In a Q2 quarterly preview note, he said:
We recommend buying First Uranium and Eastern Platinum ahead of the quarter based on attractive valuation and expected positive quarterly results.
Regarding First Uranium, the analyst said the company is starting to show a relatively solid track record of achieving milestones at its wholly-owned MWS and Ezulwini operations in South Africa.
The analyst told clients:
Some may be surprised to learn that the company already produces at an annualized rate of 34,000 ounces of gold per year at the MWS tailings retreatment facility and has just begun producing gold (from its own plant) at its Ezulwini underground operation.
He said First Uranium's share price, which is down more than 40% year-to-date, reflects in part a discount related to its South African peer Uranium One Inc. (OTC:SXRZF). But unlike Uranium One's Dominion uranium-gold mine, Mr. Jaworski said Ezulwini has wider minable reefs, higher gold grade, decades of historic production and mineralogy which is non-refractory.
He upgraded First Uranium to a "strong buy" and maintained his C$9.50 price target.
The Raymond James analyst also upgraded his rating on Eastern Platinum from "outperform" to "strong buy" but lowered his target price on the stock from C$4.20 to C$3.80 to reflect a more conservative stance at Eastern's Crocodile River project in South Africa.
He told clients:
Despite the lower target, we believe the current sell-off in the share price is a buying opportunity. We believe the market has over-reacted on demand erosion fears while losing sight of the fact that producers are falling short of production.
Shares in Eastern Platinum, which has been hit hard the past few months, falling more than 60% since hitting a 52-week high of $4.18 in early March, are currently trading at roughly $1,170 per ounce platinum, representing a 43% discount to Raymond James' 2008 platinum price forecast of C$2,051 price target.
Mr. Jaworski cautioned investors on Paladin Energy Ltd. [PDN.TO], due to its "rich valuation" and Uranium One and Denison Mines Ltd. (NYSEMKT:DNN) on recent production downgrades and sovereign risk concerns combined with prospects for negative quarterly surprises.