CTS - Contact Resources

[Sean K]

CTS have a uranium project in Peru which has just released an inferred resource of about 1 m tns @ 0.32% U3O8, with a 400 ppm U cut off. Project is open at depth and along strike.

Don't know too much more about them at this stage, but this looks interesting.

More to follow.

 

[greenfs]

Someone who has proven very reliable for me in the past & presumably close to management today has suggested that there may be more good news on the way. Not sure when though. I will closely monitor trading volumes which should help any interested parties through the maze with this stock

 

[Sean K]

Someone who has proven very reliable for me in the past & presumably close to management today has suggested that there may be more good news on the way. Not sure when though. I will closely monitor trading volumes which should help any interested parties through the maze with this stock

Thanks greenfs, Look forward to hearing more info when you get your hands on it. Is this friend a broker? Geologist?

This has been off my radar since I first posted (watching too many things) and I haven't seen any more news from Peru.

Chart doesn't say much at this point. Heading generally down but looks like it might be turning.

Will try to keep an eye on it more myself. I hadn't considered Peru being a U producer. Just a nice place to go travelling!

 

[moses]

Someone who has proven very reliable for me in the past & presumably close to management today has suggested that there may be more good news on the way. Not sure when though. I will closely monitor trading volumes which should help any interested parties through the maze with this stock

Presumably the good news will simply be a confirmation of higher grades than originally expected, as per the presentation.

I wonder how they'll go getting the ore down from 4000m on dodgy Peruvian mountain roads; hope the trucks have good brakes!

 

[Sweet Synergy]

Looks like this is on the move. Has broken resistance with nice confirming vol

 

[blobbob]

m/c is currently $64million [inc oppies] has 80% interest in high grade near surface uranium deposit in Peru worth about $650million aud
undervalued ?

 

[Robroy]

CTS - The Speculator's buy of the week

David Haselhurst's Speculator column in The Bulletin magazine has picked CTS as its buy of the week:

The magazine hits the streets Wednesday.

I think the likely explanation for Tuesday's rise is this from another forum:

"Market reacting to Kyrgyzstan news where Urasia Energy & Uranium One have announced a JV. CTS is on the same strike with localised anomalies grading (0.1-0.7% Ur.) My calculations indicate a $2.5 NPV, not taking into account any upside."

Its alltime top of .70 is now just 1.5 cents away.

After that, a nice breakaway would seem to be a* possibility.

The Speculator bought the options BTW, though probably most readers won't have options accounts and will buy the shares.

 

[RichKid]

Re: CTS - The Speculator's buy of the week

David Haselhurst's Speculator column in The Bulletin magazine has picked CTS as its buy of the week:

The magazine hits the streets Wednesday.

I think the likely explanation for Tuesday's rise is this from another forum:

"Market reacting to Kyrgyzstan news where Urasia Energy & Uranium One have announced a JV. CTS is on the same strike with localised anomalies grading (0.1-0.7% Ur.) My calculations indicate a $2.5 NPV, not taking into account any upside."

Its alltime top of .70 is now just 1.5 cents away.

After that, a nice breakaway would seem to be a* possibility.

The Speculator bought the options BTW, though probably most readers won't have options accounts and will buy the shares.

Chances are it may rise further because of people buying on the tipsheet review, doesn't guarantee it'll keep rising. Further, the options are co issued so anyone can buy them without opening an options ac.

 

[kromey]

Robroy speculator mentioned CTS on the 5th of feb on the bulletins web site as well.

 

[ned1]

Here is the latest David Haselhurst "The Speculator" article from this weeks Bulletin.

The Speculator takes up arms for a small uranium miner with good prospects in the mountains of Peru.

This week we find an "el cheapo" uranium punt plus further gains in Image Resources from spectacular intersections of heavy minerals announced last week in Western Australia.

As this column has observed previously, most junior Australian uranium prospecting stocks appear grossly over-priced, given the political risks of developing any resource in the short to medium term. The same goes for those that have pinned their hopes on prospects in Third World countries.
The odds are worth an exception, however, for Contact Resources (ASX code CTS), with a relatively high-grade inferred resource in Peru, South America, and a relatively low market capitalisation compared to various of its peers listed on the ASX. I understand there are at least four Canadian juniors with enough confidence to be prospecting for uranium in that country and Contact's joint venturers are former employees of IPEN, the Peruvian government's nuclear authority.

Contact claims a JORC-compliant inferred resource of 1.03 million tonnes grading 0.32% uranium oxide (or 7.2 million pounds of U3O8). With uranium around a current spot price of $92/lb, Contact's 80% equity in the deposit has an inground-value of $530m.

Yet the company carries a market capitalisation of $53m fully diluted for all outstanding options. (Contact has on issue 53 million shares plus 49 million June, 2008, options exercisable at 20c. The stock has traded over the past 12 months from a low of 29c to a high of 70c and last week at 59.5c/60c.)
Contact was floated in 2005 as a small gold prospector in WA but it didn't make much of an impression until geologist Allen Maynard took the helm in mid-2006 as executive chairman. The company then negotiated the purchase from Range Resources of its 80% interest in the Corachapi uranium project in Peru. The consideration was set at $250,000 cash plus an issue of eight million Contact shares to Range, plus exploration expenditure over two years of $2m.

