SOURCE: Resource Capital Research

March 28, 2006 10:30 ET

Equity Research Report on Global Uranium Companies

SYDNEY, AUSTRALIA -- (MARKET WIRE) -- March 28, 2006 -- Resource Capital Research, an equity research company which focuses on small resource companies, today launched a major quarterly research report covering 22 global uranium exploration and development companies with a focus on Australia, Canada and the USA. Over 130 junior and mid cap explorers and development companies are identified with a total market capital exceeding US$7 billion.

The report reviews companies active in established uranium districts globally, including Australia, Canada, USA, Mongolia and Namibia. The report covers North American traded companies Fronteer Development Group (AMEX: FRG) and (TSX: FRG), CanAlaska Ventures (TSX-V: CVV) and (OTC BB: CVVLF), International Ranger Corp (OTC: IRNG) and Western Prospector Group (TSX-V: WNP). A feature article reviews surficial calcrete style projects which are driving valuations for a number of companies, namely, Paladin (PDN, development project, Namibia), Nova Energy (NEL, scoping study, WA), Redport (RPT, advanced exploration, WA), Uranex (UNX, advanced exploration, WA), and Extract Resources (EXT Namibia, early exploration).

To access the free summary report, go to www.rcresearch.com.au/feature. To purchase the complete 68 page detailed report titled "Uranium Sector Review" please email johnwilson@rcresearch.com.au

--  The spot uranium price is US$40.00/lb, an increase of 13% year to-
    date.
--  Forward indicators suggest the uranium price will reach US$54/lb in
    2006, an increase of 35% over the current spot price and US$58/lb by June
    2007, an increase of 45% from the current spot price.
--  Much of the "forward" curve, ie US$58/lb appears to be priced into
    shares that have current or near term production potential (next 3 years)
    and where sales contracts do not prevent spot market participation.
--  Our selection of 65 Australian uranium juniors is up 47% over 3 months
    and 96% over the past 12 months.
--  This compares with a selection of 90 Canadian uranium juniors, up 62%
    over the past 3 months and 104% over the past 12 months.
--  Australia-China uranium export deal: Companies with JORC resources
    will be of strategic interest to power utilities from China (and
    elsewhere). We understand that many companies have already commenced
    dialogue with Chinese investors.
--  A decision on development of Honeymoon (SA) by SXR is expected June
    '06.
    
Uranium Price Outlook

The spot uranium price is US$40.00/lb, an increase of 13% from the beginning of the year.

Forward indicators suggest the uranium price will reach US$54/lb in 2006, an increase of 35% over the current spot price and US$58/lb by June 2007, an increase of 45% from the current spot price.

These price levels are revised up from our December uranium quarterly which indicated a uranium price of US$40/lb (+ 35%) in 2006 and US$50/lb (+ 16%) by June 2007.

Market forecasts for the long term price of uranium are generally in the range of US$30/lb.

Company Activity

Much of the "forward" curve, ie US$58/lb appears to be priced into shares that have current or near term production potential (next 3 years) and where sales contracts do not prevent spot market participation.

PDN's (PDN) share price strength (A$4.37/share) discounts uranium price expectations of US$60/lb to US$70/lb.

ERA's (ERA) share price (A$13.41/share) appears to reflect a uranium price of US$30/lb. While we expect spot market prices to eventually flow through to ERA earnings, the company's share price appears to have been penalized in the short term relative to peers due to its existing sales contracts.

A number of juniors are advancing development projects. Equinox Resources (EQN) is positioned to produce by-product uranium from its copper project in Zambia by 2008. Berkeley Resources (BKY) has achieved an important corporate milestone, signing a strategic alliance with AREVA for BKY interests in Spain. OmegaCorp (OMC) is rapidly advancing its Kariba project in Zambia and Nova Energy (NEL) its Lake Way/Centipede project (WA). Ur-Energy (URE) announced large upgrades to target mineralization at its Wyoming ISL prospective properties.

PepinNini Minerals (PNN) completed a scoping study at Crocker Well (SA) and has good potential to expand JORC resources through 2006. Summit Resources (SMM, QLD) is expected to announce ongoing resource expansions in 2006.

Companies currently or soon to be drilling key targets include CanAlaska (CVV, Athabasca), Energy Metals Limited (EME, NT), Extract Resources (EXT, Namibia), International Ranger (IRNG, BC), Laramide Resources (LAM, NT); Mega Uranium (MGA, Argentina, QLD); Thelon Ventures (THV, NV); and Stellar Resources (SRZ) which has a number of IOCGU targets (SA).

Australia China uranium export deal An agreement between Australia and China that clears the way for uranium sales to China is expected to be signed early April '06. Chinese investment in Australian uranium juniors is likely to follow. Security of uranium supply is paramount to China's expanding nuclear power industry, and cost is a secondary issue.

Companies with JORC/NI43-101 resources will be of strategic interest to power utilities from China (and elsewhere). We understand that many companies have already commenced dialogue with Chinese investors.

Events of the past 3 months include:

--  Financial industry investors are continuing to build physical
    positions in uranium. viz., Uranium Participation Corp. and Adit Capital.
--  Recent IPO's include Toro Energy Limited (TOE, uranium interests of
    Minotaur and Oxiana), Encounter Resources (ENR) and Aurora Energy Resources
    (AXU) spin off of Fronteer Development Group's (FRG) Labrador uranium
    properties.
--  Canadian companies continue to expand in Australia. Mega Uranium
    announced acquisition of Hindmarsh Resources (HMR) and Laramide Resources
    is taking a significant ownership stake in Bullion Minerals (BLN). Further
    activity is anticipated.
--  A decision on development of Honeymoon by SXR is expected June '06.
    SXR recently raised C$147m for redevelopment of its Dominion Uranium
    Project (South Africa).
    

"Security of uranium supply is paramount to an expanding global nuclear power industry, and cost is a secondary issue. As such, the junior end of the market, particularly companies with code compliant resources will continue to receive a high degree of interest," says John Wilson.

About Resource Capital Research

Resource Capital Research (RCR) (www.rcresearch.com.au) was founded in 2004 and is based in Sydney, Australia. RCR provides investors with research on current investment opportunities in the mining sector both in Australia and globally. The focus is on small resource companies, ranging from exploration stage, through development and production. John Wilson, the principal of the firm and analyst, has nine years experience analyzing mining companies in Sydney and on Wall Street for major investment banks.

The report is available at www.rcresearch.com.au. The next uranium sector review will be published in the June quarter, 2006.

Contact Information

  • For further information please contact:
    John Wilson
    Analyst
    Resource Capital Research
    Phone: (+61-2) 9252 9405
    Email: Email Contact