Denison Mines jumps after report praises Wheeler River project
Peter Koven, Financial Post Published: Friday, May 01, 2009
financialpost.com
Shares of uranium miner Denison Mines Corp. (DML/ TSX) moved up sharply yesterday, and it could be tied to a report from analyst Edward Sterck of BMO Capital Markets. He is very impressed with the company's 60%-owned Wheeler River project in Saskatchwan's Athabasca Basin.
Mr. Sterck wrote that the mineralization, host rock alteration and geological structure are very close to Cameco Corp.' s flagship Mc-Arthur River project, which is the largest high-grade uranium mine in the world.
"Exploration is at an extremely early stage, but the parallels with McArthur River are encouraging," he wrote in a note to clients.
He noted that the best drill result to date is four metres at 20% U3O8. The drilling has been done on a wide spacing over a strike length of 680 metres, with 1.6 kilometres still to be tested. At McArthur, more than 300 pounds of reserves were found in separate pods over a strike length of 750 metres, he noted.
Mr. Sterck noted that he views exploration as secondary to production when it comes to valuing Denison, but "BMO now believes these results are significant."
He has a "market perform" rating on the stock. His price target is under review. |
