DESCRIPTION: Mega Uranium Ltd. is a rapidly growing and internationally diversified mineral resources company with a successful track record of obtaining quality uranium deposits and uranium prospective properties worldwide. The company has uranium resources in Australia, Canada, Argentina, Colombia and Cameroon. Mega is currently advancing its Lake Maitland uranium project in Western Australia to production.
The information provided below is based on the most recent information we have received from analysts, newsletters and other contributors to Streetwise Reports' The Gold Report or The Energy Report. We encourage you to visit the company's web site and call the company for more specifics on this company before you decide to invest.
"Mega has the Lake Maitland project in Western Australia. . .where a significant proportion of [its] assets are located. The company has good partners in a Japanese consortium, which owns about 35% of the asset at Lake Maitland. Mega provides people with exposure to a near-term uranium producer that has a significant support base in terms of these partners. I think that's one of the more favorable new projects in Australia. We anticipate production maybe in 2013. It would be a lower-cost producer, probably in the high $20s in terms of USD per pound of production. [Lake Maitland would produce] about 1.65 million pounds. . .Their second main asset in Australia is Ben Lomond, up in far northern Queensland. . .it's got potential. They've got a bunch of other exploration plays around the world, particularly in Canada."
View Entire Article: Geordie Mark: Glowing Reviews for Uranium Plays
Geordie Mark, Haywood Securities
(07/20/10)
"Mega has the Lake Maitland project in Western Australia. . .where a significant proportion of [its] assets are located. The company has good partners in a Japanese consortium, which owns about 35% of the asset at Lake Maitland. Mega provides people with exposure to a near-term uranium producer that has a significant support base in terms of these partners. I think that's one of the more favorable new projects in Australia. We anticipate production maybe in 2013. It would be a lower-cost producer, probably in the high $20s in terms of USD per pound of production. [Lake Maitland would produce] about 1.65 million pounds. . .Their second main asset in Australia is Ben Lomond, up in far northern Queensland. . .it's got potential. They've got a bunch of other exploration plays around the world, particularly in Canada."
View Entire Article: Geordie Mark: Glowing Reviews for Uranium Plays
Patrick Donnelly, Salman Partners Inc.
(07/06/10)
"We have removed the previously proposed resource tax from our Mega financial model and inputted our previous tax and royalty assumptions, which are as follows:
A federal tax rate of 30%
A Western Australia royalty (on gross uranium sales)of 2.5%.
After incorporating our tax and royalty assumptions into our financial model, our MGA NAV increases to CDN$1.27/share from $1.08. . .after rounding up, our new target price becomes CDN$1.30/share from CDN$1.10. We believe the revision of the proposed mineral resource tax is a very positive development for Mega Uranium, given that implementation of the previous version could have resulted in Mega's JV partners, JAURD and ITOCHU Corp., walking away from Lake Maitland. . .the change in the stance of the Australian government removes a significant hurdle to the project."
Stefan Ioannou, Haywood Securities
(06/30/10)
"We are lowering our 12-month target price for Mega Uranium to $0.80 per share from $1.30 following modification of our spot and long-term uranium price assumptions, and changes to our foreign-exchange assumptions. Our DCF 12 analysis of the Lake Maitland Project in Western Australia and consideration of exploration projects and other adjustments bring our total corporate NAV to C$198 million. Applying a P/NAV multiple of 1.0x imparts a 12-month target price of $0.80. We maintain our SECTOR OUTPERFORM rating and speculative risk profile for the company."
Patrick Donnelly, Salman Partners Inc.
(05/17/10)
"Friday, Mega released financial results for the quarter ending March 31, 2010. . .[reporting] a loss of Cdn$0.06 per share. Most of the loss (Cdn$0.04 per share) was due to the company writing off the book value of its South American assets. . .and its Keefe Lake project in northern Saskatchewan.
Recall that on May 3, 2010 the Australian government announced a [proposed] new resource tax on mining companies. . .we have decided to be conservative and incorporate the proposed tax rate (40%) into our model.
Given that our target price for Mega Uranium is now Cdn$1.10, we continue to favor investing in the company for the following reasons:
Mega should be able to finance the capital costs of the Lake Maitland project. . .without having to raise any more cash. We estimate capital costs to develop the project are ~US$119M, of which Mega's share (65%) should be ~US$77M. The company has ~Cdn$60.2M in cash and cash equivalents. We also note that Mega is due to receive an additional US$40M–US$49M from its partners upon favorable results from the Lake Maitland feasibility study.
We continue believe that Mega has a strong technical team. . .[and] have confidence in the company's ability to develop the Lake Maitland project on time and on budget.
While our target price is now at Cdn$1.10 per share, the shares of Mega Uranium are exceedingly cheap, trading at a discount of 61% to our target price. We believe that the timing is right to take a long position in the shares.
As our target price is now Cdn$1.10, per share we are maintaining our BUY recommendation."
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