Tuesday, August 30, 2011

Hathor Exploration vs Cameco - good deal or bad deal

Hathor Exploration (TSX:HAT) is a company that is currently exploring for uranium in one of the finest uranium areas on earth. This would be the Athabasca Basin in northern Saskatchewan, Canada. Known as an area where political stability is definitely not an issue, and the grade of most uranium from this area reaching unusually high grades, including some of the highest grades known, it is viewed as a premiere address for all company's involved in uranium.

I wrote about Hathor Exploration, back on May 20, 2011, and questioned whether Hathor Exploration would become a mine or a take-over target. On Friday Aug. 26, 2011, news broke of a hostile bid by one of the world's larger uranium producers, namely Cameco. This acted as a driver to the Hathor shareprice, causing it to reach new 52 week highs Friday, and continuing on Monday and Tuesday. The closing price on Tuesday was $4.10 per share.

It would seem that shareholders are making a statement about the offer at this point, since $4.10 is a respectable premium over and above the $3.75 offer from Cameco. Hathor management has requested that shareholders not respond to Cameco's offer at the present time, in a news release dated August 29, 2011. In this news release Hathor also stated that they were unable to comment at this time since they had not received any official papers concerning this hostile bid. http://www.hathor.ca/i/pdf/NR_29aug2011_CCOresponse_V6-2.pdf


It would be my opinion that this price could conceivably appreciate from this level. Cameco may need to sweeten the offer at this point, and that is assuming that no other offers come to light. Some analysts are saying they see little chance of an alternate offer. The main argument for this view is the foreign takeover rules. However, in my opinion, while this may be somewhat of a problem, there are companies that could either present an offer since they are Canadian, or a Canadian company could JV with one of the foreign company's. This would leave several scenarios open which could include names like Areva, Denison Mines, not to mention a few others, although these would definitely standout. Of course there is the possibility of even BHP Billiton, but I'm not certain where they might stand on this. All of the company's mentioned have been unavailable for comment so far.

I do expect that Hathor will quite likely continue to gain ground with their shareprice. In any event, the one thing that Cameco has done through all this, is bring global attention to Hathor Exploration, and in so doing, it is extremely difficult to say with any certainty just where this shareprice may end up.

I do like the fact that I was able to call Hathor back in late May, and now to watch the company appreciate as I had first envisioned it. From the time I called Hathor, in May to now, represents a 59.5% ROI. If this plays out the way I expect it may, there could still be some profit to be made yet.
If anyone would like more information on Hathor, I would suggest going to their website which can be found at http://www.hathor.ca/s/Home.asp

For disclosure purposes I have received no compensation for my views or this post. I do not own any shares of Hathor Exploration.

2 comments:

  1. I just gone through your website..It seems very interesting for the financial related people..
    Diamond Drill Bits

    ReplyDelete
  2. I'm glad you found this interesting and I hope also informative. Thanks for the feedback.

    ReplyDelete