I dont get it
Why would anyone want to pay $150m market cap for about $5 gross margin per lb produced, which is about 800,000lb a year capacity so what's that? $4m gross profit? Likely no profit after corporate costs?
This company is worthless is U prices go sideways. This is a big problem, because prices have risen a hell of a lot vs long term averages already, and existing producers are already scheduling ramp up in capacity.
Clearly you need to think carefully about this lowest cost quartile producer statement.
Is that based on just the number of producers / potential producers? I want to see cost profile vs a weighting that's based on actual capacity to produce. I think we would be surprised. I think existing low cost producers have enormous capacity and have been waiting for long term prices to catch up to spot before committing. It's not an issue with their own cost profiles, but an issue with spot and long term prices varying significantly.
Sure this would be good if U prices and long term prices soar. Probably not the best leverage, plenty of other U names offer better prospects.
But if U prices don't soar... watch out below..........
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