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 |   Tue Apr 10, 2007
Gold Mining Stock Report
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| | Bitterroot/Cameco Find Uranium...Just Not Enough Of It
Last evening Bitterroot (BTT.TSXV/$0.72) and joint-venture partner Cameco Corporation announced that uranium had been encountered in their recent seven-hole drill program in Michigan's Jacobsville Basin. The amounts reported were a 0.6 meter interval containing 75 ppm U, including two 0.12 meter intervals containing over 100 ppm U. History suggests that a stock is in trouble when any commodity is being reported in parts per million, and Bitterroot sold off hard on the news, trading as low as $0.66 on volume in excess of 1.2 million shares in the first hour.
The market reaction notwithstanding, the important takeaway from the release was the following sentence: "These intervals are considered to be significant as they confirm that uranium-bearing fluids have been active in the Jacobsville Basin." This is in line with my most recent comments (#400 - 4/5), which I highlighted at the time and will do so again today: "Discovering any uranium in the recent drill program, however low grade, will be a major success, one that strongly implies that a uranium deposit remains to be found in close proximity." The partners have a commanding land position in the Basin, 350 square miles, and finding any uranium in the first drill program is, as the partners say, significant. Any review of the recent volume in Bitterroot must conclude that speculators took control of the BTT market in recent days, and today's news has served to flush them out of their long-term (overnight, possibly even over the weekend) holdings. To those who have asked in recent days if Bitterroot was a buy, to which my answer was no, today the answer is yes. The speculation is being removed from the stock, the chart has returned to breakout levels, and encouraging results from this first pass at exploration will be followed up in the fall.
In the meantime, BTT has three other active exploration programs underway, the company is well financed, and it has a modest market capitalization-$25 million less than at this time yesterday. I don't recommend buying into momentum trades, such as developed in BTT in recent days, but I'll happily suggest that owning some BTT on today's selloff is likely to be looked back upon as a good idea. Today's news wasn't good enough to keep the BTT market momentum play alive, but it will bring Cameco and Bitterroot back to Michigan in the fall. It also puts them in a much better position to improve on the initial results. Buy some stock from those who apparently think that mines are found in the first round of drilling. www.bitterrootresources.com. |
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