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Is now a good time to jump on uranium floats?

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fryzie

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Ive been looking at Gladiator Resources Ltd who are a Nickel, gold and uranium explorer. I rang them up today and found out their prospectus closing date has been extended to 17 April 2006. This is going to be my first time buying shares and wondering if this a good time to jump on floats who deal with uranium? Minimum is 10,000 at 20c so thats $2,000.

Any advice? thanks
 
fryzie said:
Ive been looking at Gladiator Resources Ltd who are a Nickel, gold and uranium explorer. I rang them up today and found out their prospectus closing date has been extended to 17 April 2006. This is going to be my first time buying shares and wondering if this a good time to jump on floats who deal with uranium? Minimum is 10,000 at 20c so thats $2,000.

Any advice? thanks
Click to expand...

Hmmm.... Interesting...

Do u know why the close date has been extended?

Because they failed to raise funds?

If this is the case - i personally wouldnt touch them...

Dont get caught up in the toro hype too much, they commanded a premium price because of their management and OXR's history of delivering shareholder value...
 
fryzie said:
im not sure why they extended..
but dont most end up being extended?
Click to expand...

I dont know about most

But i know toro (probably the benchmark against which other U floats will be compared to this year) close date was actually PUT FORWARD, because they were getting too much influx of cash, they collected 60mil plus for an 18mil float and therefore, closed EARLY...
 
The best floats are those that are oversubscribed! And it isn't a great sign that this one was extended as the previous poster mentioned. It means that not enough people bought into them, which means when they list, there is no pent up demand. This may result in the opening sp falling.

If it was me I wouldnt go in to an IPO/float on my first venture Just my :2twocents
 
I wouldn't go for this one either though can understand your feeling anything to do with uranium just has to be a "goer" at present , such is the hyped up state of this sector right now. Imo it's getting to the somewhat hysterical stage and may well be overheating.

Have you considered as a possible alternative something like BHP which has a substantial exposure to uranium but a proven track record.

Good luck.

Julia
 
I think U308 might be the next one to watch, having the offer extended does not bode well for stags on this one
 
i'd personally look more towards these two... remember most of these so called uranium companies don't even have holes in the ground and putting a hole in the ground takes alot of time and costs alot of money

Summit Resources (SMM)

Summit Resources is a dedicated and established U company with a 35,000 tonne resource. If Peter Beattie overturns the Qld Uranium policy then Summit will be worth between $2 and $5 (Currently $1.42) at current Uranium prices. If Uranium prices continue to strengthen ( a possibility when one discovers the number of new Nuclear reactors on the drawing boards in China, India, and Japan) then Summit could be worth much more.

www.summitresources.com.au

Compass Resources (CMR)

This company has a "free option" uranium business possibly worth several dollars per share according to Huntleys Research. The attractiveness of CMR is due to several points:

1. Tight share register (78 million share) of which over 40% are held by experienced management.
2. Browns Copper Oxide project which is forecast to earn over $300 million per annum over 20 year mine life.
3. Uranium production as a by product from the existing production so it will be a low cost operation.
4. Mining to begin later 2006 and all funding in place.

www.compassresources.com.au
 
guys thanks heaps for the advice

so CMR would probably be a good one to jump on now for a mid-long term investment

U308 looks like a good one also to get in on a float
 
Even though it may seem to be a good idea to jump on the uranium band wagon you are too late. The uranium stocks all have risen by a substanial amount and many are now over priced. It is best to try and get in before everyone else, but if it was that easy everyone would be doing it. You must do your homework on companies before investing! goodluck

twojacks28
 
twojacks28 said:
Even though it may seem to be a good idea to jump on the uranium band wagon you are too late. The uranium stocks all have risen by a substanial amount and many are now over priced. It is best to try and get in before everyone else, but if it was that easy everyone would be doing it. You must do your homework on companies before investing! goodluck

twojacks28
Click to expand...

Nobody has missed any boat...

People said the same thing about Paladin when it was $2 and the same with Oxiana when it was $1....

