MUR murchison united nl

broker note fairfax london

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    Murchison United* (MUU LN) market cap $11m is changing its name to Forte Energy*.



    The name change reflects the strength of the company’s uranium prospects in Mauritania and Guinea. Management completed a ‘landmark’ deal with Areva the French Uranium business earlier this year where Areva input cash, data and resources into the business along with an implied ongoing commitment of support.
    Murchison also announced the appointment of Lady Barbra Judge who is currently chairman of the UK Atomic Energy Authority. Lady judge’s involvement in the business suggests to us that the uranium prospects contained in the License areas are of substantially greater interest than the average exploration project.
    Areva is supporting the company with cash (A$2.7m) and important drilling and exploration data on the licenses in return for a 5% stake in the business. Areva’s ongoing support and its technical assistance should accelerate the development of key projects and could result in the fast tracking of some new areas for potential mine development. It is likely that the company will move to form a joint venture with Areva following the development of a JORC resource on one of the Mauritanian prospects. The former discovery of some very high grade uranium drill results encourages our expectation for rapid progress in the region and in the company’s further corporate development.
    We strongly support Management’s efforts to advance the exploration effort and look forward to news of further developments. The company has cash funding for its work program covering 5,000m of drilling in Guinea which is targeting a JORC compliant resource estimate at the Firawa uranium prospect.
    We recommend investors take a close look at the company. We believe Forte Energy is well placed to demonstrate value in its uranium prospects and should, in time, develop substantial value in this area.
 
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