Bannerman (BMN) Yellowcake leverage
Uranium developer Bannerman (BMN) delivered a Pre-Feasibility Study (PFS) for its 80% owned Etango project in Namibia.
The PFS articulated higher than expected operating costs of US$38/lb for the first five years, and US$41/lb over the life of mine (LOM). Argonauts expectations were US$35/lb LOM.
The market responded viciously, marking the stock down from $1.15 to $0.63 in three trading sessions.
Although BMN deserved some pain, the market has over-reacted. Etango retains a number of redeemable features:
Size The remodeled resource (Uniform Conditioning method) of 152Mlb @ 227ppm enables a large production rate of 5-7Mlb pa over a +16 year mine life
Exploration upside - >30km of prospective alaskite stratigraphy
Rigorous costs The US$25-$35/lb operating costs often quoted by junior uranium competitors could prove optimistic when subject to more rigorous studies
Flotation concentrate option Laboratory scale test-work has demonstrated 5-6% mass pull, if proven on a larger scale this could lead to significant capital and operating cost reductions
Ultimately BMN is a highly leveraged play. At Argonauts long term uranium price forecast of US$70/lb the stock is valued at $1.01. At US$80/lb the valuation rises to $1.77 and at US$60 it falls to $0.24. Current long term prices are ~US$65/lb.
BMN offers patient believers long-term uranium leverage.
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$2.91 |
Change
-0.120(3.96%) |
Mkt cap ! $511.5M |
Open | High | Low | Value | Volume |
$2.96 | $2.97 | $2.89 | $1.157M | 397.8K |
Buyers (Bids)
No. | Vol. | Price($) |
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11 | 16073 | $2.90 |
Sellers (Offers)
Price($) | Vol. | No. |
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$2.91 | 10552 | 21 |
View Market Depth
No. | Vol. | Price($) |
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11 | 16073 | 2.900 |
15 | 8038 | 2.890 |
11 | 28725 | 2.880 |
8 | 20359 | 2.870 |
7 | 7103 | 2.860 |
Price($) | Vol. | No. |
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2.910 | 10552 | 21 |
2.920 | 16860 | 16 |
2.930 | 8880 | 8 |
2.940 | 18819 | 7 |
2.950 | 3175 | 2 |
Last trade - 11.35am 19/07/2024 (20 minute delay) ? |
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