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 What's the best way to play the hot junior uranium market now? Many of the junior explorers have seen their share prices soar already. Of what's left, how many are serious uranium companies and how many are what we call "ambulance chasers" with promotion-oriented management teams who go after whatever they can raise money on?
There are too many companies in this field for us to follow, so again we canvas our friends who are the newsletter writers - they have their ear to the ground - which uranium companies have merit, and have a neat twist to their story? In our quick poll, Titan Uranium (TUE-TSXv) popped up a couple times, mostly because of management, share structure and the fact this little company got extremely lucky to secure a property adjacent to a big discovery days before it was announced. Growth Stocks Weekly editor Richard Reinhard had just completed a report on Titan for his subscribers, and we're thankful he allowed us to share it with you.
Growth Stocks Weekly www.gsweekly.com
Publisher: Diversified Financial Solutions ~ Since: May, 1995 ~ Editor: Richard Reinhard ~ E-Mail: rreinhard@shaw.ca
Performance: Year ended April 1996 116.9%; 1997 28.1%; 1998 36.4%; 1999 39.4%; 2000 180.9%; 2001 -50.5%; 2002 18.7%; 2003 28.8%; 2004 166.7%; 2005 28.2%
Junior Gold and Natural Resource Sector Report
Uranium
August 18, 2005
TITAN URANIUM EXPLORATION (TUE-TSXv)
Weekly chart: Year High C0.86, Low C$0.50, Last Trade C$0.73
Titan Uranium (TUE-TSXv) began trading on the TSX Venture Exchange June 2nd 2005. With a key presence in both the eastern Arctic territory of Nunavut's Thelon Basin and the prolific Athabasca Basin of Saskatchewan, the company is exceptionally well-positioned for a discovery in both the frontier and the heart of Canadian uranium exploration and production. As a bonus, management is not only technically adept, but has proven financing and promotional ability.
Titan's land packages well-define the corporate strategy of being a Canadian-based exploration company focused on high-grade, unconformity-type uranium deposits. With Titan's significant land positions in the two premier basins known to host unconformity-type deposits, investors achieve diversification and a well-leveraged opportunity as provided by the Thelon Project. To further whet investors expectations, UEX Corporation's recent blockbuster Shea Creek drill intercept of 27.4% U3O8 over 8.8 meters happens to be in close proximity and on trend with Titan's Athabasca Basin holdings.
Titan's recent 50 cent financing, which was oversubscribed, raised $3 million with approximately 12 million shares outstanding, and coupled with their initial property acquisition, attracted a top-notch technical team.
The creation of Titan comes at a critical time given the current opportunities that have been created in the uranium sector, where record prices are being set on an almost weekly basis. Titan has positioned itself well by initially establishing a major presence in the Thelon Basin in Nunavut. This basin is considered to hold strong promise and is potentially similar to the nearby Athabasca Basin where companies such as Cameco Corporation have been successful in the exploration of uranium. An estimated $170 million was spent last year on mineral exploration in Nunavut, a figure that is expected to grow substantially in 2005.
Titan's Uranium Projects
Unconformity uranium deposits are typically associated with fault systems and are usually formed as a result of diagenetic and hydrothermal processes. In areas where the deposits are at or near the surface, glacial movement has stripped off parts of these deposits leaving behind easily identifiable boulder trains. Another common method of locating uranium deposits is through identifying radon gas emissions. As uranium depletes over the course of millions of years it releases radon gas which slowly works its way to the surface.
In the last forty years uranium has become one of the world's most important energy sources. However, finding a deposit that can economically be brought into production is rare. There are many uranium mines operating around the world in close to twenty countries, but more than two thirds of world production comes from just ten mines. The largest and highest grade deposits of uranium are found in unconformity-type deposits located in Canada, with Australia and Kazakhstan having lower-grade operations.
Titan has been able to position itself into two exceptional geographic areas, the Thelon and Athabasca Basins, well-known for their large, high-grade uranium potential.
