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17.5¢ alliance resources limited

i had spot at US$36.6 and long term at US$46.50. the average of...

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ddzx

37,911 Posts.

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10/07/15

12:46

Post #: 15613367
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Originally posted by Damo79 ↑

Hey ddzx, thanks for the input. I think it's a great idea to use such figures to come up with a "fair value". I'd like to make a few comments on your post if that's ok. Please feel free to reply.

First, don't you mean to say, "if it excludes" what they are owed? The current offer already includes it. I.e, you think $3/lb is a good deal, plus they should get money from their uranium already mined, which should make a fair offer about $110 million?

I think the expected recovery is more like 80-90% for this grade, rather than the 60% you used.

Also, the $40/lb includes $10-12 of "delineation" drilling, which will facilitate future production. Actual operating costs are less than $30/lb.

You said that "spot and contract" price is $55/lb. It sounds like you're assuming the majority at spot, which is not realistic. Current spot price (at 0.75) is $49/lb, while contract price is $65/lb. Also remember that the mine life appears to be 20+ years and there is a widely expected uranium shortage and concomitant price increases in the future.

Any value assigned to the exploration potential? Only a small proportion of the lease has been explored.

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i had spot at US$36.6 and long term at US$46.50. the average of both is US$41.50 or A$55

AGS Price at posting: 11.5¢ Sentiment: None Disclosure: Held
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