A joint venture between Delta Exploration and Rockgate Capital was recently brought to our attention by a uranium stocks reader. The following is our opinion of their uranium project in Mali, West Africa.

Firstly, this is a copy of the email that was sent to us by one of our readers.

Hello!

PS For disclosure purposes, I have both, DEV is my largest holding right now.

Allow me to introduce both of these companies, before we begin.

Rockgate Capital (RGT:TSX.V) is a mineral exploration company, based in Vancouver. Delta Exploration Inc. is also a Canadian-based, TSX-Venture Exchange listed company (DEV.V) exploring for gold and uranium in Mali, West Africa. These two companies have come together in order to work on a uranium project in Mali called the Falea Project. They are exploring for uranium and copper mineralization which was discovered by Cogema in the late 1970’s. However due to the fall in uranium prices, the project was abandoned, until now.

With the current bull market in uranium and the uranium price being at $85/lb, this project has become more attractive to both explorers and investors.

Rockgate has seen its share price go from $0.35 CAD in November of 2006 to its current price of $1.67 CAD over 477%!

Delta Exploration has also experienced an extreme rise in its stock price of 350% from $0.40 CAD to $1.40 CAD.

Such dramatic rises must be taken into consideration when purchasing uranium stocks, or shares in any company. The question is, will these uranium stocks continue to rise?

From a technical perspective, I would be wary of buying into these two very small uranium exploration companies after they have experienced such dramatic gains. It is highly likely that their stock prices will go through a correction and/or a consolidation period, before possibly moving even higher. However, a number of stocks in this sector are hitting the ceiling, so don’t let us put you off them.

Fundamentally I have a few concerns about this project. Firstly it is in Mali. West Africa, although very rich in natural resources, comes with great political risk. Mali is one of the poorest countries in the world and it has experienced a turbulent political past so it may be vulnerable to unfavourable regimes in future. Therefore I would prefer to invest in countries that were not in Africa and did not carry great geo-political risk, countries such as Canada, Australia and the USA.

The team here at uranium stocks would like to wish these companies and their investors the best of luck in the future and certainly if you have been holding these uranium stocks for a while, you have done extremely well. Well Done!

However at the moment we at uranium stocks do not see this as a BUY on our list, because of its lack of proven reserves, the fact that the project is in Mali and that the chart is looking extremely overbought.

We prefer uranium stocks like Rampart Ventures, Fronteer Dev, Laramide Resources, Mega Uranium and Uranium Participation.