on the broker radar

On the broker radar: Black Range Minerals

Friday, June 22, 2012 by Angela Kean : Proactive Investor

A number of resources companies, including Black Range Minerals and Gunson Resources, have had their investment cases validated with coverage by brokers, highlighting a potential investor opportunity.

Black Range Minerals (ASX: BLR), Gunson Resources (ASX: GUN), Dart Mining (ASX: DTM) and Greenland Minerals and Energy (ASX: GGG) have attracted some broker attention in the past month with share price targets well above their current respective share prices.

Foster Stockbroking has rated Black Range Minerals as a buy with a target of $0.07 per share, more than three times the last traded price.

Black Range possesses one of the highest grade and largest uranium ore bodies in the U.S, the Hansen/Taylor Ranch Project, which hosts a JORC Resource of 90.9 million pounds U3O8 at a high grade of 600 parts per million.

The project is likely to become a necessary deposit and source of uranium for the U.S. domestic market – given 20% of U.S. electricity comes from nuclear power plants.

U.S. reactors consume around 50 million pounds U3O8 per annum – 85% of which is imported. The U.S. generates more electricity from nuclear power plants than any other country in the world.

The economic case for the project is highly compelling with a recent Scoping Study, based on a production profile of 2 million pounds per annum, showing potential for a lower capital expenditure with the option to process the ore at an existing mill offsite.

Without the need to build a mill, the Scoping Study indicates capital expenditure for Hansen would be under US$80 million.

With mine operating costs from the Scoping Study estimated at US$30 per pound U3O8 at a production rate of 2 million pounds per annum, it propels Black Range into an advanced and potential near term uranium producer.