Current long term price for Uranium is approx. $40 per pound and the all in production costs are $32 per pound, so let's say $8 profit per pound.
At enhanced production of 2,450,000 per annum x $8 = $19.6million potential profit
$19.6m x 10 = $196 m Market Capital at PE of 10 (currently $183.2m @ 10 cents per share)
or $19.6m x 15 = $294m Market Capital at PE of 15 or approx. 16 cents per share.
or $19.6m x 20 = $392m Market Capital at PE of 20 or approx. 21 cents per share.
What I think is interesting is if the Long Term Price increases by approx. 20% to $48 per pound then our profit per pound increases by 100% to $16 per pound. This is what will ultimately affect where our share price will go. If they do a 100% offtake @ $40 per pound, then our share price is most likely to be within the range above. At $48 per pound then you could effectively double it as the profit would double to $39.2million per year.
If the Uranium bulls are correct and Long Term Uranium Prices keep rising to figures to $65 per pound as per this Morningstar Analysis Report from 4/11/2020. Then that would be approx. $33 per pound difference X by 2,450,000 annual production = $80.85 million potential profit per year - which would lead to share prices between 44 to 88 cents per share.
Interesting side note is that from 4/11/2020 to this Quarterly report is that Uranium Price has moved from $35 to $40 per pound.
The full article is in the link below:
http://analysisreport.morningstar.com/stock/research/c-report?&t=XNYS:CCJ®ion=usa&culture=zh-TW&productcode=QS&cur=&urlCookie=8997523520&e=eyJhbGciOiJSU0EtT0FFUCIsImVuYyI6IkExMjhHQ00ifQ.eY-s57E4rNn2aO0mdtQy4usd4MgSf5udSvrSfPlx1CR8UvQL-J2fAl-VM8li_sYc2QXO6QycfEv8yVzZ2N7bvNHC1yYrw-7azD4-Pf7enaNTK3hrGGLRpuQvnb2fsYaVrl-rfNY9qF3MT8zv4yY_C5NnYALL7i3LU5WCtOqboUw.iwvYb9QzHz9tiTU6.b1EtzaNCVJLTwN7nrWWU9ZQn7_OGtfjIvpEdxG7NfHa1yz5DACf2DqQpY81QZyqOxd0tKNnorEdis7OdtDYff3cciQOYIv1UMV7KsWI5niMGxHHw1nh4ozFv3nYYdqLDS71TH6mxu-rpQGcH18aD8HBBdTvFussfYiSI7U88YebdZhlGyZVxBAiYvgZteGXZN1xQKJTWc1Z2pQPdzn9-KaIDqVz2XsG87r6LOGk.SkvwYrJFtA4f2pft6D_Jxg
Fingers crossed for an interesting year ahead. Live long, be kind, and prosper.
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