Thelon Basin
There is strong potential for a significant high grade uranium find in the Thelon area. Exploration in similar geological environments in Saskatchewan and Australia has discovered a significant number of high grade uranium deposits such as the McArthur River Deposit with proven reserves of 893,000 tonnes of ore grading in the 23 per cent range. Similar in geology to the Athabasca Basin and located 90 kilometres from Cogema Corporation's Kiggavik advanced uranium project, Titan's Thelon Uranium Project comprises eight drill-ready uranium properties covering approximately 4028 hectares with potential high grade uranium mineralization.
Titan recently completed a detailed property report compliant with National Instrument 43-101. Past work on the site includes regional geological mapping, prospecting, 13,612 kilometres of airborne radiometric, magnetic and electromagnetic surveying, and detailed lake-bottom geological sampling. Detailed surveys that have been undertaken to date include ground, geological and scintillometer prospecting. Samples from past exploration programs have yielded assays ranging from 0.05% to 2.7% U3O8 over narrow widths. In addition, prospecting on one of Titan's properties has uncovered more than 2800 mineralized phosphatic sandstone and breccia boulders that are interpreted to have multiple source areas and have one of the highest readings in the range of 38% U3O8.
The drill targets at Titan's Thelon Project are located at the apices of the boulder trains defined by numerous mineralized boulders with anomalous levels of uranium. This bodes well for the project because the Thelon Formation is an under-explored region with all the same geological features as the more highly explored, producing, Mid-Proterozoic basins elsewhere in the world, especially the prolific Athabasca Basin.
Athabasca Basin
In July Titan acquired a 100% interest in 30 mineral dispositions located in the Athabasca Basin, Saskatchewan. These Claims, in seven projects, are located in the eastern, northern and southern segments of the Basin. The Acquisition includes seven different properties comprising 105,652 hectares (261,067 acres).
Castle North and Castle South
The Castle Project consists of 16 mineral dispositions totalling 29,580 hectares (73,093 acres) located on the southern edge of the Athabasca Basin, to the North, East, and South of the 'Shea Creek Project', a joint venture between Cogema and UEX Corporation (UEX-TSX). Cogema, the Project operator, has identified three main mineralized zones. These deposits are located on a series of north-south trending conductors that extend onto Titan's newly acquired claims. Another defining feature of the 'Castle North' claims is its proximity to Cogema's past-producing Cluff Lake Mine (175 million lbs of U3O8 at 1.3%). Both the Castle North and Castle South Projects are road accessible which enables Titan to complete exploration activities on these Projects on a year-round basis.
Knight
The Knight Project consists of five claims totaling 11,567 hectares (28,580 acres) and is located south of Hocking Lake on the Northern rim of the Athabasca Basin. The claims are located on the southern extension of the "Black Lake Property" (50% UEX / 50% Cogema). The Project area was formerly part of the 'Riou Lake Project' as identified by UEX. Surface prospecting, geophysical surveys and diamond drilling on the Riou Lake Project have successfully identified areas of anomalous alteration, uranium mineralization, radioactive radon-bearing springs, and uranium-bearing boulders in till which suggest the Project area is prospective for unconformity-style uranium deposits.
King
The King Project consists of two claims totaling 11,339 hectares (28,019 acres) and is located directly south and contiguous with several Cameco Corporation claims in the western Athabasca Basin. This property has numerous conductors that will be high priority targets for further exploration activity.
Rook I, Rook II, Bishop I, and Bishop II Projects
These four Projects are grassroots projects that have a similar geological relationship to the Shea Creek area. Airborne MEGATEM has identified well-constrained, conductive zones and favourable structural components on each of these properties; however, it will take systematic geophysics and drilling to help clarify the potential of the Projects.
Recent Events
On July 13, 2005 UEX and Cogema announced results from their 2005 spring/summer drilling program at the Shea Creek Project (Anne and Colette deposits). The highlight was a drill intercept of 27.4% U3O8 over 8.8 meters in hole SHE-114. Titan's recent acquisitions (News Release dated July 5, 2005) include the Castle North and South Projects which are in close proximity and on trend to this recent discovery hole. An airborne magnetometer survey map showing the location and underlying trends associated with Titan's Castle North and South Projects can be viewed on the company's website at http://www.u3o8.ca . The spectacular high-grade Shea Creek intersection highlights the strategic and timely significance of the Athabasca property acquisition. Titan now has the ground on the western side of the Athabasca Basin that could be the site of a significant discovery.
