its own. Yesterday this stock traded 2.2 million shares compared to average volume of about 133,000. At this point I have to say that we did not buy any yesterday as we made our investment a short time back, however, somebody looks to have made a large investment in Aurora. Good for them.
26 August 2006