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Uranium Resources’ Mtonya project could be a company maker, says WH Ireland
Uranium Resources (LON:URA) presents very substantial upside potential, according to broker WH Ireland.
In a note to clients today, WH Ireland analyst Tom Elder said that the firm’s Mtonya project could be a significant and ‘company making’ project, if it proves to be similar to Uranium One’s Nyota deposit which is in a similar part of Tanzania.
“(The) Mtonya project is interpreted to be on the same incipient rift as intersects Uranium One's large Nyota deposit,” Elder said.
He added: “In the event Mtonya proved to be of a similar magnitude/grade to Nyota there is clearly a prospect of a significant and company making discovery.
“The company's internal exploration thesis is in our view realistic, reasoned and justified - and appears to be vindicated by exploration results thus far.” The analyst notes that drilling on Mtonya has already confirmed the presence of anomalous uranium.
He explains that the exploration project is found within the Karoo Supergroup of sediments. Such sediments host numerous uranium deposits in southern and eastern Africa – including the 65.5 million pound Nyota project, as well as Paladin Resources's 32.5 million pound Kayelekera deposit.
Elder presently sees the chance of Uranium Resources achieving significant exploration success as clearly speculative. And he says that while he has avoided giving a valuation for the stock, its upside is ‘potentially of a very substantial magnitude'.
