News & Analysis

Forte Energy NL (FTE: AIM) review and analysis

By PSQ Analytics

Forte Energy NL (Forte Energy) focuses on the exploration and development of uranium, with projects in the Republics of Guinea and Mauritania in West Africa, where it has 15 exploration licences over 12,742 sq. km. The company has a strategic alliance with Areva NC, which holds an 11.6% stake in the company. As part of its agreement with the company, which runs for a period of 2 years ending June 2010, Forte Energy has had access to Areva's uranium exploration database as well as technical cooperation and on-ground support for exploration and evaluation of its Mauritania projects. Subject to identification of a minimum 60-80 Mlb of JORC compliant inferred uranium resource by June 2010, the companies may form a JV to develop assets in Mauritania, with Areva taking a 25% stake. Post JV formation, Areva may increase its JV stake to 51%, subject to fulfilment of conditions.

Named Murchison United NL until November 2008, Forte Energy changed its name and its focus from Australian copper and cobalt projects to West African uranium projects following a change in Management and board members in 2004. In line with its focus on Uranium exploration projects, the company announced the sale of its 50% interest in the Maroochydore Copper-Cobalt project to JV partner Aditya Birla Minerals Ltd. for AUD2 mn in December 2009 and entered into a 6 month option agreement with Element Minerals Australia Pty Ltd for the sale of its Millenium Copper-Cobalt Project in August 2009, which has been extended for another 6 months. The company's core projects are:

– Projects in Mauritania: The company has 9 uranium exploration licences in Mauritania covering a total area of 11, 895 sq. km. Resource drilling is underway at Bir En Nar, while field exploration is being undertaken near Bir Moghrein. The company is expected to release initial JORC resource estimates at Bir En Nar by end of March 2010 while resource drilling at Bir Moghrein is expected to be completed in May 2010.

– Projects in Guinea: Forte Energy has 6 uranium exploration licences in Guinea covering a total area of 847 sq. km over 2 separate concessions, Firawa and Bohoduo. While the Bohoduo project is at a preliminary exploration stage, the company announced a JORC compliant Inferred Resource estimate of 17.7Mt grading 296ppm U3O8 for 11.6Mlbs contained U3O8 at 100ppm cut-off, at Firawa on 01 July 2009.

Key recent news

23 February 2010: Forte Energy updated on progress at its Bir En Nar property, reporting ‘outstanding’ grades from the recently completed drilling. The company is expected to report JORC compliant resources from the project by 31 March 2010.