London, England / ACCESSWIRE / November 5, 2014 / Today, mining analyst Stephan Bogner (Dipl. Kfm., FH) published a 12-page research update on Lakeland Resources Inc. and Declan Resources Inc., including an interview with geologist Neil McCallum from Dahrouge Geological Consulting Ltd.
The full analysis can be read as a PDF via the following links:
English:
http://www.rockstone-research.de/research/RockstoneUranium4english.pdf
German:
http://www.rockstone-research.de/research/RockstoneUranium4deutsch.pdf
Excerpt:
Almost one year ago, on December 4, 2014, Lakeland Resources Inc. announced a joint venture with Declan Resources Inc., whereas Declan was granted the option to earn 70% of the Gibbons Creek Project in the northern rim of the prolific Athabasca Basin if $6.5 million was spent on exploration within 4 years.
As Gibbons represents a highly prospective, drill-ready uranium project (we reported about the highest radon values ever measured in the Athabasca Basin), Declan's share price doubled within few weeks (from $0.07 to $0.14) after the announcement of this partnership. Lakeland's stock took off even stronger and rose from $0.10 in December 2013 to $0.28 in January 2014.
In February 2014, we expected the start of Gibbons' drilling program within a few weeks. However, it did not happen!
Apparently, Declan had to first raise funds for the drilling campaign. Finally in July, Declan closed a $2 million financing (at $0.07/share). So Lakeland's management and shareholders (and probably Declan's shareholders as well) felt positive that drilling on Gibbons should start soon after this financing. However, it did not happen!
On September 29, the partnership agreement with Declan was terminated in order for Gibbons to return to its owner. In retrospect, this partnership was bad for Lakeland's share price as it lost heavily since then due to Gibbons not being drilled as planned - and expected by the market. On the other hand, these circumstances have created an extremely low share price for Lakeland, which appears attractive nonetheless.
Until today, we do not know what Declan did with the $2 million and if at all something is left. Declan's share price is dropping towards its intrinsic value currently trading at $0.02 (-86% since January).
Chart 1: http://scharts.co/1wUa6kW
Further losses for Declan's shareholders are possible. Frankly, we also do not know what is going on in the background, whereas regular updates by management (in form of press releases) would have been helpful in not losing that much in due course.
Gibbons probably represents Lakeland's most prospective project and because Declan did not drill it as expected, Lakeland's stock also fell strongly and currently trades at $0.06 (-76% since January). Recently on October 28, Lakeland announced to drill Gibbons on its own with a drill program to start as soon as weather permits - hence, we now anticipate a strong rebound in Lakeland's share price, similar to how it traded in December 2013 and January 2014 (when drilling was also expected to start at Gibbons).
Chart 2: http://scharts.co/1wUa2BD
Behind Lakeland is almost the same team of geologists that originally conceived the Patterson Lake Project that eventually turned into the Patterson Lake South (PLS) Uranium Deposit, being developed by Fission Uranium Corp. ($290 million market cap). With only 54 million shares issued and outstanding, Lakeland is held strongly by Insiders (25%). The company is well cashed-up with estimated $2 million, whereas around 20 properties in the Athabasca Basin were acquired during the last year and half with 4 projects being drill-ready today: Gibbons Creek, Star, Lazy Edward Bay and Newnham Lake
We anticipate Lakeland's drill program to put the company on the radar of major investors as it represents a prime drill speculation.
The full analysis can be read as a PDF via the following links:
English:
http://www.rockstone-research.de/research/RockstoneUranium4english.pdf
German:
http://www.rockstone-research.de/research/RockstoneUranium4deutsch.pdfDisclaimer: The author holds shares Lakeland Resources Inc. and thus would profit from a share price appreciation, whereas the author may sell those any time without notice. Neither Rockstone Research Ltd. nor the author was remunerated by any of the companies mentioned herein to produce or publish this content. Please read the full disclaimer within the full research report and on www.rockstone-research.com as a conflict of interest exists with Zimtu Capital Corp. and none of this content is to be construed as an "investment advice."
SOURCE: Rockstone Research Ltd.