My logic might be incorrect but otherwise i can't see the max revenue being much more than what I have considered on the basis that I have:
1. Not considered the time value of money - I am sure a plant would not treat more than about 250,000 tpa, ie 4 years treatment;
2. Assumed a recovery of 90% - report says MAX of 90% so maybe the average recovery is something less than 90%;
3. Assumed AVERAGE grade of 2.33 - the wording in the report is ambiguously put regarding the amount of tailings that might be available but i have assumed 1.1 million cu metres (whether that was to confuse the reader, or because the writer is not technical and did not know actually the correct interpretation or was poorly expressed);
4. Not considered other financial factors such as royalties and taxes, and borrowing costs.
Whether the lower grade tailings is economic would also have to consider the incremental cost of treatment, and that would have to consider recovery factor too which may be different.
The big upside of course is the U3O8 price which is not likely to decrease much but more likely to increase.
NMR Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
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