Lovesmoney, I believe BAN becomes extremely attractive @ $80/lb. However, they are still very profitable at today's prices. I would not focus too much on the "low grades". The fact is, Etango's Opex is $42/lb. Can they get it lower? I don't know but even at $42/lb you can crunch the numbers and see just how profitable they are. Please see my previous post which I have pasted below. No "pie-in-the-sky". Just the facts. -----------------------------------------------------------------------------------------------------------------------------------------------------
The Usector is heating up and BAN is still flying under the radar. I'mseeing a lot of other junior names being thrown around by the analystsbut BAN rarely gets a mention. BAN will fly when the market wakes upand realizes they are sitting on one of the largest undeveloped Uraniumdeposits in the world - 212M lbs in extremely mining-friendly Namibia;easy open pit mining; flat Opex over life of mine (+20 yrs) and set forproduction in 2013 corresponding with where most analysts are forecastingpeak demand (much higher U prices)
A look at the numbers revealsjust how valuable BAN is even at today's prices. They have modelledaround a $70/lb LT price , which I believe is now conservative given thecurrent supply/demand climate:
$80/lb LT price = $122M/yr net profit $90/lb LT price = $154M/yr net profit
Throwa 10X multiple (P/E ratio of 10) on any of these numbers and you get aMarket Cap of between $900M - $1.5 Billion. At today's .84 level, wehave a current MC of $194M so the upside here is amazing!
I keephearing Strathmore Minerals name thrown around by the analysts. Therewas a piece in the Financial Post yesterday saying how undervalued theyare - "The company has more than $20-million in cash. STM's enterprisevalue (EV) to resource ratio is about $1.30/lb versus the industryaverage ratio of $2.50/lb."
Well Bannerman is currently tradingwith an EV/lb of $.91/lb!! If BAN was currently at the industry averageof $2.50/lb * 212Mlbs = $530M MC / 230M shares outstanding =$2.30/share!! WE SHOULD BE TRADING AT $2.30/SHARE!
The market will soon recognize this value and we will be off to the races. Congrats to all enetering at these levels! Read more: http://www.financialpost.com/news/Imhof+wins+with+gain/4106832/story.html#ixzz1BJFlnI2h
BMN Price at posting:
81.0¢ Sentiment: Hold Disclosure: Held
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