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I don’t think Hathor’s going to be around much longer


Hathor I dont think Hathors going to be around much longer

Cameco Corp. CEO Tim Gitzel told the Globe and Mail recently that the current slump in uranium prices following the Japanese nuclear disaster represents a good time for the world’s largest publicly traded uranium mining company to look at acquisitions in the uranium space.

I agree. It makes sense for a company the size of Cameco to go shopping when prices are low.

It also makes sense for Hathor Exploration Ltd. to be its likely first target.

Hathor, in my humble opinion, is the gem of the junior uranium space and an obvious target for Cameco. It has found the fourth richest uranium deposit in the world at Roughrider in the Athabasca Basin, and is less than 40 kilometers (25 miles) from an operating uranium mine and therefore is close to mills, tailings facilities and other infrastructure.

Hathor, which has a market cap of only ~334 million (113,016,911 issued and outstanding * $2.98 last trade) and a world class asset in Roughrider, would represent a big bang for Cameco’s acquisition buck.

Still, I expect a buyout of Hathor to occur at a significant premium to market. Dundee’s 12 month target price is $5.60 per share.

There is a downside to Cameco taking out Hathor however. The countless other juniors operating in the Basin wouldn’t be happy to lose the halo effect of the good news flowing out of Hathor, which will surely dry up once Roughrider becomes a footnote on Cameco’s annual report.

Of course, it’s not likely that Hathor shareholders will mind.

Disclaimer: The opinions above are the author’s alone and do not reflect investment advice. TVS was not compensated in any way, directly or indirectly, by any of the companies mentioned in this post. As always, talk to your investment advisor and DO YOUR OWN DUE DILIGENCE. Thank you!

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