There is no such thing as "uranium band wagon", but as always, STOCK SELECTION IS KEY...

U dont just invest in any uranium stock, there is still VALUE out there, u just have to look for it and be quick, get in, make ur money and get out...

I personally didnt even think toro was worth $36million offer price, but i got it, made my money and got out...

Remember that if u hold onto anything long enough, it always returns to its intrinsic value, and for SOME of these companies thats ZERO, but NOT for ALL of them..

Good luck
 
there is such a thing as the term is being thrown around the workplace everywhere. when a stock or resource is publised heavily people get onto the stocks that have links to that resource. uranium stocks are going up because we have signed a deal with china. toro is overpriced as they are only an explorer. but you are right stock selection is the key and you need to get in early.

twojacks28
 
fryzie said:
Ive been looking at Gladiator Resources Ltd who are a Nickel, gold and uranium explorer. I rang them up today and found out their prospectus closing date has been extended to 17 April 2006. This is going to be my first time buying shares and wondering if this a good time to jump on floats who deal with uranium? Minimum is 10,000 at 20c so thats $2,000.

Any advice? thanks
Click to expand...

http://www.theaustralian.news.com.au/story/0,20867,18777897-643,00.html

Uranium hopefuls
CRITERION
Tim Boreham
April 11, 2006

THE current valuations being ascribed to even the most rag-tag uranium hopefuls might look reasonable in a decade's time. But it's just as likely that we've solved the Middle East's woes and sent a man to Mars by then as well.
The truth is: even if another ripper uranium resource is proved up, there's bugger-all prospect of an Australian mine being built (and approvals granted) in that period.

While the world will clamour for more uranium, shorter-term demand is likely to be satisfied by known new mines and existing projects, such as BHP Billiton's Olympic Dam.

Even Rio Tinto's Leigh Clifford - who's now known for pontificating on commodity prices - warns the current $US40 a pound uranium price - which has almost doubled in the past year - cannot be sustained.

He notes the planned new nuclear power plants - such as the 40 slated by the Chinese - could take a decade to fire up.

Clifford's salient warning is supported by the Australian Bureau of Agricultural & Resource Economics, which forecasts a modest 1 per cent per annum uptick in uranium demand over the next five years.

ABARE forecasts that the value of Australia's uranium exports will decline to $521 million by 2010-11, compared with $712 million in 2005-06.

"Despite recent significant increases in expenditure on uranium exploration, uranium production over the outlook period is expected to be largely dictated by production from existing operations," ABARE says.

While there's a big global supply/demand gap, the void is filled by recycling material from decommissioned bombs and reprocessing spent fuel.

There's also new production this year: Paladin Resources' Langer Heinrich project in Namibia (1180 tonnes per year) and the Zarechnoye mine in Kazakhstan (590 tonnes).

Next year, it's Southern Cross Resources' Dominion project in South Africa (1800 tonnes), while Cameco (the world's biggest producer) is expanding output at its existing Cigar Lake operation in Canada.

As with all manias, investors are spoiled for choice in terms of options to do their dough. At least 40 listed miners claim a uranium exposure. Dozens have packaged up their uranium tenements (or, strictly speaking, patches of dirt where uranium might reside) and flogged them off.

Oxiana, for instance, spun off Toro Resources (TOE) at 20c on March 24. Toro only yesterday announced the start of its drilling program, but that didn't stop the stock leaping to a high of $1.60 in late March. TOE stock yesterday closed 5.5c better at $1.22.

The uranium mania has been fuelled by political developments which look promising, but might be red herrings more than anything.

First, Labor's likely rethink on its "three mines" stance could remove a 20-year impediment to the sector's development. Labor governs in the relevant states of South Australia, Western Australia and Queensland, but expect them to handpass the hot potato into the calloused hands of their federal comrades.

Criterion suspects Labor's policy will change, given Australia has $32 billion of current uranium reserves. Alternatively, Labor is likely to be voted out of office in at least one of these states over the next decade, with Queensland looking the most vulnerable.

