West African hopes cheer Forte

16/03/2010 Robert Tyerman

Forte Energy expects new uranium resource figures for its Mauritanian projects shortly and could start producing from Guinea by 2012.

Based in Perth, Western Australia, and quoted Down Under and on AIM, Forte hopes to have a new resource estimate for Bir En Nar in Mauritania by the end of this month, following recent results showing ‘outstanding grades’, including eight metres of 2,470 parts of uranium oxide per million parts of rock and one metre at 4,890 parts per million. Managing director Mark Reilly says the company has identified several potential high-grade prospects at Bir Moghrein in Mauritania, where drilling will start late this year.

Forte is also active in Guinea, where it announced a maiden resource estimate for its Firawa prospect of 11.6 million lbs of uranium oxide U3O8 last year. According to Reilly, the company is working to increase that figure substantially and, if all goes well, could be in production there by the end of 2011 or the start of 2012, using cash flow from that to fund work on increasing the resource estimate further.

Forte, which raised £7.25 million last year at the equivalent of 3p, has around £4.25 million of cash left and is likely to spend about half of it this year, comments Reilly. He insists the company has no need for another cash call on the market.

French nuclear power giant Areva holds nearly 15 per cent of Forte and provides useful technical assistance. Reilly suggests the French company would be likely to be interested in off-take agreements once Forte’s projects moved into production.

Forte shares have been volatile, fluctuating between 2.6p and 2.25p over the past year. Highlighted by Growth Company Investor at 5.75p last year, they now trade at 10.5p, down 0.25p this morning, valuing the company at £60 million and still offering significant speculative potential.