While Mega Uranium (MGA:TSX) is down big like every other junior uranium stock, it has recently witnessed a surge in insider buying and is partnered with an industry major at one of its projects. In the uranium business, its tough to think of a better partner than Cameco.
Cameco works with Mega Uranium in Australia
Mega Uranium updated its working relationship with Cameco‘s subsidiary in a mid-2015 press release.
To clarify, Cameco Australia Pty Ltd, a wholly owned subsidiary of Cameco Corporation is the sole funder of Mega’s Kintyre Rocks project, which is held by Boxcut Mining Pty Ltd, a wholly-owned subsidiary of Mega.
This asset is located in the East Pilbara region of Western Australia, a politically stable region compared to certain uranium producing regions.
In a July 30th press release Cameco notified Boxcut of its election to earn an additional 19% interest in the Project (representing a total possible interest of 70%) by sole funding expenditures for exploration activities of AUD$4,000,000 (inclusive of the AUD$2,000,000 spent to earn the 51% interest in the Project) within four (4) years from the date of the agreement.
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The key takeaway is that Boxcut is not required to contribute to expenditures on the Project while Cameco is sole funding expenditures. A great situation for any junior in today’s merciless market.
Mega Uranium: insiders buy in January
Richard Patricio, Mega Uranium‘s President and CEO picked up 200,000 shares at 7 cents earlier this week, according to Canadianinsider.com.
Douglas Reeson, a company director, chipped in for 100,000 at $0.06 per share last week, according toCanadianinsider.com. These purchases are less impressive when you consider Mega Uranium issued 1.7 million options to management and directors on January 1st.
Mega Uranium’s last equity raise was done at $0.09 a far cry from the current $0.065 share price or the recent low of $0.05 – hit in December.
While a small raise, and completed in July, a director of Mega purchased approximately 13% of the total number of units sold.
The pressure is on Richard Patricio, Mega’s new President and CEO following the retirement of Sheldon Inwentash as Chairman and a member of the company’s board of directors, in March of 2015.
Mega Uranium still has an approximate $18.3 million market cap and is among the most liquid junior uranium stocks on the TSX. The company trades approximately half a million shares per day. With few exploration plays ongoing in the uranium sector, the next update from Cameco will be interesting as Mega attempts to ride out one of the worst commodity bear markets in history.
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