In the shorter term, it's more important for miners to prove up a resource for the politicians and greenies to argue over.

Uranium enthusiasts have also been heartened by the feds' agreement with China, to allow the Chinese to buy yellowcake and explore for the stuff here.

Hmm, very promising. But once again, the existing mines will fill the short-term demand. China did sign an exploration deal with Uranium Exploration (UNX), but there's more than a sneaking suspicion it's more interested in Uranex's Tanzanian ground.

Criterion ascribes a SELL recommendation to a whole sector: uranium explorers with no proven resources and little hope of achieving production.

It's a bit tough to tar all the players with the "overvalued" brush, but the valuations look crazy. At the very least, there's no way of knowing whether they're ridiculous or not.

Examples are Toro, UNX (38.5c), Nova Energy (NEL, $1.74), Encounter Resources (ENR, 60.5C) and Globe Uranium (GBE, 55c).

Paladin (PDN) should make good money from Langer Heinrich and its Malawi project will probably get off the ground.

But Paladin's market cap stands at $2.1 billion: more than the value ascribed to the Seven Network, Unitab, Dyno Nobel or the soon-to-be-producing Bendigo Mining.

A handful are worthy of a SPECULATIVE BUY. Summit Resources (SMM) has a proven ore body at its Mt Isa project: 22,100 tonnes of "measured and indicated resources". It's the local deposit most likely to be developed.

Marathon Resources (MTN, $1.07) has 33,000 tonnes of inferred resources at its Mt Gee tenement in the Flinders Ranges.

"Marathon Resources appears to be in the right place at the right time," says stock-picker Fat Prophets.

Another investor says: "Marathon has run ahead of itself. Needs to do more work."

Compass Resources (CMR, $2.35) also earns Brownie points for looking in the right place: the Rum Jungle field in the Northern Territory, which supplied Cold War uranium to the British and Americans before being forgotten for four decades.

Monaro Resources (MRO $1.06) is taking a different tack and looking to the Kyrgyz Republic, Russia's traditional source of uranium.

Monaro is still setting up, but boasts the biggest acreage in the consonant-rich republic. As well as being deficient in vowels, Kyrgyz also lacks the usual pesky environmental standards and red tape.

Alternatively, investors could forget about the blue sky and stick with ERA, the only dedicated uranium producer.

The trouble is, ERA's output is subject to long-term contracts well below current spot prices. Over time, these contracts will be rewritten at higher prices, so uranium's old-timer will be able to join the party.

ERA shares look fully valued at $15 but we rate them a LONG-TERM BUY.

Criterion subscribes to uranium watcher (and Monaro chairman) Warwick Grigor's view that investors should hold back for more drilling results.

His rule of thumb is that anyone with a 1000-tonne plus resource is worth a look at.

Grigor believes uranium is not just a cyclical play, but will benefit from sustained long-term energy demand.

The world certainly can't rely on wind farms if those orange-bellied parrots keep flying in the way.

Grigor adds: "I think the sector needs to play it cool for a little while." Indeed.

borehamt@theaustralian.com.au

The Australian accepts no responsibility for stock recommendations. Readers should contact a licensed financial adviser. The author does not hold shares in the above-mentioned companies.
 
Some good advice on this thread.. If you want short term profits on uranium one safe method might be to look for things that will spark the interest of the market..buying on the anticipation and selling before the event.. try to buy a few months before the anticipated event and sell before the risk kick in..

For this kind of hype anticipation you want ones that are drilling overseas in politically stable companies that support U mining., These will get more attention then explorers that are solely based in australia as things may be restricted here for some time yet..

UNX is one that migth fit this criteria... chinese interest and starting thier drilling campiagn in tanzania shortly.. waiting for it to settle after chinese spike then planning to hold through drilling campaign and sell before results and buy back in on good results..

a version of the buy on lead up.. sell on spud.. play for junior oil explorers...

my 2c not recommending anyone buy unx .. :p
 
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