The Energy Report - U3O8 Corp. TSX.V: UWE

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U3O8 Corp.

TICKER: TSX.V: UWE

DESCRIPTION: U3O8 Corp. is a Canadian uranium exploration company focused on the Roraima Basin in Guyana—a geological look-alike to Canada's Athabasca Basin, which contains the world's largest uranium resource. With a discovery-oriented team and solid cash reserves, the company's near-term prospects focus on validating and expanding prior discoveries for basement-hosted uranium while exploring the potential for significant unconformity deposits. U3O8's initial uranium resource has the potential for considerable growth.
WEBSITE: http://www.U308corp.com

The information below is based on the most recent information we have received from analysts and the companies participating in The Gold Report. We encourage you to visit the company's web site for updates.

Event

U3O8 Corporation provided on Wednesday an update of 2009 exploration plans for its 1.3 million hectare project in Guyana. A C$3 million exploration program, including 6,000 meters of drilling, is to commence shortly. The program is largely targeted at testing albitite-hosted uranium targets around known zones in the Kurupung Batholith. A small portion of the program will advance investigation of the property's potential for Roraima Basin unconformity-related uranium mineralization akin to that in the Athabasca Basin.

Impact – neutral

U3O8 We view the exploration potential of U3O8's project in Guyana highly, as we do the capability of management to realize that potential. Balancing this positive view is the reality of dwindling working capital and low expenditures on investor relations.

Valuation and action

U3O8 We apply a mean peer EV/lb multiple of C$2.59 to the known 7.1 million pound U3O8 Aricheng global resource to generate a C$18.5 million project NAV. We attribute nil value to unconformity targets despite significant 'blue sky' potential. We apply a 0.7x target multiple to generate a C$0.90 per-share target, decreased from C$1.00, as working capital declines. We are maintaining a SPECULATIVE BUY rating given a 137% projected return. U3O8 is trading at 0.1x project NAV and 0.5x corporate NAV.
-ERIC ZAUNSCHERB, CANACCORD ADAMS (08/06/09)

"U308 Corp. controls a large land position in the Roraima Basin, a sedimentary basin with similarities to the Athabasca Basin in northern Saskatchewan. Exploration in the 1980s demonstrated that the basement rocks that underlie the Roraima sedimentary rocks are locally enriched with uranium.

We believe spot uranium prices have bottomed and we anticipate a resurgence of interest in this sector over the year. U3O8 Corp has technically competent management, trades at cash value with an existing 6.5mmlb U3O8 deposit to explore. We are formalizing our coverage of U3O8 Corp while the small cap uranium exploration sector is coming back into favor with a Buy recommendation and a C$1.00/share 12-month target price based on a cash/resource multiple valuation method.

The company has already delineated what appear to be two small near-surface resources at Aricheng North and South, totaling 6.5mmlb. There is potential for this to grow much larger through additional exploration over the next two years. We note that it is easier to expand a known resource than find a new deposit."
-GEORGE TOPPING, BLACKMONT CAPITAL (05/28/09)

GT: "It is one of the better quality juniors. I know management; I’ve met them several times. I’m not sure how much cash they have now, but you could describe them as a cash-rich junior with good management.

TGR: . . Where are U3O8 Holdings’ assets?

GT: Guyana. They have a small resource, 5.8 million pounds, already delineated. That’s the hardest bit, you know, getting the first resource. It’s easier from then on to keep drilling it and build it out."
- The Energy Report Interview with George Topping (04/02/09)

"U3O8 Corp. has provided the assay results from an additional six drill holes in an exploration update from drilling on the Aricheng South zone, Kurupung Batholith, Guyana.

Drilling to date has been focused on basement-hosted uranium mineralization. U3O8 Corp.'s second exploration thrust is to test the unconformity between ancient basement rocks and younger overlying rocks of the Roraima Basin—an analogous situation to that found in the prolific Athabasca Basin in Saskatchewan.

U3O8 Corp. management has done a commendable job advancing the original exploration concepts that they generated, into tangible results. Drilling in 2008 has contributed to a database on the Aricheng South and Aricheng North zones that will now yield initial NI 43-101 compliant initial resources.

U3O8 Corp. is currently trading at -0.9x project NAV, up from -3.1x in December 2008. We apply a target 0.3x target project P/NAV multiple to generate our C$0.70 price target. This price target yields a 119% projected return, which justifies maintaining a SPECULATIVE BUY rating. We recommend purchase to risk tolerant accounts seeking exposure to the imminent release of the initial resource estimates for Aricheng South and Aricheng North, as well as the potential discovery of a geological analogue to Saskatchewan's Athabasca Basin."
- Canaccord Adams (01/13/09)

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