Im putting myself in Hanlongs shoes to consider whether to them, Bannerman is a great buy at 61.2c For Hanlong, it will cost roughly 160m to buy + 700m to construct the plant = 860m I have rounded up to 900m and to take into account the time value of money, using a 10% annual interest we get 3.8bn. So Hanlong could take that 900m and invest elsewhere to end up with 3.8bn in 15+ years time.
If we say BMN can comfortably extract 125m lb over the mine life, we get a price per pound of $30, add the opex of $42 lb
$72lb
This is a very simple way to identify the costs to Hanlong…obviously some of the plant will be made of debt funding ect but that’s the general gist of it.
Hanlong is able to secure long life guaranteed uranium at $72lb while the spot rate is at ultra lows of $52lb….IMO, the spot will eventually climb back to around $70-90 within a few years and this pushes the long term rate higher, so IMO, Hanlong would be silly not to proceed, BMN is a BUY for me
BMN Price at posting:
38.0¢ Sentiment: Buy Disclosure: Held
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