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Wednesday, January 31, 2007

Strathmore plans to spin off Canadian properties

According to this press release, Strathmore Minerals (combined links) plans to create a separate stock for its Canadian properties. The stock would then be issued to current shareholders who could then choose to sell one or the other.
The reorganization is designed to improve the identification and valuation of specific Strathmore properties, to enhance Strathmore's ability to divest specific properties through simpler corporate ownership, to enter into strategic joint venture agreements, and to enable Strathmore to separately finance and develop its various assets, selectively reducing stock dilution.
This requires 2/3 of a vote at a special meeting. I say, "Sure, why not?"

My guess is that this comes at the request of current or potential shareholders. Sprott Asset Management comes to mind. It could boost the overall market price if various shareholders prefer one and not the other. The US properties would include Roca Honda and Church Rock and a lot of other stuff that would go into production within the next 10 years. The Canadian stuff would be either further out for investors focused on very long term prospects or perhaps a takeover target (e.g. throw it overboard and let the sharks fight over it).

Overall, I view this as a mildly good thing.

UPDATE Feb 1, 2007:
UxC reports that the spot price of uranium is now $75, up from $72.

I enjoyed visiting your blog.
While the main purpose is for my own notes, I'm glad that other people find the blog interesting.
I'd like to suggest a stock for evaluation, oxihf. Someone suggested to me that it had some very good growth prospects, and it is one I am not really sure how to evaluate.
Regarding OXIHF, I generally prefer to own businesses that have made money in this century.
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