blr buying at the bottom of the market!!!

For the first time in several months, I bought shares today, a lot of shares, not a little. This news is bigger and better than I had hoped. Mike Haynes has pulled off a big score here. If one believes that the long-term uranium price will rebound to $60-$65/lb by 2015, then this acquisition is truly spectacular. Personally, I think the uranium price will bounce back to $80/lb, but maybe not until 2016.

The acquisition of the mill, fully funded with capital to spare, is an amazing feat in this market. Not only that, but at a premium to market. And an unsecured convertible note as well. Great job all around. Alex Molyneux and Mike Haynes make a great team.

Key takeaways for me are as follows:

Op-ex of $30/lb at the Hansen project could now come in around $25/lb, all else equal. And, the capital cost of refurbishing the acquired mill will be FAR LESS than permitting and building a new one. It could be as little as one-tenth the cost! [That's my guess only]. This mill will come into operation at the perfect time, in 2015-16, when uranium prices are significantly higher.

Here's something exciting not touched upon. Black Range will be able to toll mill third-party ores with the excess capacity at their mill. If one applied the operating profit from toll milling as a credit to BLR's operating costs, then op-ex could come in around $20/lb., again just my guess, but I believe the thought process is sound.

The mill has capacity to produce 2-3 million pounds of uranium annually. But, tailored to accept Ablated ores, the output of the mill could be larger-- Recall, (90% of uranium in 10% of mass), 90% less tailings, etc.

Back to the press releases-- BLR reiterated that multiple parties remain interested in field trials of an Ablation unit. I think that the possibility of some orders for units remains on track as soon as the 5tph unit is validated, (tested & results analyzed) which should be by the end of the year.

Additional stockpiles to Ablate, 415k pounds of owned stockpiles-- BLR will make a significant amount of money on these stockpiles as they own them outright. Not just a fee for Ablating someone else's ore, BLR could net $30/lb, especially if uranium prices move up.

With regard to continued funding of the BLR/Ablation JV, I think it important to remember that the JV is required to repay BLR for its expenditures in an 80/20 split until BLR is repaid. Therefore, cash flow in 2014 could be fairly significant and by then the company could be building multiple commercial scale units.

I have a lot more on my mind, but I will end the post here. Final note, now that BLR has arrived as a bigger and integrated player, a takeout is much more likely. One thing that's for sure, Alex & Mike will hold out for a good price. They are in this for as long as it takes to achieve fair value fro 100 million pounds of uranium resource and a highly strategic and valuable mill. The chances for a takeout next year just went up A LOT.