conundrum

The market is pricing Bannerman with a very low chance of a mine being built. I mean, we are talking US$100M MC for a company sitting on +200Mlbs U. Even if OPEX cannot be lowered - let's call it US$40/lb. Using a long term contract price of US$70/lb (very realistic and most likely conservative). We have a pre-tax profit of US$30/lb. 6M lb/annum * $30 = $180M. $180M - 30% tax (??) = $126M. $126M * 80% ownership = US$100.8M/annum net profit. Give it a 10X multiple and we're looking at a US$1B Market Cap. (10X where we are now). Bear in mind, this is giving absolutely zero weight to the supposed "nuclear renaissance" we are on the doorstep of, and the U price increase which would invariably follow.

This is all well and good and it looks like huge upside, but the question is (and this is where I believe the biggest problem lies, a conundrum if you will) - How will the mine be financed?? How will BMN come up with US$555M?? It's obvious there would be massive dilution should even 50% of the cash come from new share issues. And the lower the share price, the more money must come from "mystery source" (or face even worse dilution). So the SP falls, people sell, new investors reluctant to get in now, the SP falls more....... Usually at a certain point, once the SP falls low enough, new investors will step in citing unrecognized value. But in this case, the lower the SP, the less value there seems to be....and it is a run away snowball. I mean, how else can you explain this price action? Why haven't investors stepped in and said enough is enough yet? There is no confidence this thing will be a go. I think there would be a lot more action from new invetors (Instos and the like) if BMN was 2-3 bucks (where it probably should be) and they new BMN could handle 50% CAPEX coming from new shares/ 50% debt, but......

BMN needs a strategic partner and some commitment from a third party to help finance this thing - and soon. Forget about drilling updates, ming licenses, and all that jazz. The market clearly doesn't care. They want to know where the CAPEX is going to come from. I would say this thing is a screaming BUY...but then again, I said that 6 months ago. Good luck to all