URANIUM MELTDOWN
The fall-out from the natural disaster that engulfed Japan and, in particular, the real and present danger
of a severe nuclear leakage from one of the three crippled nuclear reactors at the Fukushima Daiichi
Nuclear Power Station battered uranium stocks yesterday, and could continue to impact the sector
again today.
Look at the carnage inflicted on the uranium stocks yesterday:
Selected Uranium Stocks
% Change
Close from Prev
Company Symbol (03/14) Close
Cameco Corporation CCO-T $31.70 -12.7%
Denison Mines DML-T $2.48 -22.3%
First Uranium Corp. FIU-T $0.82 -14.6%
Mega Uranium Ltd. MGA-T $0.55 -27.6%
Paladin Energy Ltd. PDN-T $3.67 -21.2%
Purepoint Uranium Group PTU-V $0.33 -29.8%
UEX Corp. UEX-T $1.45 -22.5%
UR Energy Inc. URE-T $1.76 -27.6%
Uranerz Energy Corp. URZ-T $3.12 -18.8%
Uranium One Inc. UUU-T $4.31 -27.7%
Uranium Participation Corp. U-T $7.01 -16.0%
Timing, of course, is everything. But, in our opinion, the events unfolding in Japan and
their impact on global markets are, in essence, a temporary phenomenon. The problems
will be dealt with, and Japan will move forward with its reconstruction.
In our opinion, the present scenario offers a tremendous investment opportunity to
purchase shares in a group that had been “on a tear” over the past 6-12 months, and one
in which the long-term fundamentals have not changed, despite this unfortunate set-back.
The world dealt with Chernobyl and Three Mile Island, and it will deal with Fukushima
Daiichi.
eResearch Corporation
56 Temperance Street, Suite 501
Toronto, ON M5H 3V5
Toll-Free: 1-877-856-0765
-2-
eResearch recently published a report on Purepoint Uranium Group Inc. This junior
uranium exploration company offers exceptional, albeit specualtive, long-term value as it
ramps up its drill program over the next 12-18 months, and solidifies its recent
agreements with Rio Tinto plc and Cameco Corporation.
Andrievski Asset Mangement certainly thinks Purepoint offers value. This specialist
manager of open architecture investment portfolios in the natural resources sector is
based in Russia, has a major office in Zurich, Switzerland, and representative offices in
many other countries.
Andrievski holds a 17.94% interest in Purepoint (14.14 million shares) and announced,
recently, that they intended to raise this to 25%. With 1,962,000 shares traded yesterday,
and as low as $0.26, perhaps they were judiciously taking advantage of the share price
weakness to build towards its goal. Just speculating!
We strongly recommend the shares of Purepoint Uranium Group as a Speculative Buy to
risk-tolerant investors. Our 12-months Target Price is $0.95. The last 12-months high-low
is $0.74 - $0.07.
Bob Weir, CFA and Managing Director, Research Services