Refer to an older post of mine on this stock (prior to the CAMEC bid) on the 11th April this year. I've reposted it below just to remind you why you should hold and not get sucked into selling this little Gem. Since I posted this U has gone up another $7/lb so it only enhances OMC's value more. You have to ask yourself why would two successful companies in their own right want a what OMC has.. you are mad if you sell now. Anyway here it is again:
Here's some basic maths that proves OMC's value:
- 13,700,000 lb U in ground (ok its an inferred resource but as announced this morning, there's upside for further discovery in the area - So assume 13.7m lbs x 90% plant recovery will be what final conversion to mineable reserve will be). = 12.33m lb U that is recoverable.
- Price per pound has increased $US58 /lb since scoping study and announcement of Denison offer ($US55/lb to $US113/lb).
- Therefore, increased revenue (for no extra cost to the operation both capital or operating) = $US715,000,000 !!
- Taking the original takeover price, Denison valued OMC at $US170,000,000 (154.15m shares at $1.10/share).
- The $US715m increased revenue (and in this case profit) as a result of the increased U price since the original take over offer IS OVER AND ABOVE what the take over price was previously based on.
- Therefore, $US715m / 154.15m = $US4.63 per share!!
- Using an exchange rate of $US0.82 per $AUS1.00 means we are looking at $AUS5.64 per share increase in value OVER AND ABOVE $1.10 = $6.74 per share!!
I think the bottom line is - HOLD ONTO YOU SHARES!!
Ok so we need to factor in some risk into that valuation but it just goes show how undervalued this company is.
OMC
omegacorp limited
