We are adding to our long position in Fronteer Group (FRG) which essentially works on the land bank model, exploring and acquiring deposits which are yet to be developed.
Fronteer first blipped upon our radar screen a couple of years ago, thanks to the excellent team at Casey Research and their International Speculator.
Fronteer works with larger partners such as Teck Cominco and Newmont. The major partners are given the option for a larger piece of the project if they take them into production.
Fronteer has large deposits in gold and uranium. Fronteer is interested in Aurora Energy Resources of Canada of which it already owns 42.2% of the common equity. Fronteer will likely make an offer of 0.825 shares of FRG for each share in Aurora.
Aurora should be viewed as a speculative special situations stock as it owns the world's ten largest uranium deposits per Aurora's website. Unfortunately the government of Labrador has imposed a moratorium on new mining projects.
Aurora has no debt and $99 million in cash per their website. Fronteer boasts $80 million in cash. We like the deal of swapping shares for cash. We will add to our position in FRG.
http://www.aurora-energy.ca/?p=news_archive&news_id=103
http://www.fronteergroup.com/
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