URANEX kinda looks promising..

A couple of weeks ago Deutsche Bank bobbed up with a Buy on Uranex – the same mob that Stokes is punting on.

MD was amused to see the research note titled "Getting in Early".

No latecomer tag for this broker – it is getting in on the ground floor!

Could someone please tell Deutsche that the uranium boom has been running for a couple of years now? And Perth-based Uranex, a spin-off from Goldstream Mining, listed in October 2005.

The company is exploring for uranium at the Bahi prospect in Tanzania and Thatcher Soak in Western Australia.

The latter prospect has the obvious hurdle of being located in WA, where Premier Alan Carpenter is still firmly opposed to uranium.

And it is remote, being further inland from BHP's Yeelirrie project, to the east of Meekatharra.

But it does have at least one thing going for it: a resource estimate.

BP discovered the deposit in 1972 and calculated 6000 tonnes of uranium oxide.

However, different assaying techniques gave a resource as big as 15,000t (15 million tonnes of ore grading 1000 parts per million yellowcake), Deutsche Bank notes.

"In our opinion, one of the most appealing features of the Thatcher Soak deposit is that around 80% of the carnotite deposit is located within 6m of the surface," the broker says.

This provides the opportunity for the company to achieve "very low" mining and development costs, compared with competing deposits, it reckons.

The broker has a 12-month price target of $3.05, compared with the recent share price of $1.63.

Critical to Uranex's fortunes is an 8000m drilling program that started May 8 at Thatcher Soak. It will investigate the quality of the deposit and explore for extensions.

The other determining factor, of course, is the uranium price.

No fears there, according to yet another investment bank – Australia's own Macquarie.

The latter reckons that uranium will peak at $US150 per pound in late 2007, up from a record $125/lb in mid-May.

The window of opportunity could shut relatively quickly, though.

By the end of the decade, Macquarie expects the market to have moved into surplus as new supplies from Kazakhstan, Africa and Canada come onstream.

Still, that gives another six months, at least, of rising uranium (and share) prices for the Johnny-come-lately brigade.