Whether $185M is overpriced is its own question but, in isolation, the idea of targeting LT contracts @ $65/lb isn't insane, w/ downside illustrated here by $45/lb contracts constituting 0% IRR. By means of comparison, Boss Energy frame their feasibility studies in terms of a $60/lb contract price, of course their margin is much safer, but it's indicative of what producers believe is a reasonable middle-upper end. For reference, typical current contracts are in the high $30s, though I've seen existing LT contracts being sold into at $50/lb+, presumably leftovers from a while ago.
The whole sector currently draws interest on the basis of a theorised looming uranium supply deficit, hence why most miners are up anything from 100-500% since mid-2020 despite only a 50% move in the spot price. At current prices, every uranium stock is something of a risk if this thesis doesn't play out, but BMN represents an even higher conviction investment, roughly equivalent to an OTM call option on that thesis. Relative to similar companies, it offers better multiples in the event of contracting actually occurring at $65/lb or higher, & even the threat of these multiples should increase the company's valuation if/when we see contracting at, say, $55/lb. With that said, stagnant spot price or slower-than-expected thesis progression could hurt a lot. Dates to watch are October (I believe quite a lot of contracts expire & need renegotiation around this time) and ~Q1 2022 when SPUT lists on the NYSE.
I hold a small amount of BMN as part of my broader uranium portfolio to represent some exposure to this upside.
FWIW Rick Rule in the past has rated this pick as average-to-above-average, obviously take his public statements with a pinch of salt but if you google you'll see most of his "scores" in the 5-7 range (lower = better) and BMN rated 5, very few rated 4. Doesn't mean it's a good company but it's not a joke prospect either. His current view of the sector is that juniors as a group are slightly overheated though (or was prior to the ~25% pullback we've seen over the past few months anyway).
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