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Forte Energy shares surge ahead of uranium upgrade

Last updated: 04:37 23 Dec 2014 EST, First published: 05:37 23 Dec 2014 EST

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Shares in Forte Energy (LON:FTE, ASX:FTE) surged on Tuesday as investors anticipated a material uplift to one of the group’s recent additions.

Forte this morning told investors it expects to reveal a significant increase in uranium resources in its Slovakian joint venture.

A review of European Uranium’s Kuriskova project has incorporated additional drill hole data and it will enable the release of a new JORC compliant resource estimate, Forte said.

The final calculations for this new resource statement are currently being finalised; nevertheless the company anticipates a significant increase from prior assessments.

Forte anticipates the report will be available in early January.

Immediately after the regulatory news release Forte shares jumped more than 40% to trade at an intra-day high of 0.2p per share, and by late morning the share was up 0.03p, 25%, trading at 0.17p.

In October Forte completed a deal to acquire 50% of European Uranium’s two projects in Slovakia.

Kuriskova is the more advanced of the two projects and spans some 32 square kilometres.

A pre-feasibility study in 2012, based on the previous resource estimate, indicated a project with a US$276mln net present value and a 30% internal rate of return.

Based on a uranium price of US$68 per pound, it was estimated that US$225mln of capex would be paid-back in just shy of two years. Operating costs for the first four years was estimated at US$16.68 per lb, while the life of mine figure was US$22.98 per lb.

Currently the uranium price stands at around US$37 per lb.

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