🕐06.05.10 - 02:28 Uhr

The BottomLine Report: Global Uranium Leaps Back onto the Uranium Bull



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Global Uranium Leaps Back onto the Uranium Bull

Strategic Acquisition Vaults Junior Miner to Next Level

The wait is over�

Global Uranium (TSX-V:GU) has acquired one of the three largest uranium deposits in the United States.

The project has a long history. Millions of dollars of exploration have been spent over decades by major companies, spanning all three uranium booms.

Updated 43-101 completed and released this week.

The project is huge.

The economics are exceptional.

It�s a past-producing mine.

And the company�s CEO Neil Linder who negotiated the Crescent Mine acquisition for SNS Silver and raised $25M in the process, was able to get it for an incredible price. Global Uranium paid a fraction of what it�s worth, and more importantly with a little development work it will be worth more �� much much more!

The company is on its way to becoming a significant uranium miner very soon.

This has all the makings of a Bottom Line Report success. But let�s start at the beginning.

Right Time, Right Place

A short while ago Global Uranium was just one of many floundering junior mining companies. It didn�t really have much to offer potential shareholders. It was simply a company looking for an asset.

Well, they�ve found it�and it�s huge.

On April 16, 2010, Global Uranium announced it has entered into an agreement with privately-held Concentric Energy Corporation to develop the Anderson Mine Property (view press release here).

The Anderson Mine is a uranium development project in the uranium mining-friendly state of Arizona (and not near the Grand Canyon or Navajo land!!!!!). It offers everything a uranium development company could want.

First, millions of dollars of exploration and development work have been already been completed on the project. Since its initial discovery in 1955, more than 1300 holes have been drilled and $15M spent on the property. There was a final feasibility study completed on the property in November of 1978 just four months before the Three Mile Island Accident. Had Three Mile Island not occurred, this property would have been mined in the 1980s.

Most of the holes, more than 1300, were drilled in the 1970s by majors; Unocal and Urangesellschaft.

In 2006 Concentric Energy drilled 24 holes to confirm the accuracy of the Unocal drill data.

And what the new holes confirmed was that the old holes are accurate with over 35 million pounds of Uranium and at least an equal amount of Vanadium. The second key attribute of the Anderson Property � it�s huge.

The property contains a 43-101 compliant resource estimate of 34.5 million pounds of measured, indicated and inferred uranium having an in situ value of more than $1.4 billion.

The deposit also hosts a 43-101 compliant resource of 36.2 million pounds of vanadium. At market price of about $8 per pound, the vanadium adds another nearly $300 million to the in situ metal value of the project.

Also, the Anderson Property is proven to be a mineable resource. Not only is it a past producer that produced more than 32,000 pounds of uranium between 1955 and 1959 while uranium mining and the technology to do it was in its infancy.

But with modern mining techniques, its economics are even better. Unocal completed extensive metallurgical studies to confirm the uranium could be extracted by the ultra low-cost heap leaching method. The testing was successful and was recently confirmed by Minerals Advisory Group. In other words you can open pit mine the uranium and heap leach it.

In addition to all that, much of the resource is near-surface. Developing the Anderson Property into a mine is not like the big uranium mines in Saskatchewan with $1 billion+ shaft that needs to be constructed. The uranium is within 200 feet of the surface. As a result it can be essentially strip-mined like miners have successful mined coal for years.

Basically, the agreement gives Global Uranium the ownership of a big, highly-economic uranium deposit. And the market is about to figure this situation out. But it hasn�t yet. And that�s where the opportunity comes in.

Great Asset, Better Price

Global Uranium market is still trading for a significant discount to its intrinsic value. Here�s the breakdown.

Global Uranium has about 31 million shares outstanding on a fully-diluted basis. At a recent price of 50 cents per share, the company a fully-diluted market value of $15 million. It also has $400,000 in cash and no debt. The key here is that those shares are issued over the next 6 years.

Global Uranium does have to pay for its 70% ownership in the Anderson Property. As part of the deal Global Uranium has to issue 11 million shares over the next six years to earn a full 70% interest in the project.

So in the end, we�re looking at a company with a market value of less than $15 million including all long-term obligations.

But that�s where the value of the Anderson property comes in. As mentioned above, it has 34.5 million pounds of uranium. When it comes to uranium, the market usually assigns fair value of $1.50 per pound of uranium in the ground. So that gives the resource a fair market value of $60 million in uranium plus vanadium. Global Uranium�s 70% interest in that would be worth $40 million.

