Powertech Uranium Corp.

Powertech Uranium Corp (TSX:PWE), (FSE:P8A) & (NAS:PWURF)
Share price: CAD 4.01 (mar 23, 2007)
Number of shares: 32 million
Market cap: CAD 129 million
Resources: 17.2 mio. lb (NI 43-101 Inferred and historical)
Price per pund U3O8: USD 7.5
Estimated production start: Late 2009
Estimated production output in 2010: 2 mio. lb (rising to 3-4 mio.)
Estimated revenue 2010 (U3O8 = $95) : USD 190 mio.
Estimated production costs per lb: $ 24
Estimated profit 2010: CAD 166 mio (USD 142 mio.)
Price target 2010 at p/e 10: CAD 27.7 (60 mio. shares)
Price target at U3O8 in ground (10 USD per pound): CAD 6.29
12 month price target: CAD 9 (upside 124 %)

My analysis

I like Powertech’s management and technical team. I like their plans to produce in 2009 and the yearly peak production of 3-4 mio. lb. Powertech hosts deposits with average grades of 0,21 % which is high for ISL mining. They have a low resource base of 17.2 mio. lb. but they are expected to expand that resource estimate to 30 mio. lb., which will expand the production time by 3 years. I find Powertech a cheap uranium explorer and near term producer with lots of upside.

Note that my analysis is without taxes and without any risk price reduction, which make it difficult to compare this analysis with others who use them. Use my analysis to compare the different companies and their production and resources estimates. And please don’t forget to do you own due diligence.

Powertech Uranium corporate presentation:

Powertech Uranium Corp. is a mineral exploration and development company that was formed to develop low cost uranium properties with the shortest lead time to production.

The company is targeting North America and focusing on projects amenable to In-Situ Recovery (ISR) mining methods. The company presently holds the Dewey Burdock uranium deposit in South Dakota and the Centennial project in Colorado, two advanced stage projects with historical uranium resources totaling more than 17 million pounds of U3O8.

The company also holds two exploration projects in Wyoming known as Dewey Terrace and Aladdin. Both projects have known uranium mineralization as defined by previous drilling and have significant exploration potential.

The company has experienced management and a well qualified technical team with more than 200 years in all aspects of the uranium industry from exploration, permitting, designing, building, and operating ISR mines.

More information on Powertech Uranium Corp.
Read Sweden's Jordan Fund's analysis on Powertech, Loparn's analysis with 2007 price target at CAD 7.40 and this blog post about Powertech as a possible take over target for Uranium One.