What’s behind massive Uranium One trades?

[miningmx.com] — URANIUM Uranium One (previously known as SRX Uranium) is not a company that I have written at length in recent years, although I have mentioned mainly in passing in columns and articles on Miningmx.

But lately I have had my ear bent on Uranium One by various contacts, who have rather disparate views of he group’s prospects.

I confess that uranium mining counters is not my forte, and I could never hope to write with authority on prospects for Uranium One’s many projects.

Uranium One though, is a legend in investment circles, and those fortunate investors that backed the venture early have made bucketloads of money. Despite the companies elevated investment status I have only passively followed the incredible progress of Uranium One and its leader Neal Froneman.

But there was correspondence relayed to me at the weekend that really spurred my interest in Uranium One. On Saturday I was alerted to share trading in Uranium One stock on the Toronto Stock Exchange (where the company has a primary listing) on Thursday and Friday.

On Thursday 21.8 million shares in Uranium One changed hands at prices between C$11.70 and C$10.14, and on Friday another 21.4 million shares changed hands at prices between C$10.68 and C$10.01.

What might raise a few eyebrows in these trades is that the volumes are at least five times higher than the recent daily average. If one scans the trading volume of Uranium One over a year then it’s plain to see the trades on Thursday and Friday as conspicuously large.

By contrast the trading of Uranium One on the JSE (where the company has a secondary listing) has been relatively muted in terms of volume, and I notice that only 100,000 shares changed hands on Friday.

So what’s going down at Uranium One?

Do the larger-than-average trading volumes represent a bail-out by investors? Or were the trading volumes perhaps simply a function of an institutional shuffling of portfolios? Could a rival miner or a private equity entity be building a position of Uranium One?

But with the persistent downward pressure on Uranium One’s share price lately, it’s difficult not to look bearishly at the large trades last week.

Certainly there’s no recent official company communication that contained information or even intimations that would spook a mass sell-off in Uranium One stock.

Of course, if one were to take a cynical look at the trading volumes on Thursday and Friday there may be a contention that some players in the market may have got a whiff of something unpleasant at Uranium One.

Digging around the various investor forums on the web it is noticeable that the chatter is still mostly positive around Uranium One. This is despite the fact the group’s share has waned markedly in recent months.

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If I could pick up any tangible negativity it was a suggestion that there is or was a problem with the commissioning of an autoclave (what that?) at Uranium One’s South African-based Dominion project.

Now information churned out on internet chat forums is the kind of stuff that should be taken with a pinch of salt.

But the massive trades in Uranium One in Toronto on Thursday and Friday – in volume terms 12% of the issued share capital and a whopping R3bn in value terms – are sure to get the market asking all kinds of questions.

If there was a hitch at Dominion (or any other leg of the mining operations) a corporate of Uranium One’s calibre would have surely communicated such a matter to all shareholders timeously.