Hathor Exploration (HAT : TSX-V : $1.86) - Speculative Buy - Target: C$4.50

Eric Zaunscherb

Comment: Beefing up as drills about to turn; C$4.50 target and SPECULATIVE BUY rating maintained

Hathor has appointed Dr. Michael Gunning as Chief Operating Officer and to the board of directors. Hathor has made a world-class uranium discovery in the Athabasca Basin but its share price performance suggests that it has not exploited this optimally. In our opinion, Dr. Gunning brings a great deal of experience and professionalism to the company, as does the recent appointment of John Currie, currently Executive VP and CFO of Lululemon Athletica (LULU : NASDAQ : US$31.83 | Not rated) and formerly CFO of Intrawest, as Chairman of the board of directors. Our valuation of the marquee Midwest NorthEast project is based on a DCF(10%) model of the Roughrider zone incorporating data from the feasibility study on the nearby Midwest project. One of the key inputs is the resource, which we set at 35 million pounds U3O8 based on our conceptual resource of 20 million pounds expanded for exploration success. We generate a total project NAV estimate of C$547 million, or C$5.43 per share. We appl
a 0.8x target project P/NAV multiple to generate our C$4.50 per share target. The 142% projected return supports a SPECULATIVE BUY rating. We recommend purchase of Hathor by risk-tolerant investors seeking exposure to the imminent resumption of drilling on the highly prospective Midwest NorthEast project

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