Uranium was discovered at the site in the 1970s, when IPEN undertook an extensive trenching program down to eight metres over the shallow mineralisation to establish the present resource.

The prospect is in high mesa country (4000m) with mineralisation extending from surface in four so far identified zones extending 1100 metres in strike length. Contact believes the project area has the potential to yield a resource beyond the present one million tonnes to between three and five million tonnes.

Recent field work has identified localised grades within the project area considerably higher than the average grade in the so far identified inferred resource. An example offered is 10.4 metres of 1.144% (25lbs/t of uranium oxide). That's equivalent to about 3oz of gold per tonne.
Two reverse circulation drilling rigs will be on site early next month to firm up the status of the inferred resource. The company has established an office in the capital Lima and appointed a Peruvian manager and two local geologists to manage the program.

Company consultant Jon Garvey said the company expected to complete its exploration commitment this year, with trial mining in early 2008 and an upgrade to full commissioning and mining in late 2008. Preliminary costing suggests an initial capital cost of under $10m for a two-stage crushing plant and heap leach pad with a mining cost as low as $5-$7/lb of contained uranium.
We've taken a punt on Contact options at 39c for the right to pay an extra 20c by June, 2008, for a new share. By that time, the company should have made a string of announcements to justify its expectations for the uranium play.
The company is also looking to seek a listing on the Toronto Stock Exchange later this year, where there is a lot more empathy for companies operating in South America.

 

[insider]

There is an article on CTS in this months Money magazine... sounds good will have to do some research on them and add to my watchlist...

 

[mmmmining]

CTS has purchased the 20% interest held by Peruians It claimed it will have 100% control of the project.

The term is the same as to Ranger, very interesting.

 

[Sean K]

I haven't been following this too closely the past few months after their inferred JORC resource upgrade ann of about 1.25m tns U in Peru. Or 9.16 m lbs. I note they've now bought out the other 20% so it's fully owned and they claim that they're aiming for production this year. Must be the only other Australian listed company to start mining this year. They also claim in their last ann that the resource has potential to be expanded. Looking at some of the historic drill holes outsdie the curent envelope, it looks highly likely. Market cap looks pretty low for a near producer. Does this look undervalued to anyone??

 

[mmmmining]

I haven't been following this too closely the past few months after their inferred JORC resource upgrade ann of about 1.25m tns U in Peru. Or 9.16 m lbs. I note they've now bought out the other 20% so it's fully owned and they claim that they're aiming for production this year. Must be the only other Australian listed company to start mining this year. They also claim in their last ann that the resource has potential to be expanded. Looking at some of the historic drill holes outsdie the curent envelope, it looks highly likely. Market cap looks pretty low for a near producer. Does this look undervalued to anyone??

Kennas, don't get carried too far away. I wish CTS can produce this year. But it is totally impossible, or a naive joke. The best shot is do a trial heap leach, this is all. I guesstimate this one as producer in 2009 or so.

Nevertheless, CTS is still a very undervalued company. If the management can put their acts together, it could be a very good investment.I put this one in my uranium holding, and be prepared fort the long run.

 

[Sean K]

Kennas, don't get carried too far away. I wish CTS can produce this year. But it is totally impossible, or a naive joke. The best shot is do a trial heap leach, this is all. I guesstimate this one as producer in 2009 or so.

LOL. I'm not getting carried away, just reading the 28 Nov 06 ann stating 'Aim for uranium production by end of 2007'. Maybe they are being a bit ambitious.

 

[YOUNG_TRADER]

Its now by far one the most undervalued advanced staged U companies

At 60c the mkt cap is like $65m, this is similar to the likes of PEN, GBE and even MRU who are just advanced staged explorers.


I say CTS is probably one of a few who could be in production by 2008

I bought some opies today

 

[MJSJ]

CTS currently looking at late 2008 for production - my guesstimate would be early '09 - it appears they may be behind schedule on their drilling program? (Anybody know anything??)
Peru valued at approx. $900M (USD) on current $95/lb.(USD) [without any upgrades] - with approx. 100M Shares & Oppies - says undervalued to me!!!
I guess we may know more when their Quarterly Report comes out in the next few weeks.

 

[exgeo]

from last ann they are still waiting on a permit to drill. Once they get it and start drilling, then the rotary lie-detector will reveal all. I am long CTS (at 60c)

 

[MJSJ]

Weekend Australian Article

Good article in the Weekend Aust. on CTS's Peruvian Uranium Project - Very positive - CHECK it out!!!

 

[Sean K]

Re: Weekend Australian Article

Good article in the Weekend Aust. on CTS's Peruvian Uranium Project - Very positive - CHECK it out!!!

Can you summarize it for us MJSJ?