I value ERA at $3.54 per share, and ERA rights at 48 cents each.

I value ERA at $3.54 per share, and ERArights at 48 cents each.

Here’s how/why, in three steps:

Step 1. Uranium will be worth USD$60/lb in 2021 (assumption).

Although unpopular in the West,much of the Eastern worlds populated areas (China, India, Russia, Indonesia andeven the Middle East) are currently building nuclear reactors. Japan isgradually turning its nuclear capacity back on and it is understood evenGermany is importing nuclear power from heavily nuclear France.

More than 10% and up to 20% ofAmericas energy comes from uranium.
Stockpiles and tailings of uranium are expected to run out by 2021.
At that point, if a fair price for uranium mining is not paid, (US$60 perpound) uranium will stay in the ground and Americas, China's and India's lightswill start to go out.
It follows that in 2021, the uranium price will rise to $US60 /pound.

Step 2. At US$60/lb, ERA is worth$3.54 per share (This does not include any value for Jabiluka, which has afurther 50 years proven resource at a similar annual production rate).

Ranger 3 deeps has 25 years of mine supplyready to go but mothballed.
Jabiluka has another 50 years mine supplyalready discovered.

Ranger3 Deeps is pretty much ready to go - maybe 6 months to get it out of mothball.
Then it produces 2500 tonnes U per annum for 25years.
At US$60 per pound (see earlier post) and an NPmargin of 25%, equals annual Net Profit of US$82.5m or approx AUD $122m.
At a PER of 15, the company is worth $1,830m.

Forpre -issue shares of 517m, ERA value per share is $3.54.

Plusapprox AUD$1 per share for every US$15 revenue over US$60/per pound: egshare price equals $5.31 for Uranium price US$90/lb.

NB: This does not include any value forJabiluka, which has a further 50 years proven resource at a similar annualproduction rate.

Workings

AtUS$60 per pound, and 25% NP margin, value is:
2500 x 1000 x 2.2 x 60 = US$330m revenue
=> 330 x .25 = US$82.5 NP
=> 82.5 / 675 = AUD122m NP
=> 122m x 15 = AUD$1830m valuation.
1830m / 517m shares = AUD $3.54

Step 3. If ERA is worth at $3.54 pre-issue,the rights are worth $0.48 cents each, as a matter of arithmetic.

The 6.13 for 1 rights issue will be (obviously)highly dilutive, but would still make ERA shares worth A$0.63 post issue, as amatter of arithmetic.

Workings
Value currently 517m x $3.54 = A$1830m
Issue 517 x 6.13 = 3169.2m new shares raisingA$475.38m
$1830 + 475.38 = $2305.38m
517 + 3169.2 = 3686.2 total shares post issue.
$2305.38m/3686.2 shares = A$0.63 per share postissue fully diluted.

Thereforethe ERA rights would be worth 48 cents as a matter of arithmetic. 48 cents isthe difference in value between 15 cents (the issue Price) and A$0.63, (theestimated post issue value).

NB:

1. This value ascribes zero value to Jabiluka, which in myopinion is worth the same again as my value for ERA.

2. The circa $800m rehab cost is a wash – post issue, ERA willhave the cash on deposit to meet the rehab liability.

3. The company has no debt.

4. This is my personal view only and is not investment advice.