Dr. Roger Lainé, P.Geo., is preparing 43-101 reports on the Castle North and South Projects. Dr. Lainé is an experienced uranium geologist having worked with Cogema and its predecessor, Amok Ltd., from 1975 to 1989.
The company continues to move forward with the Thelon Basin Project in Nunavut. A summer field program of mapping, prospecting and community consultations has been progressing during the month of August.
De Beers also announced in July that it will team up with Canada's Cameco Corporation to look for uranium in Nunuvat for the first time. Cameco, the largest uranium producer in the world, will search De Beers' Aberdeen Lake property to earn a 60 percent interest in the project. Cameco will be responsible for mining and marketing the mineral if any uranium is found.
Uranium Demand
Uranium is used to fuel nuclear power reactors. With uranium demand far outstripping supply, the mineral has obtained new-found respect, especially given the expanding need for nuclear reactors in rapidly growing countries such as China, Russia and India. This has put pressure on global uranium supplies, and has triggered interest in new mining operations.
While current worldwide demand levels are at approximately 190 million pounds annually, only about 135 million pounds are being produced. The United States remains Canada's primary customer, but China is planning to spend billions of dollars to build 40 more nuclear reactors by 2020 to generate electricity to feed its booming economy. Coupled with the fact that the price of uranium has steadily increased over time, Canadian companies are very well positioned to respond, especially given that some of the world's richest uranium mines are located in the Athabasca Basin, and potentially in the Thelon Basin.
According to a May 2005 report by the Asia Pacific Foundation of Canada funded by Canada's foreign affairs department, a global uranium shortage of 45,000 tons is expected over the next decade, as nations such as China and the United States look to nuclear power to meet rising energy demands.
Management
Titan Uranium Exploration's management team has extensive experience in exploration, mining and in successfully taking junior resource companies to market.
The company is led by President Philip Olson, M.Sc., P.Geo., who has over 30 years in mining and exploration experience. He was the previous VP of Business Development for Claude Resources (CRJ-TSX), Director of the Saskatchewan Mining Association, and is well-connected in the Uranium mining world.
Management credentials and experience can be found at http://www.titanuranium.com/s/Management.asp Titan also recently retained Dr. Roger Lainé to serve as the Company's independent Qualified Person in the preparation of NI 43-101 reports on the Castle North and South Projects. Dr. Lainé is an experienced uranium geologist having worked with Cogema Resources Inc. and its predecessor, Amok Ltd., from 1975 to 1989.
Technicals
With only a short history of trading since its June 2nd debut, price has shown the ability to move well in response to news, the result of a relatively tightly-held capital structure 12.6 million shares issued and outstanding, with a further potential 8.2 million available through warrants and options. The company has traded 6.1 million shares over its first 12 weeks of trading, surprisingly liquid for a new and relatively unknown company, suggesting strong interest is developing for their efforts.
Strong support is evident between the $0.65-0.70 area, with initial resistance at the top of the equilateral triangle formation, around the $0.77-0.80 area. A move through $0.85 would suggest a strong breakout has commenced, which would need to be accompanied by rising volume to be validated.
Summary
Titan is a well-structured and well-managed company offering an inexpensive way to position into the timely Uranium sector. Key attributes include:
- a drill-ready property that has had more than $5 million spent on it developing targets high grade boulder trains with samples up to 38% U3O8
track etch and radon gas anomalies prevalent on properties $3 million cash, or roughly 27 cents a share cash after a 50 cent financing a strategic land position in Nunavut's Thelon Basin, which already hosts Cogema's Kiggavik uranium deposit
in close proximity and on trend to the recent UEX discovery hole of 27.4% U3O8 over 8.8 meters
Our Model Portfolio acquired 50,000 units (50,000 shares and 25,000 warrants) at the $0.50 financing price back in June. The warrants exercise at $0.65 until December 2006, and trade under the symbol TUE.WT on the TSX Venture Exchange. We added 25,000 shares at an average $0.715 to the portfolio today, August 18th.
Titan website: http://www.u3o8.ca or http://www.titanuranium.com
Copyright © 2005 by Diversified Financial Solutions, Inc. All Rights Reserved.
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