good rcr report out, page-6

Maybe someone can help with that RCR report, I am a little confused about something.

The graph on page 2 “Extract Resources – Projected Net Asset Value” gave me a “WTF????” moment.

On the x-axis, the graph shows Resource Valuation in US$/lb U308 but only spans US$1/lb to US$5/lb.

On the previous page in the “Company Comment” section they say this:

“FSY was recently acquired by a private company through a cash takeover offer which values the resource at ~US$7.50/lb. In comparison, Rossing S is much higher grade, much bigger resource, possibly moderately deeper”

OK we all know about the FSY buy-out and we all have used that sale as a basis for our own forecasts.

My question is, if a recent sale yielded “~US$7.50/lb” for a much lower grade and much smaller resource why would you only show a graph up to US$5/lb and why would you place your target at US$3/lb ????

What am I missing here?

RS is more than twice the grade of FSY (I believe FSY averaged 190ppm) so you would expect much lower production costs per pound for RS thereby making the resource worth a hell of a lot more.

Of course time will tell but I stand by my original valuation and I maintain that we will have offers in the range AUS$13 – AUS$17 per share.

Before my friends jump on me, I agree that is too cheap. I’m just saying there will be offers in that range. Hopefully the major shareholders will hold out for a better deal.