On The Lookout For Glowing Crocodiles  

The uranium boom here has clearly reached the bubbly stage (actually the bubble seems to be bursting over the last 3 days), as this tale from Pierpont (via Shaw Stockbroking) of some classic WA mining entrepreneurs shows. Clearly blue sky mining is still as lucrative as ever.

Absolutely nothing is more fashionable than uranium these days. The Chinese and Japanese want to incinerate it as fuel, while Iran and Pakistan want it to incinerate their neighbours. So as long as the oil price stays high and atom bombs proliferate, uranium investors can get richer and happier.

The problem is to find a hot little uranium stock, because all the big ones are fully priced. Uranium is only a small part of BHP Billiton, while well-known miners such as ERA and Paladin have been bid up in the market for months. As usual, Pierpont is here to help. He has found a little uranium stock that is hotter than chilli seeds.

It's Greater Pacific Gold, but if you want to sleep at nights after buying it, Pierpont advises you not to spend much time checking its background or you may get chronic insomnia.

Greater Pacific has an issued capital of 613 million shares, which are trading around 1.9c. The share price needed an atom bomb to get it moving so they found one. Greater Pacific has issued no fewer than four excited Australian Stock Exchange announcements this month to tell investors it has uranium in the Northern Territory.

On September 6, Greater Pacific announced it had an option to acquire 25 per cent of the assets of Australian Uranium Pty Ltd. On September 8, Greater Pacific said Australian Uranium held uranium prospects covering 700 square kilometres in the Mary River area about 100 kilometres east of Darwin.

On September 14, Greater Pacific said it had obtained the right to buy 51 per cent of Australian Uranium. On September 19, Greater Pacific said the geological appraisal of the prospects was very encouraging and that the Mary River area was "adjacent to Batchelor, Rum Jungle and Jabiru".

Well there's plenty of uranium in the Northern Territory all right and it's the only place in Australia where a discovery has a sporting chance of being developed, with the partial exception of South Australia. In Greater Pacific's case, the lead time to development is going to be particularly long because it hasn't actually found any uranium. Further, the area it has bought into is near the coast on the Mary River flood plain.

Mining data service Intierra describes the area as swampy, with the prospective basement rocks concealed beneath wetlands, which will tend to mask any buried anomalies. The area may well be rich in uranium, but in Pierpont's experience, what the Mary River is undeniably rich in is saltwater crocodiles of the large, aggressive variety. Pierpont would go prospecting there only in an army duck, preferably heavily armed.

Pierpont's none too sure about the word "adjacent" either. Mary River is about 100 kilometres north-east of the old Rum Jungle and Batchelor uranium mines and 120 kilometres west of Jabiru. Maybe the Greater Pacific chaps take an expansionary view of neighbourhoods.

...

Wondering whether Australian Uranium was flush with funds, Pierpont looked it up on the Australian Securities and Investments Commission website. The search revealed a few little surprises. One was that Australian Uranium was previously called Boldray Holdings. The directors agreed on September 2 to change its name to Australian Uranium because it had applied for a tenement in the Northern Territory and intended to concentrate on the mining industry. So it had been Australian Uranium for only four days before the deal with Greater Pacific was announced.

Nor does Australian Uranium, despite its grandiose name, look like any giant of the nuclear industry. Its issued capital is just two $1 shares held by a lass named Carol Hardie.

Staring dumbly at the ASIC search document, it occurred to Pierpont that the chaps at Greater Pacific probably because they were so excited had failed to mention the linkage between Greater Pacific and Australian Uranium. Greater Pacific's head office is at 68 Aberdeen Street in the Perth suburb of Northbridge. Australian Uranium's registered office is next door at number 70. One of Greater Pacific's largest shareholders, with an interest in 14.89 per cent of the company, is Dean Scook. Dean is a former director of Boldray, having stepped down in 2000. Australian Uranium's only current director is Carol Hardie.

...

So Carol as the only shareholder in Australian Uranium sold 51 per cent of the Mary River tenements, within eight days of applying for them, to Greater Pacific, where Dean is a large shareholder. It all seems very cosy, which just shows what nuclear fuel can do for your household. But Pierpont will believe in uranium at Mary River only when the crocodiles start glowing in the dark.