Whatever the true reason, selling pressure is just noise and the stock will converge to its fair value, whether the large shareholders sell 0 or 100 million shares. For me, the proper question to be asking is what is the fair value of the stock? Could approach this in a number of ways, but one back-of-the-napkin approach is as follows.
Start with a comparable stock, in this case Bannersmans, which has one uranium mine also in an African jurisdiction.
Then, use the 15 March share price as a reference point. Why 15 March? On 18 March, Bannermans announced an expanded scoping study, which complicates the comparison. 15 March seems like a cleaner reference point, with less moving parts to analyse. It's also a date by which point the uranium spot price had stabilised to somewhere in the 80s, in line with the relevant FEED studies.
On 15 March, the share price of $2.99 was a market cap of about AUD$450m. Looking at the most recent investor presentation before that date, the post-tax NPV assuming $80/lb was USD$435m.
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02743538-6A1182023The USD NPV translated to roughly AUD$661m. So, the market was discounting the NPV by about 30%. That all makes sense to me.
Now, looking at the Aura feed study, the post-tax NPV of Tiris (also assuming $80/lb) is US$366m:
https://www.investi.com.au/api/announcements/aee/d9122934-05d.pdfApplying the same discount to NPV, fair value is about AUD$550m, or $0.70 per share. That ignores Haggan.
The true picture of course is more complicated. I can accept that Aura deserves a bigger discount to NPV. But even a 50% discount to NPV works out to be a share price in the 30s.
For the bears out there, what's the case that the true value of the stock should be where it is now, or lower?
(20min delay)