dollar coming up, page-26

Vayama

Thanks for the back of the envelope analysis. Assuming royalty payments are included it’s probably as good as anything given the vagaries of uranium price projections.

Depending on the analyst you talk to, the price in several years time could be anywhere between USD 50 / lb and USD 500 / lb. Below the lower mark, the economically retrievable resource (at 4 Mile and elsewhere) drops significantly. Above USD 100/lb there would be a significant increase in resource. Deutche Bank projections (notoriously unreliable) are, I think, for an increase to USD 75 in 2011 followed by a drop to USD 50 / lb in 2013. Who knows but at a long term average of say USD 75 / lb (in 2009 currency) my gut feel is that both suppliers and customers will be happy. For this reason I’ll conservatively stick to an average of USD 75 (inflation adjusted) for my own guestimate of value over a 20 year (probable) mine life.

We also need to remember that cash from 4 Mile may be used to pick up a wide range of distressed resource assets elsewhere THEN quickly ramp up production on those assets. AGS is not a simple dividend payer.

There are lots of other factors to consider including POO & peak oil theories, carbon taxes and improved technology to produce more power per pound of uranium. Then there are the issues of the global credit depression taking about 10 years to work itself though, predicted USD collapse, and energy stocks (including this one) being viewed as a hedge against high long term inflation.

Cheers