Australia's largest stock trading and investment forum Australia's #1 stock forum

AGS

Click for more information

0.00%

17.5¢ alliance resources limited

Ann: Quarterly Activity and Cashflow Reports, page-164

First 164 Last

Share
Profile

Follow
Metalduster

7,851 Posts.

392

11/02/15

09:30

Post #: 14733451
Share

Originally posted by Metalduster ↑

"In the event AGS elects to make no further JV payments after 2014, its project interest is expected to fall on a sliding scale (based on a confidential algorithm) to 0% by 2026.
Over this period AGS estimates its attributable cumulative production will be 2.5Mlbs U3O8 with gross revenue of $110M (assuming US$40/lb U3O8, AUD 0.90)."

All, The above from the RCR Report.

This "confidential algorithm" based buyout agreed to by AGS's directors appears disappointing but is it? imo

From what has been announced through the ASX and from the RCR report.

AGS cops 2.5m lbs total for its share of Four Mile. Note 2.5m lbs out of a possible entire (AGS's share of Four Mile using approx. 112m lbs atm (72m lbs +(40m lbs?))) 28m lbs. That's what AGS forgoes if the announcements to the ASX are proper. imo

Using the available figures(RCR) that's a payout of $110m dollars for the entire Project.
(Note the falling Aussie dollar adds to the payout. atm)

and posters can argue that a rising U price will add to that figure but note imo that if the U price does not rise significantly in the first 1-2-4 yrs then it has minimal impact. imo

But back to the original $110m "offered by the BBros" and from the BBros side as I see it. That equates to around Four dollars a lb for AGS entire 25% (28m lbs)

So in actual fact the BBros have to, (using their $41 C2 approx. costing), sell Uranium for $45 a lb to break even. imo At that return(constant) it takes 12yrs Production(2.5m lbs) to negate AGS's payout. imo

Its debatable what Quasars actual costs are? but the Four dollars a lb is real for AGS's Share atm. imo

Sure its believed, its a bonus if AGS gets Sales rights and the possible return of the 25% but if that is the Case, it appears to me that as long as AGS stays in the J/V nothing will be proper.

Who knows what the Directors can achieve or be allowed to achieve by the BBros? They have total control.

So, winning the next Court action will allow what other than sale rights?

I don't know if the Damage was done with the taking out of the M&D C Matter or other but we're on a flogging to nothing, continually, by staying in the J/V imo The BBros don't become nice guys overnight, our fate is sealed. imo

Heres something I consider as well,
Ian Gandel holds exploration licences in his own right and Alliance Resources may become his vehicle for them in the future but that's for him, not for me, if that comes about. Only in my opinion.

The reason I say that is I don't see Alliance Resources being of value to anyone other than I.G. if AGS loses the next Court Action. Again In my opinion only. Chile wont inspire the Market, as is atm. imo

This post is only made to look at both sides of the equation based on that "confidential algorithm"

The accuracy could be all wrong as I have only spent the last 30-45 mins looking at it.

Corrections or other appreciated.

Md

Expand

Following on.....

The other side of the coin in losing the next Court Action is AGS has from 2016 15% of four Mile. ie The Reduction to 15% cannot be reversed. imo

Using the approx. 112m lbs estimate for Four Mile atm that means ACE has 16,800,000 lbs (15%) as a Saleable asset (ACE Jan 2016).

Would a buyer of the 15% pay 4-5-6-8-10 Dollars a lb?
Of course there is the Sales Return upto 2016 to consider as well.

At the last AGM JD told Shareholders present to "do the sums" with the Reduction Process as he was positive with it. imo

As it stands now AGS gets upwards of 110m with the Reduction Process as stated by AGS's ASX announcements.

That's the benchmark if AGS loses the next Court Matter.

Doing the sums with the saleable 15% I think we're rooted. imo

This post food for thought only. In keeping with looking at all angles for my investment and how the Market will/is value AGS.

Md

AGS Price at posting: 6.1¢ Sentiment: None Disclosure: Held
1 Upvote

0 Great analysis

Reply

Top Stories

The Big Deal: Free-to-air TV swings the axe, but will it be enough as enormous sports deal bills loom?

RHI

Red Hill Minerals Signs $6.5 Million Agreement with Peel Mining to Explore Curnamona Project, NSW

STN

Saturn’s stars have aligned for the gold explorer’s Apollo Project

TVN

Tivan and EARTH AI gear up to commence fresh drilling at Sandover lead-silver project, NT

ITM

Fast-track assaying yields 182 g/t gold for iTech at new NT play

LLL

Leo Lithium announces major divestment of flagship Goulamina project to Ganfeng

Week 27 Wrap: "Election year" is here as UK Labour win contrasts France; Trump wins immunity & annual report season hushes ASX

Climate change to drive market trends to the moon

Has uranium run out of steam? An update on nuclear markets & developments ahead in FY25

KGL

KGL sniffs 19% Cu from drilling at Rockface play in NT

First 164 Last

Add AGS (ASX) to my watchlist