First Uranium Corp. Shares Expected to Weaken Further

Shares of First Uranium Corp. (FURAF.PK) have fallen more than 50% in the past year and remain vulnerable as South Africa’s power crisis may lead to delays for the company’s uranium and gold projects there.

In fact, investors should wait three to six weeks for First Uranium shares to weaken further after it releases revised production guidance before buying the stock, according to Raymond James analyst Bart Jaworski. He initiated coverage of the miner with a “market perform” rating and a C$7.40 price target.

In a note to clients, Mr. Jaworski said First Uranium has very significant gold by-product credits that result in projected negative cash costs, as well as near-term commercial production, the potential for consolidation, high production growth, one of the industry’s largest resources, an attractive relative valuation and an experienced management team.

“Power shortages in South Africa, however, have created significant uncertainty,” he said, adding that production could be disrupted, start-up may be delayed and cost inflation may become an issue in the coming year. However, Mr. Jaworski thinks First Uranium’s “robust profit margins” should offset these risks.

Comments

[M33:]

Both First Uranium and ERA production is lower then expected but spot uranium price is not effected? ..yet.

2008 Apr 15 11:38 PM