Next uranium producer after PDN?OMC are targeting production in...

Next uranium producer after PDN?

OMC are targeting production in Sept. 2007. The management has been focused on and effective in rapidly advancing the current poundage to production.

Its current 13.7 million pounds do not include the high grades mineralisations of Bungua.

4 drill rigs at work. Scoping Study to finish in this quarter from memory.


omc won't be your ten bagger in 07, but it has the kind of reasonable certainty that is very rare on ASX.


The following are excerpts from the posts of the knowledgeable ones of this stock:


Kaumpwe A is located toward the western end of the Bungua ridge. The GSZ completed both percussion and diamond drilling in this area covering approximately 500 x 300m. Data has been received for 63 percussion holes for 1901m of drilling to a maximum depth of 41m over this area. All but four of the holes contained mineralised intercepts, with 46 holes recording two or more mineralised zones. The mineralisation is shallow, with the deepest intersected at 35m and 65% of the known mineralisation being within 20m of surface.
Selected intercepts include:

• 3.15m @ 0.11% (1.1 kg/t) U3O8 from 7m down hole in hole 7
• 1.43m @ 0.21% (2.1 kg/t) U3O8 from 3m down hole in hole 14
• 2.56m @ 0.15% (1.5 kg/t) U3O8 from 16m down hole in hole 56
• 0.36m @ 0.92% (9.2 kg/t) U3O8 from 12m down hole in hole 61
• 2.57m @ 0.1% (1 kg/t) U3O8 from 26m down hole in hole 71
• 2.34m @ 0.11% (1.1 kg/t) U3O8 from 26m down hole in hole 76

The company recently took a number of surface samples (see ASX release dated 16 February 2006) from sandstones and conglomerates containing mineralisation as disseminations and replacements in the area. Comparison of assays with GSZ data indicates that the recent sampling broadly correlates with high assays in adjacent drill holes. In some instances the recent surface samples were higher than the adjacent drill intercepts.

Kaumpwe B is located approximately one kilometre to the east of Kaumpwe A and was the focus of small drill program, in an area of approximately 100 x 100 metres. A total of twenty holes were drilled on six sections 20 metres apart for a total of 616m. All but one of the holes contained mineralised zones, with seventeen holes recording three or more mineralised intercepts. All of the mineralisation is shallow, with 66% of the mineralised zones occurring within twenty metres of the surface. The highest recorded value was 1.61% (16 kg/t) U3O8 over 0.22m from 9m in hole 46 in hole. Other notable intercepts include 0.5m @ 0.36% (3.6 kg/t) U3O8 from surface in hole 32; 9m @ 0.05% (0.5 kg/t) U3O8 from 6m in hole 50 and 0.96m @ 0.12% (1.2 kg/t) U3O8 from 23m in hole

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Omegacorp Eyes Further Resource Upgrade And Early Mine Start On African Uranium Project

Adelaide, Sept 7, 2006 (ACN Newswire) - Significant opportunity exists to further increase the resource and move rapidly into production at a uranium project wholly-owned by ASX-listed OmegaCorp Limited
(ASX: OMC) in the African state of Zambia.

"There is considerable project upside as we have an existing JORC standard resource from only two of the five key prospects at the Kariba uranium project," OmegaCorp's Managing Director, Mr Matthew Yates, said today.

Addressing the Paydirt Media 2006 Africa Downunder Conference in Perth today, Mr Yates said the project aimed to move to a bankable feasibility study by year's end.

"We have re-adjusted our project horizons inwards now, as a result of a resource upgrade announced last week, to near-term production goals," Mr Yates said.

"Our short-term aim is to complete the current scoping study and through the extensive drilling program currently underway, further increase Kariba's resources."

Kariba has a JORC-classifed Inferred Resource, increased last week to 16.4 million tonnes, grading 380 ppm for 13.7 million pounds uranium oxide.

The scoping study has so far confirmed an 80% metallurgical recovery at Kariba via alkali leach.

Mr Yates said additional resource potential lay in further resource definition and/or infill drilling of the nearby deposits, Bungua, Mutanga East and West and Dibwe East and North deposits.

"Bungua is a priority for drill testing as it features visible mineralisation in several localities, high grade rock chip samples in excess of 3.8% uranium oxide, historical drill intercepts up to 1.6% and all of its known mineralisation is shallow with 75% of historical intercepts being less than 30 metres depth," Mr Yates said.

