Traders Cafe with Zak Mir: URA Holdings

A Sub £3m Market Cap

One of the most important aspects for any company which is new to the market is related to getting off to a good start. Part of this is luck – Q1 2021 was one of the best periods in recent times. The other part is the valuation the company comes to market with. As far as URA Holdings is concerned, an initial valuation of less than £3m for a main board company, and one would rather be compelled to take the view that we are looking at a situation which even before one kicks the tyres in terms of the fundamentals is looking as “cheap as chips.” After all, the big winners of the recent past in the resources space such as Bens Creek (BENS) or Pensana (PRE) and Tirupati Graphite (TGR) all had “priced to fly” initial listing levels. However, in the case of URAH, we may have the stock which is the cheapest of all.

The Russia Factor

Adding onto this, we are reminded of how, while the company floated just after the Ukraine invasion, this is actually a plus point for companies like URA. With Russian companies and resources in the mining space now set to be closed, the tide has risen for those plays who operate away from this region, with URA’s focus on Central and Southern Africa. Even more crucial is the way that this market newcomer is set to operate in both the US and EU’s critical metals list. Pre- Ukraine this was important, now this importance has been amplified. URA has access to potentially valuable strategic metals in a "safe" jurisdiction - particularly coltan (containing niobium and tantalum). These minerals are mainly on or close to surface, so relatively easier to prove up and exploit. In fact, the company’s strategy is wider than critical minerals. It is basically looking for undervalued or overlooked situations which can readily be proved up to interest the big players or even be brought rapidly into production. This brings in the prospect of an active acquisition programme, one that is likely to kick in quite rapidly over coming months.

The 3 M'S

Of course, in the small caps space, it is the 3 M’s (management, management, management) that are usually the key to taking such an entity from being a minnow to a major. In this respect URA has plenty going for it. Ed Nealon, the Non-Executive Chairman is the founder and former Chairman of Aquarius Platinum, co-founder of Sylvania Platinum Ltd (AIM and ASX), and co- founder of Tanzanite One (AIM). He is currently non-executive Chairman of AIM-quoted Lexington Gold (LEX).

CEO Dr Bernard Olivier, Chief Executive Officer established a JORC gold resource of 3.9m oz at Bezant Resources (BZT), and is currently CEO of Lexington Gold Ltd. In both these cases, the implication is that both individuals would not be involved in the URA party if there was not considerable upside. With a market cap of £2.9m at the present share price of 2p, it is difficult not to speculate on how significant the upside at URA Holdings could be.