Royal Fox Gold Inc. (fka HBEXF)

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One Canadian Investment in a Sinking U.S. Market

http://www.traderdaily.com/column/2/14315.html

The uranium story is on fire, especially with smaller exploration companies in Canada.

There’s a current uranium shortage, which could drive the price though the roof over the next few years.

Current mine production only fills 55% of the world’s reactor needs.

In Canada, all of the present uranium that’s mined comes from two Proterozoic basins. However, there is a third basin - the Hornby Bay basin - containing the same type of geology, but has yet to be tapped. And one company Canadian company, UNOR Inc. (Vancouver: UNI), owns the bulk of the claims and leases.

I went straight the CEO, George Bell, to chat about what’s happening now, and what could be in store for 2008.

Thanks for your time George, can you tell us a little about yourself and the larger UNOR story?

Sure, UNOR was incorporated in 1996, originally as Hornby Bay Exploration Limited. At the time, the company purchased claims and an extensive surface-work database from BP. The database has helped UNOR save millions of dollars in exploration costs, while also giving us a massive jumpstart in our search.

In 2007, we allocated $7 million to exploration, in an attempt to drill within one of our largest land holdings south of Kugluktuk in western Nunavut. While nothing is certain, UNOR could potentially have a McArthur River type deposit in this area. In all, UNOR’s mineral claims and leases that are100% owned, and our Cameco and UNAD joint ventures cover over 2.7 million acres.

Personally, I came on board in 2004 and have just over 34 years of experience within the industry.

As you know, Company’s like Cameco don’t seem to usually take positions in smaller companies like yours. (I think Cameco only has positions in four similar companies.) With this in mind, can you give us a little more insight as to why Cameco has taken a stake in UNOR, and how the company is helping you in the exploration process?

Great question… Cameco is a very important part of our company. In 2006, we began speaking to Cameco and cemented the deal in June of the same year. Cameco purchased 19.5% of the company at that time, with the right to maintain it’s ownership, if we were to seek any additional financing in the future. Throughout the years, Cameco has taken advantage of that right, purchasing an additional position to retain its 19.5% position every time we’ve had another round of fund raising. Just last week, Cameco purchased another 2,083,230 common shares, based on another round of financing we had closed, just a few days before.

Also, with Cameco, we’ve established a Joint Technical Committee, where they basically oversee every move we make. This gives us access to their expertise, guidance on exploration and financial accountability, as well.

Because Cameco has the most sophisticated exploration technology in the world, they are constantly helping us refine our models, what will hopefully help us uncover a massive deposit. Most important though, Cameco has taken its position, because they know the unconformity-style deposits within our claims and leases hold significant potential.

Okay, thanks. Also, can you give readers a little insight into what you found in the 2007 drilling season, and shed a little light on the plan for 2008?

I can’t fully divulge results from the 2007 season yet, as we are yet to receive geo-chemical results back yet. However, geo-physical indications lead (which we’ve already published), lead us to believe there are significant pathfinder veins, alluding to larger deposits, which we will attempt to verify this season.

Wow, it sounds like there’s a ton in store. Given all that you know, can you tell us what the risks are for investors, and perhaps give us a little insight as to your feelings on the price-outlook for uranium?

Certainly, and it’s a good question to cover. Exploration-level companies are always risky, however, UNOR itself has quite a running start with the immense value we received from BP. We’re in the process of digitizing all of the material we received in that transaction. Also, junior companies have a history of wild rides, something investors have to be aware of.

As for the price outlook for uranium, it’s hard to imagine that with over 300 rectors under construction, planned, or proposed throughout the world today, that the supply crunch will wane anytime soon. If anything, it could only increase more, potentially driving the price of uranium even higher.

How is UNOR positioned financially at the present moment?

We’re doing great, we currently have $4 million in the bank, and will seek additional financing for the 2008 season soon. Historically, when we go out to raise funds, our deals are closed in a matter of days, something virtually unheard of in the world of junior companies.


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Thanks George, I really appreciate your time… I’d like to reiterate that junior companies are risky, but the overall UNOR story is very exciting, especially with Cameco sharing technical resources and consistently pumping cash into the company.

UNOR will unveil more guidance to its 2008 drilling plan in the weeks to come, something investors will surely want to keep an eye out for.


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Mark Whistler is the co-author of Profit From Uranium (John Wiley & Sons, 2007), which is available at Amazon.com. Mr. Whistler does not own the mentioned stocks.


1/22/08