Bannerman Resources Limited (TSE:BAN), (PINK:BNNLF) is one of these. The stock of the company plunged deeply down at the start of last week. BAN sank from $0.7 to $0.37, or by 47%.
Most analysts, however, were sure that the negative effects from Japan’s cataclysm would last for the short-term only. They supposed prices would pull back up again in the long run.
These analysts were right. Uranium stocks really began to recover – some slowly, others – much more convincingly. Bannerman’s shares made no exception. BAN has managed to pull 34% back since last Wednesday. On Monday, it moved up to $0.495 at closing.
The revival of the stock is hardly surprising. After all, there is no real alternative to uranium. Uranium mining has its traditions in Canada, the country is one of the largest producers and exporters of this metal.
As for Bannerman Resources, there are several factors that could probably support the shares’ progress in the future. First, the company looks financially solid enough. At the end of 2010, it had $22.7M in cash and a working capital of $12.8M.
Moreover, Bannerman has indicated a significant resource growth at its main property – the 80%-owned Etango Project in Namibia. The table below, taken from the company’s March 2011 presentation, proves this.
Besides, last Monday the company announced an update of its Entango uranium project. It showed “high grade surface rock chip samples for up to 1,698 parts per million (ppm) of U3O8”.
On the other hand, there are some negative facts regarding Bannerman that also need to be mentioned. For the last quarter of 2010, the company recorded a significant net loss of $2.2M.
The last trading session gave indications that the surge of the stock is, maybe, coming to an end. BAN finished at $0.495, equal to the previous day close. The trading volume has started to decrease too. This probably implies that the stock might find it difficult to continue its recovery on the Toronto Stock Exchange.
Will BAN manage to climb at least to $0.7 per share, where it was before the crisis in Japan? When will it happen? Only the future will show.
