spot price moving up fast - now at $27+. Utility supply concerns...

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pezsaz

362 Posts.

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28/03/20

07:44

Post #: 43745294
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Originally posted by pezsaz: ↑

$60 at 70c AUD gives NPV of $500+m. $60 isn’t a break even or cutoff. The economics work well for bank support even at $55. And even better again at AUD < 70c.
fbx, the few of us that post here, like yourself no doubts, have been in and around uranium and investing for 10-15 years plus. We get it mate. We get the market so not sure your hard and mono-lined comments work that well. Risk in uranium is high and frustrating. Picking the timing in such an opaque market is hard. That said, we all know when U goes it will be fast and huge. Vmy is outstanding risk reward. 90m pounds asset at 500ppm is top quality. And only $20-$30m market cap for this ?. I am long and accept the strategy for now. Apart from waiting for the U price/industry contracting to move, VMY itself has plenty things going well;

- Secondary approvals will be gained in Q2.
- Management are outstanding. I have met and discussed at length with half the team. Scott is actively and proactively engaged
- Alligator River has strong upside potential. Utilities looking for huge supplies to partner with
- International & sovereign risk supports Australia
- there are choices and options on capex too. It’s not rigid. Eg. capex optimisation and triage review gives options if required to pivot I.e we could lease equipment instead of buying. Drop output for the first 3 years to say, 2.5m p/y etc etc to reduce plant & equipment. this could see capex drop to $200m AUD. couple lower capex with a very low open/ASIC...
- 1st contract likely to be signed in next 6 months

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spot price moving up fast - now at $27+. Utility supply concerns being exposed and triggered via covid19 mine shutdowns. And Australia’s sovereign profile becoming materially more attractive daily, given recent Russian energy tactics targeting US shale oil. This may be the start of something larger in the U space, especially for the (only) few high high quality Australian U companies

- Am expecting Mulga Rock secondary approvals to be completed in Q2
- capex requirement to be reduced
- our first contract by Q3
- and would be nice to see spot $30+ by Q3. Currently up $3.00+ in last fortnight

fundamentals are in our side.
Stay patient and safe.

VMY Price at posting: 2.4¢ Sentiment: Buy Disclosure: Held
5 Upvote

1 Great analysis

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