we're going mining >> 6 month price target

Alright first of all let me say a few things.

1. To those who are doubting the grab samples, I hope you realise that this is not rock chip samples that have been announced, but rather something closer to bulk samples. In a reef/vein mineralisation, these are often a better indicator of product grade than drill assays because it reflects what it is exactly that is being mined and sold.

2. Jason Brewer is a real professional. He will get the word out there about URA. He probably won't work in as much of a capacity as he is famous for with CCC, but I trust that he will bring a wealth of experience to this company.

Now onto the fun part...

6 MONTH URA PRICE TARGET
SPOT PRICE

55%+ MnO2 is simply outstanding. A >45% MnO2 lump product sells at $7/dmtu. If we can consistently mine and sell a product >45% MnO2, then we are looking at a sales price upwards of $315/t. A 55% product should in theory attract a price of around $385/t.

Did anyone notice that we have 0.6g/t+ of gold as well in the grab samples? When we ramp up to full production in 6 months, thats another 1koz per annum of gold credit to URA in our product! It's probably not worth much because we are selling the product as a lump, but its worth mentioning anyway for interests sake.

OPEX

I'm going to assume that URA can operate at a similar efficiency to the likes of SRR, who plan to produce at $120/t. In theory, URA's OPEX should be a lot lower than this because freight charges are lower given the short transport distance of 8km, and we are a DSO operator with low processing costs. In other words, our OPEX is probably sub $100/t, but lets go with $120/t to be 'conservative'.

CASHFLOW ESTIMATE

* Operating margin ~$140/t (Zambian Company Tax of 35%)
* 51% WI

First 6 Months

* ~1k tonne per month
* Operational cashflow of $140k per month
* Roughly $840k free cash

March 2012 onwards...

* ~5k tonne per month
* Annual free cash of $8.4M
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Admittedly there will be overhead fees, director remuneration and also exploration fees, but I dare say that we will probably make a NPAT of around $5Mpa from this stage one operation of what I'm sure will grow into something even bigger and better with four other prospects to add to the production line over time.

A while back I crunched a few numbers and came up with a very rough resource of about 1Mt to 3Mt. Given the surface mineralisation, I reckon that most of this will be recoverable to sell. At 120ktpa, I'm pretty sure that this mine could run for a good 10-15 years if they keep things in check. In other words, the market will probably pay a PE of around 7-8 on the earnings from this prospect, or value URA with a market cap of around $40M.

After the prospectus and JV agreements are signed of on we will have, I believe, about 500M shares on issue, plus 230M options. Fully diluted, URA would have 730M shares on issue.

In other words, we have a price target of around 5.5c/share for March 2012. Now that might not look as 'explosive' on paper as some may have been hoping I'd say, but let me remind you that there is upside in this price target through many avenues...

1. Price target doesn't include cash backing from first 6 months of production, and any cash in the bank.
2. Doesn't credit any value to the U project.
3. Doesn't account for a potential ramp up in production from the 4 other projects.
4. I'm working on quite a low PE ratio.
5. Most importantly, I am assuming a highly inflated OPEX. Shovel and truck operations are very cheap to run if they are done so properly, and as we are a DSO seller, we do not need to worry about processing fees, which are often a major contributor to operation costs. While I have assumed an OPEX of $120/t, I would not be surprised if that figure is around $50-$70 per tonne, which would add another 30%-50% to our margins, and add about another 1.5c-2c in enterprise value to the company (i.e. price target closer to 7/7.5 cents).

Right now, given that we all get to load up at 2.2cents and receive a free attaching option with an ex price of just 3 cents, I will happily take 5.5c as a target for the next 6 months!!

Cheers,
5hareholder, a very pleased URA holder.

N.B: The following risks have not been accounted for in the aforementioned price target.
* 3% maintanence downtime (-0.2c/share)
* <100% recovery. This probably won't be a problem for us as a DSO operator, but we could instead undercut the production targets. Naturally this price target assumes that production targets are actually met!
* CAPEX requirements for production ramp up