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Precious Metal Quotes from KITCO

Tuesday 2 August 2011

Unity Is Spinning Outta Control!!!

Unity Energy Corp  UTY.V

SP: $0.35
S/O: 21.26 Million
Market Cap: $7.4 Million
http://unityenergycorp.com/

Initiating coverage @ $0.35
Rated: Strong Buy
Discourse: Ownership of Stock

Has there ever been a more perfect time to invest in uranium? For those that missed the initial uranium rally earlier this year before Fukushima there is a “second chance” Unity Energy is aggressively developing there properties. This 7 million dollar company has the potential to be the next big developer in the Athabasca Basin. 

They are also spinning out a key gold asset in northern Saskatchewan. Never has there been a better time to buy uranium stocks and Unity in particular. In the words of their commander in chief  “Positive results indicated at Dickens Lake justify this gold asset creating its own market and raising funds for further exploration and to add shareholder value. Unity Energy's roots shall remain grounded in energy through exploration of its significant portfolio of prospective uranium properties in the Athabasca Basin." - Anita Algie President and CEO Unity Energy.

Uranium is going to get hotter than Fukushima  


The longer term fundamentals of the sector remain solid and many countries have publically stated their strong continued commitment to nuclear energy.

 
The uranium spot price looks like it is just about to break out again, the current price is $54 a pound, a far cry from this years high of $75.00, so if you missed round one on the uranium breakout this is the “second chance” we all hope for but never seem to get.
 
The power hungry citizens of China and India don’t care where the energy comes from they just want it, China has 25 nuclear reactors under construction and India is the cutting edge leader in developing Thorium based reactors, With oil once again rocketing Uranium stocks have never looked so cheap. 

 
Recently I have started to notice consolidation in the uranium sector, Bannerman Resources (BAN:TSX) recently has had a offer from a Chinese uranium company to buy them out.
 
Investors have realized that modern nuclear technology is safe and reliable, the mishaps that happened in Japan are all due to mismanagement and there poor safety record, At a meeting of the G8's Nuclear Safety and Security Group, held in Tokyo in 2008, an IAEA expert warned that a strong earthquake with a magnitude above 7.0 could pose a "serious problem" for Japan's nuclear power stations, In March 2006 the Japanese government opposed a court order to close a nuclear plant in the west part of the country over doubts about its ability to withstand an earthquake. Japan's Nuclear and Industrial Safety Agency believed it was "safe" and that "all safety analyses were appropriately conducted"
 
I believe that Unity Energy will eventually become a household name such as Hathor or Fission with the same or more potential.

 
Are you in it for the Green or the Gold?
 

Unity has the perfect combination! Uranium and Gold, I believe they both hedge each other out perfectly! Unity recently decided to spin out there Northern Saskatchewan gold project, into a new venture called Patrone Gold. I believe this is a great decision, the company is not getting any value for the gold properties, the recent spin out of Prophecy is a great example of a successful spin out, (NKL:TSX). Everyone knows about the uranium projects, but the golden question is who knows about Unity’s GOLD PROJECT IN LA RONGE GOLD BELT? Unity completed a VTEM survey of the Dickens Lake Project and final results and interpretation are expected in the near term This gold district has produced 600,000 oz in the past, The Dickens Lake Gold Project is getting NO value right now with current valuations,expect the stock to rocket when it starts trading.

Time to pick your favorite lake.
Waterbury Lake? McKenzie Lake? Close Lake? Lampin Lake? Thorburn Lake?  Hoppy Lake?  Kirkpatricks Lake?  Dickens Lake?


At least
if the uranium mining business collapses Unity shareholders could profit from luxury lakeside condos!

The lake that interests me the most is Thorburn, the property is surrounded by Cameco claims and it is very close to Hathor’s Roughrider Zone. Surrounding companies have drilled with tons of success, uranium has been found in percentages as high as 10% over 9 meters in surrounding areas. Preliminary ore reserve calculations indicate that the project contains approximately 5 million pounds of uranium as a area is defined expect this number to rocket. The Thorburn property is 14.5km south east of the world's largest and highest grade uranium mine,Cameco’s Cigar Lake mine.

Surrounding Drillholes of Interest:

  • 4m at 3.5% U
  • 44.50m at 2.0% U
  • 9.90m at 10% U
  • 10.40m at 7.0% U
As you can see these grades are VERY high clearly there is mineralization running through the property. The geology is very similar to the large uranium deposits that are found in the Athabasca basin. 
 
Athabasca Basin 101
So investors unfamiliar to uranium are probably wondering what the hell is the Athabasca Basin? Why should I care about this Basin? Where is it? 
 
The
Athabasca Basin is in northern Saskatchewan, it is 100,000 km squared. The Athabasca Basin accounts for 30% of the world's uranium production. The area currently hosts reserves upwards of 650 million pounds of uranium. 
 
The Athabasca Basin is host to unconformity-associated type Uranium deposits. Mineralization occurs at, above or below the unconformity. This area is largely controlled by AREVA and Cameco, although currently there are 20 or so Juniors drilling and outlining deposits. Unity has key properties in all the right places, they are a area play to Fission and Hathor, they are also conveniently located near Cigar Lake. Cameco as a large scale producer will only buy out the largest deposits, companies like Hathor and Fission need to increase their
deposits sizes and land holdings in order to catch the attention of Cameco and AVERA.

Infrastructure points of outlining a uranium deposit in the Athabasca Basin
  • Ample power supply nearby
  • Easy access to mine site from road
  • The Athabasca Basin is the hub for all uranium core sample testing
  • Abundant water supply
  • A workforce that is highly experienced in developing uranium deposits

 

Anita’s Running A Tight Ship 

When I first got involved with Unity, the key reason that got me interested was the share structure, this company has a tight float with only 21,142,000 shares outstanding and a market cap of around 7 million dollars this thing can move really hard and when  there are any indications of serious mineralization this stock can easily go up 10x and still have a market cap lower than Fission and Hathor. Another key point I would like to put out is that  49 North (FNR:TSX) owns 2,490,000 shares or almost 12% of the float. 49 North is a Saskatchewan based resource company, when it comes to knowing the right plays in Saskatchewan I would trust them to know what is best in there own back yard.

 
Another point I would like to mention is that Unity has never done any dilutive financings, all financings have been higher than the previous financings or the same, the company recently did a PP that just came free trading which shows in the stock because the recent financing was almost 18% of the float.

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