Sunday, July 13, 2008


USEG is a US based company focused on mining and drilling for resources including mylobdenum, uranium, gold, oil, and gas, as well as real estate operations.

Market Cap: $66 million
Cash on hand: $73.95 million*
Debt to Equity: 9%
Dividend: NA
Book per Share: $4.80
Cash per Share: $3.12


Molybdenum Mining
USEG holds 100% interest in a massive deposit of molybdenum called the Lucky Jack Project. Mining has not yet begun and production is expected for 2012.

Oil and Gas
USEG has formed several partnerships with US based drillers. One: a 20% interest in two new wells currently being drilled by PetroQuest. Two: A 4.55% interest with a private, Huston -based driller. Drilling is anticipated for 2009. Three: the Company is actively searching for quality partnerships in an effort to create a better return on the large amount of cash on hand.

USEG sold its stake in Uranium One in April 2007 for $100 million. The Company expects further payments and royalties: $20 million when production begins at Shootaring Canyon; $7.5 million on first commercial uranium delivery; up to $12.5 million in royalties when Canyon is fully operational.
USEG also holds a 4% net profit interest in Rio Tinto's uranium mine in Wyoming.

In June, USEH sold its stake in Sutter Gold Mining Company for $5.4 million Canadian. This payment was not included with the 'Cash on Hand' figure above.*

Real Estate
USEG is developing a 216 unit multi-family facility in Gillette, Wyoming. As of March 2008, the prject was 60% complete. The Company also owns an undeveloped piece of land in Riverton, Wyoming adjacent to its headquarters. Plans are under review. USEG is considering other potential real estate operations.

It's difficult to value this company on earnings or cash flow because USEG rarely has any consistency in these categories. Usualy, valuing hard assets like real estate and mineral rights is too difficult but USEG has made it easy on us: Buy the stock below book value and cash value and the rest of the stuff is free. Consider buying anything below $3.00 per share.