"""""""""""""The following shows the 4 key deals that have been announced since Fukushima, on an EV/Resource (US$/lb) basis: • RIO/Hathor $10.74/lb • CGNPC/KAH $4.45/lb • Hanlong/BMN $0.88/lb • ARMZ/MRU $9.19/lb
At first sight, there doesn’t seem to be much consistency across this sample set. This is mainly due to the vastly different capex requirements of each project. For example, KAH/EXT's Husab project requires a huge US$1.7bn of capex vs Hathor at US$458m, BMN at US$562m and MRU at US$298m. Therefore, it is important to add the capex requirement to the EV to ensure the multiple takes into consideration the future financing requirement. When I do this, there is more consistency as shown in the following chart:
As you can see, the MRU and KAH deals are being struck around US$12/lb, when I adjust for capex. """""""""""""""""
EXT Price at posting:
$8.18 Sentiment: LT Buy Disclosure: Held
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