Canam Energy is an emerging player in the uranium mining industry. The Company is focused on acquiring highly prospective properties, primarily uranium, which offer the opportunity for exploitation and development.
The Company owns two high-grade uranium properties in Canada, both of which have exploration programs underway and plans to begin drilling during the 2007-2008 season. Its Grand Calumet property consists of 24 claims and 3,000 acres in Grand Calumet Township of Quebec and has great potential to be highly productive.
Nuclear fuel, produced by uranium, is the most efficient fuel for generating electricity. A kilogram of uranium can produce 50,000 KWh of electricity, compared to 4 Kwh, 3 Kwh and 1 Kwh, respectively, from the same sample amounts of oil, coal and firewood. Although nuclear reactors require a large amount of capital in the beginning, they are the most cost-effective power source in terms of variable fuel cost expenses.
In conclusion, the analyst who completed the report stated, “Focusing just on the Grand Calumet property, a 10% likelihood of finding 1/10th of the area’s 1 million tons of uranium suggests a potential mineral resource amounting to 10,000 tons of uranium, worth approximately $1.8 billion at today’s prices. Considering the strong mineral potential of its properties and the Company’s comparatively low market capitalization, we think a higher valuation is warranted for Canam Energy. As a result, we are initiating coverage of these shares with a Speculative Buy rating and a $1.50 price target.”
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