Gday BT,
Hear me out here. You think WU has done a dirty on BLR shareholders when in fact WU will save BLR shareholders from losses. How?
Assume ablation works. Remember, Glasier sold ablation technology into BLR so he must believe it works.
Also we must believe WU will be in production soon. BLR in its presentations indicates HT will be in production in 2016 producing 1 million pounds. I doubt this but let's accept WU can produce 1 million pounds in 2016 from its mines and a little from HT.
We will not take any of the vanadium profits into these numbers. But the vanadium credits are massive.
Long term U contracts can be signed today for $50 per pound. Assuming ablation gets WU costs to $15 per pound, $50-$15=$35 profit per pound. At 1 million pounds per annum, this is $35 million. A normal corporate valuation is 10 times gross profit, or $350,000,000. Now let us assume the shares in issue are 17,000,000. This is about $20,50 per share. In US$! The current share price is C$4,50 per share, or about US$3.90. $20,50 /3,90 = 5.25x .
Remember these assumptions are only using $50 U contracts and only 1 million pounds per annum production.
Using $70 U contracted sales and $20 costs and 1,5 million pound per annum, this translates into US$44,11 per share versus today's price of US$3,90. Here is your Disallowed.
Most people believe uranium will be higher than $70 per pound on a spot basis. So imagine what the contract U price could be $80? $85? $90?
I believe that WU could produce 2 million pounds if the WU mines are in full production along side HT. Do the sums on 2 million pounds and a margin of $60 per pound using $80 long term contracted sales price and $20 total cost ! It is mind boggling!!! This is one of the many reasons to vote yes for the merger. Your 10+ bagger is already in your portfolio.
Cait
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