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Strategies & Market Trends : Bosco & Crossy's stock picks,talk area -- Ignore unavailable to you. Want to Upgrade?

To: El Canadiense who wrote (9443)	5/6/2005 8:07:03 AM
From: Crossy	Read Replies (2) \| Respond to of 37387

re: Aflease Gold & Uranium (AFL.ZA) ZAR 375(Rand) total marketcap right now around $180m USD www.aflease.com As I said, I tried to diversify into URANIUM miners and of course attempted to do my homework first, by deciphering the important parameters where the industry derives its value.I did some comps of the producers (CCJ, ERA.AX, WMC, BHP) and found that the dedicated miners are valued pretty much for their "reserves in the ground", for around 40kg Uranium per USD ($) unit of marketcap... the higher this figure the cheaper the company.. well you must know that URanium prices have been firming very much recently from $7 to $26 - see www.uxc.com The overhang in supply from weapon grade material downblending, so called "secondary sources" is now gone. 40 new nuc plants planned in China alone, 2 to be opened per year going forward... I ran some comps and decided to invest into firms buying & building formerly abandonded mines that can be put back on production soonest so called "brownfield projects". The cheapest one is AFLEASE Gold & Uranium in SouthAfrica. You can get 1700kg of Uranium per dollar unit of marketcap there. it's traded in South Africa (AFL.ZA 375 Rand/ZAR), Germany (AFLJ.F €0.51 per share) and as an ADR (1:10) in the US. The ADR buys you 10 ordinary shares at $6,30 - ticker AFLUY.PK.. also good is Strathmore minerals.. there you get 950 kg per USD$ unit of marketcap.. Once these firms move to actual production you can expect a revaluation on a basis similar to CCJ or ERA in Australia - this would be a 10-20 bagger opportunity if it materializes.. If you recall, this is exactly what another Australian Junior Stock, Paladin Resources (PDN.AX) pulled off with their project to reopen the Langer Heinrich open pit uranium mine in Namibia - and PDN hasn't even commenced production yet ! Now the trick is to know when will production start ? On Strathmore I don't know exactly when a mine could restarted.. Canada and even more the US are very environmentally "concerned", so this process can take 5-10 years even to restart an old mine. South Africa is better in this regard. Aflease is planning to reopen their Uranium mines end of 2006 already. Plus this summer (end of June, Q2) they will commence gold production on their new lowcost high grade deposit. In the future gold assets will be spun out or sold leaving a pure Uranium play behind. They will also redomicile to Canada and get a listing soon. BMO is sponsoring a secondary listing of Aflease on the main Toronto TSX exchange, the "primary" market for uranium producers and explorers (like the AIM for upstream E&P firms) Aflease 10-20bagger opportunity stems from their resource base only (altogether more than 300000t of Uranium in the ground, partly certified, partly inferred - to be compared against a marketcap of $180m) - no exploration success would be required to record a material appreciation in its share price. And I get the feeling once their gold assets are spun off or even better - sold off, they might try to buy further uranium mines in other African countries.. Remember these former colonies once were the source for Uranium for the Brits and French.. a lot of old mines must still exist there. These are preferable targets as usually records from past production must exist. The only issue then is to get the resource base certified JORC (Australia or South Africa) or NIR (national instruments regulations for Canada) as soon as possible.. best rgrds CROSSY