And of course, we can�t forget the Anderson property is near-surface, proven mineable, and it is highly advanced project which would likely increase that $1.50 per pound of uranium in the ground valuation.

On top of all that, don�t forget the 36.2 million pounds of vanadium. That has to add several million dollars to the value to the property.

So even under the most conservative valuation methodologies, makes Global Uranium market value more than 50% discounted to its resource value.

But there�s one more wildcard which could push the value of the Anderson property even higher. And that�s uranium prices which are at historical lows.

As the chart below from Market Oracle shows (original source), uranium prices are headed higher over the long run:

1 Company, 100+ Years Experience

Clearly, there�s some real potential here with Global Uranium. It�s going to take some work to develop that potential. But Global Uranium has assembled a team with more than a century of combined experience in mining and finance to develop the company�s assets.

Here they are:

Neil Linder, CEO and Director - Neil Linder has managed numerous companies from their infancy through to successful and vibrant market performers in their respective industries. One of Mr. Linders latest ventures was SNS Silver, in which he raised $25-million and raised the profile of the historic Silver Valley in Coeur dAlene, Idaho. Also on the private side, he structured and financed one of the earliest and best wineries in the Okanagan Valley, Blue Mountain Vineyards. Some of Neils other successful ventures have been: Insulpro Industries, which was bought by Masco Industries, a New York Stock Exchange-listed company; Healthcare Capita, which later traded on the American Stock Exchange; and International Hard Suits, which is a global leader in deep-sea diving and groundbreaking technology in the deep-sea exploration industry. Mr. Linder is a strong and effective team builder with contacts on all levels of operations and finance. Mr. Linder has raised over $150-million in working capital for companies with which he has had direct and non-direct involvement. His most recent foray was with Network Entertainment, which is the company that brought the critically acclaimed Facing Ali to Lions Gate Films and Spike TV.

George W. Heard, BSc, MBA, P Eng, President and Director - has over 27 years in the mining industry. He has successfully started four new surface mines and has managed projects in Africa, Indonesia, Brazil, Mexico, Canada and the US. As Mine Manager, Mr. Heard participated in the successful development of a coal mine Joint Venture between RTZ and BP in Indonesia.

Ann Fehr, CFO - is a certified general accountant with over 13 years experience in senior management. She has extensive experience providing financial management services and business planning for growing companies. Ann has worked in the mining sector since 2007 and is well versed in the corporate governance and regulatory financial reporting for publically traded companies. She has a strong project management and construction background which was developed during her 8 years in the real estate industry.

David Greenway, Director - Mr. Greenway, president and CEO was highly instrumental in the acquisition of the Crescent Mine in The Silver Valley in Coeur d�Alene, Idaho and the subsequent staged divestment of the asset to United Mine Services. David has played an integral role in multiple capital raises that have allowed the company to both advance the Crescent Mine to development status, and most recently, procure the Emerald Lake gold project from Northern Nickel and Scorpio Gold corp.

Chester Shynkaryk, Director - was founding president of Golden Queen Mining and Visionary Mining Corp. He is currently a director of Golden Queen Mining and a director of Vision Coatings.

Stuart Tennant, BSc, P Geo, Director - has over 40 years of mining experience including 23 years with Placer Dome and 4 years with Anglo-American corp. He has also worked over 10 years as a consultant for Western Canadian mining companies, from the exploration to the production stages, e.g. Gilbraltar (near Williams Lake, BC) and Equity Mining (near Huston, BC).

Jacqueline Collins, BSc, Corporate Secretary - is a Securities/Corporate Finance Paralegal with over 21 years experience as a legal administrator, corporate secretary and paralegal at both independent and national law firms, and with public resource companies. She specializes in the preparation, finalization and filing of all securities documents for US and Canadian foreign and domestic issuers with Canadian and US securities regulators, including all continuous disclosure documents. Ms. Collins is Corporate Secretary for Brazilian Diamonds Limited, Columbus Gold Corp., Alto Ventures Ltd. and Forum Uranium Corp. She is also the legal administrator and corporate secretary for the Hamilton Resource Group and Consolidated Global Minerals Ltd.

The Bottom Line

In the end, Global Uranium is pretty straightforward deal.

You get a huge uranium property that�s near surface, has exceptional economics, is a past producer, has proven successfully-mineable in metallurgical testing, and has years of development work already done on it with over 1500 drill holes.

More importantly, you can get it all at a 50% discount to its real value using a very conservative valuation methodology.

Follow Global Uranium (TSX-V:GU) ongoing development at

Click Here for a Free Real-time Stock Quote on TSX-V: GU


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