here is why price is moving, page-21

re: dynofish: here is why price is moving Geldmangel

Just one point on your last post yesterday. It was stated at the AGM that the likely path for mining of the B4M deposit is open cut rather than ISL. It was said or implied by the commentary that ISL was originally promoted by Heathgate when they wanted to mine at Beverley because:
1. ISL is environmentally friendly with virtually no surface impact (better for Govt and indigenous people issues).
2. The very low price of U3o8 at the time of USD8 lb meant they had to have an economic process and ISL has a cost of only $4 lb.

The recovery rate of the uranium from this process was said to be poor (no figures given). But with U3o8 at USD60 lb, the potential cost of open cut mining can be covered and the much better recovery of the mineral will mean a significantly better overall feasibility (IRR).

The downside to this is the potential high pre-strip cost before cash flow, and that to me means capital required. It was commented that the banks' requirements for contracts/hedging (rather than spot sales prices) etc could be overcome with more equity. Not sure this has been well thought through by the board. At least that was the impression I got. The second downside, if one can call it that, is that open cut would mean B4M could not be simply regarded as an extension of Beverley.

Nevertheless, I am much happier with the open cut approach to extract max value for our asset. Seems Heathgate is already talking to the SA government about development of B4M, so the change in mining technique is not seen as an obstacle because SA government are supportive.

regards
DF