UPDATE 1-RESEARCH ALERT-UBS raises Uranium One to buy

June 16 (Reuters) - UBS raised Uranium One to 'buy' from 'neutral' and said the miner's agreement to buy 50 percent of the Karatau uranium mine in Kazakhstan would help mitigate the company's relatively high political risk in the country.

On Monday, Uranium One inked an agreement for purchase of the stake in the Karatau uranium mine from JSC Atomredmetzoloto, the Russian state-owned uranium mining company.

Uranium One now has another partner in Kazakhstan, UBS analyst Brian MacArthur said.

However, he cut his price target on the company's shares to C$3.70 from C$4.50 on valuation.

'We note the shares have depreciated 22 percent on a one-month basis due to uncertainty related to the Kazakhstan government's investigation into the former head of state-owned uranium miner Kazatomprom,' he said.

In May, state uranium company Kazatomprom head Mukhtar Dzhakishev was arrested and accused of illegally selling deposits to foreign companies.

Uranium One's stock fell nearly 40 percent after the arrest when Kazakh officials singled out one of its deals for investigation, but Kazatomprom has said no existing agreements would be changed.

Uranium One shares were up about a percent at C$2.97 Tuesday on the Toronto Stock Exchange.

(Reporting by Krishna Chaithanya in Bangalore; Editing by Aradhana Aravindan) Keywords: URANIUMONE/RESEARCH UBS ([e-mail]; within U.S. +1 646 223 8780; outside U.S. [phone]; Reuters Messaging:[e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.