Source:http://www.acnnewswire.net/press/en/32968/Africa-DownUnder-Conference.html


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omc: 2*(75-15) = au$120million EBITDA
Say from that they come to au$70million NPAT

Market pays 10x earnings and u have $700million market cap

Certainly not out of the question for a uranium producer

Probably by then there will be 200million shares outstanding, an increase of 50million due to a capital raising (at $1.20?) to raise au$60million for capEx... of course this is speculation

But that could lead to a sp of $3.50 by 2008

Look at the potential, uranium price could be higher by then
Resource could end up being larger
Market may be willing to pay more than 10x earnings, PDN is sitting on about 17, and ERA more than 50x


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OMC
roughly 72 mill MC
150 mill diluted shares
14 mill in cash
expected to produce say 18-24 months time
BFS study coming too
14 million in cash
130 million on issue
13.7million pounds JORC compliant
low recovery cost
producer within 18 months
3 other projects
4 drill rigs; Even if they can prove 20million pounds and decide to mine 2million lb a year from 2008 for 10 years and say costs are at $15/lb, that will equate to a market cap of about $500million (and this is the MINIMUM) depending on how the market decides to value it

Now the real wildcard is, what will the uranium price be in 2008, my guess is us$75-80/lb+


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omc: One thing is certain the resource estimates can only go up from here with 4 drill rigs going on areas with known historical drilling and excellant surface samples and radiometric anomalies.
Its just a matter of how much.

I think worst case scenario OMC should be able to come up another 15 million pounds of uranium from Bungua. Though going on radiometric counts and historical drilling its likely the grade could be higher.

OMC's final resource estimate could be anywhere between 30 - 60 millions pounds U3O8.
Of course this is all speculation and depends on Bungua results.


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as of 28th july 2006
1. merril lynch has 14.4million shares,
2. ANZ 11.9mil,
3. Westpac 11.4mil
4. National 4.5mil
5. JP Morgan Chase and Co 9,300,000 21/08/2006 7.12
6. Indian Ocean Resources Ltd 16,725,989
7. Citibank and HSBC with lesser holdings (1-2mil)



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read one of their reporst previously that stated :

If the price of U remaied at US $20/lb OMC would still make $10/lb operating profit.


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OMC could fast track and be in production by '07/08.


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OMC should be the next junior to mine and take advantage of the current U prices before over supply in latter years(2010+).
Compare PDN's market cap to OMC's and you get some idea of OMC's potential market cap once we get closer to production in september 2007.


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The two key prospects are briefly summarised below:

Mutanga – mineralisation covers approximately 1000m x 1000m in area.

Dibwe – Approximately 600m in strike length and 300m down dip.

Kariba Project - 12.45Mt for 10.92Mlbs of uranium oxide.

7. Is the project essentially a 'greenfields' proposition, or does it have a JORC-compliant resource? If it is not 'greenfields' and if it doesn't have a JORC resource, how much work needs to be done in order to establish one?

The project has a JORC compliant resource of 1Mlb uranium oxide and is considered to be brownfields development.

8. What is the potential size of the deposit?

We believe there is considerable potential from three other areas that were extensively drilled by AGIP and a considerable amount of blue sky.

9. How much cash has the company budgeted to spend on the ground at the project during 2006?

Spending a minimum of $US1 million at Kariba plus another $US3-500,000 on the other two projects.

11. Which contractors/consultants has the company been/intend using?

Brendon Hammond – Principal Consultant – Ex Rossing uranium mine in Namibia, former MD of Argyle Diamond Mine

12. How is the project located in terms of infrastructure?

Very well – located within 30km of a bitumen road, good bush tracks to the key prospect areas. Ready power and water supply proximal to the project area.

13. How far away is a potential development? What is the potential size and timeline?

The project could be in production by September 2007. The aim is to produce 1-1.5m pounds of uranium oxide annually.

14. What are the potential capital/operating costs of the development? When will you likely know?

We should have indicative values at the end of the June 2006 quarter.

15. What are the main hurdles to reaching a development decision?

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just hit 57c.....go long on this one....11 million pound JORC compliant inferred resource that is shallow and hosted in sandstones presenting a case for simpl, relatively low cost mining operation. The high metallurgical recoveries are considered to be another positive step in the initial assessment of KUP based on 20% of the overall project. this gives the possibility of 80% more findings which based on 20% would suggest another 44 million pound of U308 giving a possible total of 55 million pound of U @ $US 50/pound = 2.7 billion dollars....mmm
and thats only one of their projects ..
Assuming they have half of the resource which represents 28 million/pound u308 at $50 equates to an inground value of US $1,350,000,000 smackers
ASSUMING a recovery cost of 40% that gives a gross profit of 800 million dollars gives a share price of $6.60/share


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Ive always said OMC will have a market cap of over 500 million in less than 2 years, and im sticking to it, Im happily sitting on a good profit and will continue to do so untill production.


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If they increase their resource by 50% over other projects as mentioned in previous announcements then we are on a damn cash cow

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Equinox Resources (EQN) is positioned to produce by-product uranium from its copper project in Zambia by 2008. Berkeley Resources (BKY) has a strategic alliance with AREVA over BKY interests in Spain and further news is expected. OmegaCorp (OMC) is rapidly advancing its Kariba Project in Zambia. Redport (RPT) and Nova Energy (NEL) each have advanced stage calcrete projects in WA. Paladin Resources is expected to commence commissioning of the Langer Heinrich calcrete project in Namibia in September, 2006.

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World uranium production in 2005 increased by only 5% to 108.4 million pounds (up from 102.8