Pegasus Resources (PEGA.V): Is it Time To Invest In?

challande

Written By: Marc Challande

Francophone

Published : April  May 10th, 2022

Suppose you are looking for new opportunities, Pegasus Resources (PEGA.V) will interest you. The market downtrend that started last year brought many buy opportunities. Pegasus Resources Inc. is a diversified Junior Canadian Mineral Exploration Company focusing on uranium, gold, and base metal properties in North America. Nuclear energy can provide baseload power without the environmental damages that coal or natural gas emissions produce. It is also a stable energy source compared to solar and wind energy, which varies. 

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Uranium Sector Will Grow Thanks to Energy Needs

According to the International Atomic Energy Agency (IAEA), the high case projection has global nuclear-generating capacity increasing from 392 GWe in 2019 to 475 GWe by 2030, 622 by 2040, and 715 by 2050. Choosing nuclear options can result in several cases, whether it be for environmental or electric freedom. Recently, European countries have suffered from energetic dependency as many countries bought Russia’s resources. According to the Nuclear Power Association, about 440 nuclear power reactors operate in 32 countries. About 55 power reactors are currently being constructed in 19 countries, notably China, India, Russia, and the United Arab Emirates. About 100 power reactors with a total gross capacity of approximately 100,000 MWe are on order or planned, and over 300 more are proposed. Currently, most reactors are in Asia, with fast-growing economies and rapidly-rising electricity demand. About 30 countries are considering, planning, or starting nuclear power programs.

Pegasus currently holds five Uranium properties located northeast of the prolific Athabasca Basin of northern Saskatchewan: 

  • The Wollaston Northeast Property: located about 45 km northeast of the Eagle Point Uranium Mine;
  • The Bentley Lake Property: is located approximately 35 km northeast of the edge of the Athabasca Basin.
  • The Mozzie Lake Property consists of two claim blocks situated approximately 25 and 40  km northeast of the edge of the Athabasca Basin.
  • 147 lode mining claims located on lands managed by the United States Forest Service in Fall River County, South Dakota. 

The company owns plenty of other projects, including:

  • the Energy Sands Project: the project consists of sandstone-hosted uranium and vanadium mineralization with demonstrated potential to establish resources;
  • the Golden Project: the project features three properties located along the British Columbia – Alberta border;
  • The Millionara Project: the property is approximately 25 km northwest of the Jerritt Canyon Gold Mine, recently purchased by First Majestic Silver Corp. in a $470 million-plus share deal. Jerritt Canyon has produced over 9.5 million ounces of gold since 1981.
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Many Significant News

Over a month, PEGA reported much great information:

April 12th, 2022: PEGA acquired 147 lode mining claims (approximately 3,037 acres) on lands managed by the United States Forest Service in Fall River County, South Dakota. Claims were optioned from Cowboy Exploration and Development, a Wyoming-registered LLC, in an all-cash deal, US$1,500,000 for 100% ownership payable over three years. Mineralization is hosted within typical roll front–type deposits in the Cretaceous-age Fall River and Lakota formations. The contiguous claim block covers Uranium mineralization drilled by Union Carbide Corp (UC) in the late 1970s. (Further information here)

April 19th, 2022: PEGA announced that it had received permit approval from the Saskatchewan Ministry of Environment for the initial exploration at its Pine Channel Uranium Project, located in the Athabasca Basin region northern Saskatchewan. The fieldwork is expected to commence as soon as ground logistics allow. The first phase of work will include ground radon and ground gravity survey on the Pine Channel Uranium Property. The RadonEX survey has previously identified exploration targets on the Patterson Lake trend for Fission Uranium and Nexgen Energy, leading to the discoveries of the Triple R Zone and others. (Further information here)

April 25th, 2022: PEGA announced that it had commenced the application process for permits to start an initial program at the Mozzie Lake Uranium Property. This project is part of a four-project land package that Pegasus has and is located immediately northwest of the prolific Athabasca Basin of northern Saskatchewan, which includes a historical resource estimate of 204,200 tons at 0.119% U308 at an average width of 15.8 feet (4.8 meters), containing 535,718 pounds of uranium. (Further information here)

Fundamentals

The company reported on April 28th its earnings for the nine months ended February 28th, 2022. PEGA announced it had $2.4M in total assets for only $514k in total liabilities. Compared to their last earnings, the company informed they had less cash, passing from $138k to $10k. Besides, the company has more than $500k worth of marketable securities: the company held 104,000 common shares of Imagine Lithium Inc., valued at $13,000, and 816,993 common shares of Trillium Gold Mines Inc., valued at $404,412. The valuation of the remaining shares resulted in an unrealized loss of $145,240 (2021 – $50,386) during the period ended February 28, 2022.

About the share structure, the company has 90.5M shares outstanding for 123.3M shares fully diluted. This number is average for mining companies, and they usually need to raise cash through private placements. The company also has 9M options for a weighted average exercise price of $0.05 and 23.8M warrants for $0.08.

 

Share Movement

Currently, the company is traded at $0.06 for a $5.5M market cap. The stock underwent a downtrend after reaching a 52-weeks high of $0.11 during the last uptrend. Its 52-weeks low is $0.035. According to the chart data, the stock price is still considered bullish despite the downtrend. The Simple MA (20) is at $0.08, above the Simple MA (200), at $0.06. Soon, the stock could enter bearish territory as the RSI data (37) is approaching the oversold region (30). We could witness broad fluctuations. With the Bollinger bands, we can determine the stock price could currently fluctuate between $0.06 to $0.11. The stock will need some time to consolidate.

About the volume, it considerably decreased with only 200k shares traded on the 10-days ADV vs. 340k shares traded for the 3-months ADV.

Bottom Line

The company is making the proper expansion/acquisition, and the current valuation does not represent the company’s growth potential. With the current bearish times, we could wait for some time before many investors jump back on junior exchanges. On the bright side, it allows you to add more shares and have a low average. Uranium will be much-demanded overtime. In the future, Pegasus Resources will attract many investors.

This article solely expresses the opinion of the writer which might be disagreeing with the other writers of Money,eh?. Moreover, the writer is not involved in PEGA, and does not own shares of the Company.

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