Bannerman (BMN) Yellowcake leverage
Uranium developer Bannerman (BMN) delivered a Pre-Feasibility Study (PFS) for its 80% owned Etango project in Namibia.
The PFS articulated higher than expected operating costs of US$38/lb for the first five years, and US$41/lb over the life of mine (LOM). Argonauts expectations were US$35/lb LOM.
The market responded viciously, marking the stock down from $1.15 to $0.63 in three trading sessions.
Although BMN deserved some pain, the market has over-reacted. Etango retains a number of redeemable features:
Size The remodeled resource (Uniform Conditioning method) of 152Mlb @ 227ppm enables a large production rate of 5-7Mlb pa over a +16 year mine life
Exploration upside - >30km of prospective alaskite stratigraphy
Rigorous costs The US$25-$35/lb operating costs often quoted by junior uranium competitors could prove optimistic when subject to more rigorous studies
Flotation concentrate option Laboratory scale test-work has demonstrated 5-6% mass pull, if proven on a larger scale this could lead to significant capital and operating cost reductions
Ultimately BMN is a highly leveraged play. At Argonauts long term uranium price forecast of US$70/lb the stock is valued at $1.01. At US$80/lb the valuation rises to $1.77 and at US$60 it falls to $0.24. Current long term prices are ~US$65/lb.
BMN offers patient believers long-term uranium leverage.
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$3.26 |
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Mkt cap ! $489.1M |
Open | High | Low | Value | Volume |
$3.24 | $3.27 | $3.13 | $3.422M | 1.071M |
Buyers (Bids)
No. | Vol. | Price($) |
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4 | 1466 | $3.25 |
Sellers (Offers)
Price($) | Vol. | No. |
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$3.26 | 3836 | 14 |
View Market Depth
No. | Vol. | Price($) |
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7 | 4404 | 3.240 |
9 | 6307 | 3.230 |
7 | 20526 | 3.220 |
4 | 12936 | 3.210 |
5 | 42070 | 3.200 |
Price($) | Vol. | No. |
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3.250 | 6023 | 10 |
3.260 | 5778 | 12 |
3.270 | 16547 | 14 |
3.280 | 2575 | 2 |
3.290 | 6050 | 2 |
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