Far East Capital Newsletter
West Wits uranium offers great upside for traders
20 Jan 2024

In This Issue

West Wits uranium offers great upside for traders

The run up before Christmas was almost unbelievably strong. It was always going to lose momentum, then tip over. So, it should not surprise us that 2024 has seen a return to rationality. The US$ has strengthened as the premature enthusiasm for interest rate cuts is being purged from our thought processes. We are back to a market that is lacking in velocity for the time being and could well drift lower.

The uranium price, and the uranium stocks, have been on a tear this week with the spot price hitting a 15 year high, breaking US$100/lb. Brokers have been ringing me looking for new uranium deals, commenting that the market is hungry for new entry points into the sector. In a word, uranium is hot right now. Will it last? Sure you will get your fluctuations, but there is nothing to say this run will be over in a hurry.

There is one uranium project that has been totally overlooked by the market. West Wits has reported an Exploration Target of 12-16 Mlbs at 300-550 ppm U3O8 on its licences in South Africa. It should take only $1-2m of drilling to elevate the Target to a JORC resource.

If you use a rule of thumb that uranium is worth US$2.00/lb in the ground, the West Wits target could be worth A$32m (WWI share) once the drilling upgrades its status. That is more than the $27m market capitalisation of the Company today! 

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