ferrets stock to watch: globe uranium limited

Ferrets Stock to Watch: GLOBE URANIUM LIMITED
08:45, Monday, July 02, 2007

WA URANIUM EXPLORER NOW IN AFRICA AND ARGENTINA

Sydney - Monday - July 2: (RWE Aust Business News)
**************************************************

OVERVIEW
********

Uranium stocks are still favourites on the mining speculative
front with explorers currently expanding around the globe.

One good example is Globe Uranium Ltd (ASX:GBE), now aptly named.

Last week Globe Uranium reported its first-ever drilling results
at its Kanyika uranium project in central Malawi.

It has intersected widespread uranium, tantalum, niobium and
zircon mineralisation, extending from surface to at least 60 metres
depth.

The company has congratulated its exploration team on the
discovery, given that the tenements were granted less than 16 months ago
and there was no previously recorded uranium within the tenement.

"Exploration at Kanyika is at a very early stage," said managing
director Mark Sumich.

"These results are from the first batch of some 60 holes to be
drilled this year," he added.

A diamond rig will also soon arrive on site, which will add
important information on the distribution and nature of the
mineralisation and host rocks.

On completion of the initial phase of drilling at Kanyika, the RC
rig will head north to the company's Livingstonia project where it will
test the Kayelekera type sandstone-hosted uranium targets with 5,000m of
drilling, before returning to Kanyika.

"The company is now in a very strong position - we are well
funded and in a position to aggressively pursue the Kanyika uranium
project as well as our other opportunities in Malawi and Argentina
through 2007 and beyond," Mr Sumich said.

"This gives us a great deal of confidence in the outlook for the
company."

Meanwhile Perth-based State One Stockbroking has released a
review of Globe Uranium and has a target price of $2 against the present
market price of 78c.

Surprisingly, the market seemed to miss the implications of the
last report from the company.

Globe seems pretty confident about its prospects.

The Kanyika project in central Malawi is situated in a belt of
Precambrain granites and gneisses where a sizeable 4km long radiometric
anomaly was identified by the United Nations Development Project in the
mid-80s.

Globe Uranium was granted tenure in March 2006 over the Kanyika
radiometric anomaly, previously identified by English and Canadian
geophysicists sponsored by a United Nations Development Project in the
mid-1980s, and began a systematic appraisal of the anomaly in the usual
fashion, beginning with a soil sampling program.

The company has now moved to trenching and, since the results are
spectacular, drilling has started with the aim of defining a maiden
JORC-categorised Inferred Resource by end of the 2007 calendar year.

Globe has completed 16 holes of an initial drilling program
targeting the foliation-parallel pegmatites which returned spectacular
poly-element grades from initial trenching.

Previously announced results from these trenches include trench
KATR005; 52m @ 212ppm U3O8, 265ppm Ta2O5, 7556ppm Nb2O5 and 1.76pc
ZrSiO4.

The drilling stands a very good likelihood of confirming these
results and will have significant impact on progressing toward economic
evaluation of the Kanyika project.

Drilling highlights have been trench KATR007 reporting 145m at
138ppm uranium, 0.44pc niobium and 180ppm tantalum from the low grade
halo of the main intrusive.

State One remarks that the uranium grades, at around 130ppm, are
unspectacular on their own and the market may have misinterpreted the
importance of these results - they are from the wall rocks to the
high-grade pegmatite.

Any tonne of rock with 0.44pc niobium, 200ppm tantalum and
130ppm uranium contains around $US100 of valuable elements.

If this is even 50pc recoverable, the recoverable value is
sufficiently high to justify mining which, in most cases, can be achieved
for $30 per tonne.

Therefore the bulk intrusive is potential "ore."

"What this means, essentially, is that if the trenching of the
main intrusion - currently known to be in excess of 200m wide - shows
that the bulk of this rock contains such high grades of niobium and
tantalum, and enough uranium to keep us vaguely interested, then the
high-grade pegmatites are the cherries on top of a massive pie," the
broking firm believes.

With over 15km of potential strike of this intrusion, and
extensions under cover, the uranium-niobium-tantalum (and maybe a bit of
zirconium) potential of the Kanyika project is quite astonishing.

At the recent poor share prices, likely a result of the recent
capital raising, Globe rates a buy.

State One says it maintains its $2/12 month price target based on
the massive improvement in potential demonstrated by turning a low grade
halo into something reasonable, and a strong cash position.

SHARE PRICE MOVEMENTS
*********************

Shares of Globe Uranium rose 2c to 78c on Friday. Rolling high
for the year is $1.21 and low 39.5c. The company has 32 million shares
and 15 million options on issue with a market cap of $24.9 million.

On June 12, Globe Uranium reported that an agreement had been
reached with the Argentinian National Atomic Energy Commission (CNEA) and
the Salta Provincial Government (both via subsidiary entities) to re-open
the Don Otto uranium mine.

Don Otto is located near the western margin of the Salta Basin,
where sandstone hosted uranium deposits occur in the Yacoraite Formation.

Globe Uranium controls 1,044sqkm of tenements in the immediate
vicinity of the Don Otto uranium mine.

"This announcement gives us enormous confidence in our decision
to explore for uranium in the Salta Province of Argentina, as a
jurisdiction that both encourages the mining of uranium and one that can
make its permitting decisions expeditiously," Mr Sumich says.

"This will be the first uranium production to take place in
Argentina in the current cycle.

"In addition, the re-opening of the Don Otto uranium mine clearly
makes sense in relation to Argentina's energy situation, whereby it
currently imports all of the uranium to supply the 3,500 tonnes per annum
feed demand for its two nuclear power stations."

This will grow to 7,500 tonnes per annum when its third nuclear
power station comes on line around 2012.

"Lastly, given the proximity of the Don Otto uranium mine to
Globe Uranium's tenements, there may be potential in the future for Globe
Uranium to leverage off or share the mine infrastructure, should
Globe Uranium establish a uranium resource in the province," Mr Sumich
said.

Any off-take agreement for the sale of uranium to the Federal
Argentine Government would be at international market prices.

BACKGROUND
**********

Globe Uranium joined the Australian Stock Exchange list on
December 9, 2005.

The company is an Australian-based uranium company whose strategy
is to become a leading producer of uranium through global exploration and
acquisition of advanced-stage uranium projects.

It has been concentrating on leases outside Australia at Malawi
and Argentina.

On April 30 Globe Uranium took a major change of direction and
reached an agreement with GTI Resources Ltd for the sale of its
Australian uranium assets.

The agreement relates to Bali Hi (90pc), Hooley Camp
(Application; 100pc) and Lake Teague (Application; 100pc).

The most important aspect of the agreement is that it allows
Globe Uranium to focus its exploration efforts on its more advanced
Malawian and Argentinian projects.

In addition, Globe Uranium will become a substantial shareholder
in a soon-to-be ASX listed resource exploration company with a Board of
directors that has a proven track record of success.

The key terms of the sale agreement are as follows:

* Globe Uranium will be issued two million shares in GTI
Resources upon its listing on ASX (which can be no later than 31 August,
with a capital structure of a maximum 35 million shares on issue at IPO)

* Globe Uranium to be paid $50,000 cash, non-refundable, upon
execution of the sale agreement; and

* GTI Resources will meet all expenses between execution of the
sale agreement and settlement (listing on ASX) pertaining to facilitating
the grant of the two remaining applications (Hooley Camp and Lake
Teague).

ENDS

Copyright © 2007 RWE Australian Business News. All rights reserved.