Their article seems a little dated in its content, but just...

Their article seems a little dated in its content, but just published today.
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Uranium's well kept secretTuesday,
28 August 2007

URANIUM companies have enjoyed much fanfare in recent times but Perth-based Scimitar Resources is one play that has managed to fly under the radar, but that could all be about to change. RESOURCESTOCKS*

The hype surrounding the uranium market has been mind-blowing and the majority of those companies have performed extremely well, generating significant capital gains for investors.

Like in any market, however, there are always companies out there whose stories are not yet fully appreciated by investors. Perth-based Scimitar Resources is probably one of those companies.

Scimitar listed right at the start of the current uranium boom and as a consequence has flown somewhat under the radar compared to the companies that have launched their floats with much market fanfare in the past 18 months.

To be fair, shareholders who bought into Scimitar in the past year have been well rewarded with the shares doubling to around $1.

But when you look at the fact that Scimitar has just 39 million shares on issue it becomes clear that here is a uranium company that has secured approximately 20,000sqkm of some of the most prospective uranium ground in Australia including Western Australia, the Northern Territory and South Australia, yet it has a market capitalisation of less than $40 million.

Add to that some of the exciting progress on the exploration front in recent months, the changing dynamics of Australia's uranium mining policies and the surging uranium price and you have a company that clearly still provides an investment with blue sky potential.

"When we first set up Scimitar (in 2004) we looked at uranium because we had been to Canada and seen what was going on there," managing director Terry Topping said.

"The price of uranium had moved, there was more demand globally for the product and uranium companies were reacting. But in Australia things were still going slowly and uranium had not really appeared on the radar but we anticipated there would be a flow-on effect to the Australian markets.

"Because of that we were able to get in and pick up some terrific ground holdings at very reasonable prices.

"It is somewhat ironic, however, that because we got in early we got some of the best ground, paid the least for it, but have been somewhat overlooked by the market.

"Investors need only take a good look at our company, research the projects and compare us to our peers and they can make up their own minds.

"There is no doubt the market is starting to recognise us, but this story has a long way to run and we are making some excellent progress on our project portfolio.

"When you look at the uranium sector as a whole and make serious comparisons between the explorers, you can quite easily see where potential value lies."

The uranium price most recently topped $US120/lb – a truly remarkable level that has stunned even the most bullish forecasters - on the back of increasing demand driven by growing calls for clean, safe energy and fears of a global production shortage because of relatively flat world production.

Scimitar currently has five main uranium projects in Australia including Yanrey and Beadell in WA, Eclipse, Amadeus in the Northern Territory and Lake Frome in South Australia – all up some 20,000sqkm of tenements.

Some serious progress has been made on a couple of the projects in recent months, which has been another factor in Scimitar's rising share price.
The most advanced project is Yanrey, situated 85km south of Onslow in WA's Pilbara district.

The project covers the same geology as the neighbouring Manyingee uranium deposit – the flagship project outside Africa of emerging uranium miner Paladin Resources. Manyingee has a published resource of 12,078 tonnes grading 0.08% U3O8 which was successfully trial-mined and treated during the 1980s.

Previous drilling at the Bennet Well prospect at Yanrey in the early 1970s and 1980s identified a complex palaeochannel system with mineralisation extending some 4km.

Scimitar recently undertook its third drilling program at Yanrey and continues to extend the known uranium mineralisation.

The latest program was somewhat frustrated by extremely tough ground conditions at the Manyingee prospect and on parts of the Bennett Well prospect.

This meant not all the drill holes could be completed because the drilling rig failed to penetrate the hard rock cover.

But despite this frustration, drilling on the main Bennett Well channel continued to intersect significant uranium results with four holes drilled 1.2km to the north of the known mineralisation.

Topping said the company was aiming to continue its exploration of the Yanrey project and is planning a bigger program at Bennett Well, Manyingee and other regional targets.

The company has also booked a more powerful drilling rig with reverse circulation capabilities, which should be available in July if not sooner, which should help Scimitar tackle, with ease, the hard ground conditions.

Another highly prospective project for Scimitar is Lake Frome in South Australia, which sits roughly between two of Australia's existing uranium mines in Beverley and Honeymoon Well.

Beverley is the biggest sedimentary uranium deposit in South Australia and is located on the northern Lake Frome plains. It has a resource of 21,000 tonnes of uranium oxide and is currently being mined using in-situ leach methods by Heathgate Resources.

The Honeymoon Well uranium deposit is located to the south-east of Lake Frome near the Olary Ranges and hosts 3300t of uranium.

A recent airborne electromagnetic survey by Scimitar has identified the same formation which hosts the Beverley and Beverley Four Mile uranium deposits.
Scimitar's discovery is located to the south of Alliance Resources' Beverley Four Mile project.

Alliance Resources recently announced an initial resource for part of the Four Mile West deposit of 3.9 million tonnes grading 0.37% uranium for 32 million pounds of continued U3O8, which has an in-ground value of $A4.4 billion.

Interpretation of the data by Scimitar's team of experienced geologists has identified a strongly conductive sediment package intersected by basement fault structures and also indicates the presence of near surface palaeo-drainages.

"This has highlighted target areas for both the Beverley and Beverley Four Mile style uranium mineralisation," Topping said.

"As a company, naturally we are excited by the results as it really opens up the prospectivity and potential of the project area."

Further processing and interpretation of the data is continuing with the aim of identifying further regional fault structures intersecting the Namba and Eyre Formations.

These structures are thought to be important as they provide a pathway for mineralising fluids from the uranium enriched granitoid basement.

"This data will enable the company to create a 3D model of the sedimentary sequences and regional structures to generate further drilling targets," Topping said.

Scimitar has also continued early stage exploration work on its Amadeus uranium projects in the Northern Territory.

At the Eclipse project, also in the Northern Territory, drilling has started targeting two big regional drainage systems and a big airborne radiometric anomaly but the work has been largely hampered by heavy seasonal rains and unfavourable weather.

Topping said the company had also been buoyed by recent changes in the political landscape regarding uranium mining in Australia.

The uranium and nuclear energy debate has picked up speed with the Federal Opposition Labor party changing its anti-uranium stance recently just months out from a likely election. There is also mounting pressure on the largely Labor-Governed states of Australia to reconsider their staunch opposition to uranium mining.

The ruling Liberal Party has become a strong proponent of uranium mining and nuclear energy and is driving the debate on the topic.

It appears that change is in the wind and companies setting themselves up now with potential emerging projects look likely to be the ones which will benefit most in the future.