Yeah, it looks very attractive at these levels. In the recent...

Yeah, it looks very attractive at these levels.

In the recent Director Resignation announcement: “I am confident that the company is now well positioned to achieve successful commercialisation of the U-pgrade^TM technology” Gavin Becker said. He continued, “The Board has overseen a period where third party interest in U-pgrade^TM has gained real and tangible momentum, the company is well funded, and has a clear and achievable strategy to participate in the exciting future in store for Uranium producers.”

So let's consider:
• Current Market Cap A$1.8MM with a slender 15.7MM shares outstanding;
• Opportunity to pick up shares at an all-time low...
• ...with the market giving absolutely no uplift to the share price following the encouraging news that the potentially-dilutive Hanlong convertible notes have been restructured on favourable terms. The implications of this, and avoiding unwanted creeping control of the Company at distressed prices are immense (yet ignored);
• ...with the market assigning little value to the reams of research that point to an improved demand-supply environment for uranium from 2017 onwards, leading to higher U3O8 prices.
• Unlike other beaten-up U3O8 explorers who rely solely on a price uplift to bail them out, Marenica offers a pathway to enhance shareholder value through potential licensing/royalty arrangements on third-party projects in addition to developing its own project in Namibia in a higher-pricing environment when the opportunity arises;
• One such interested party is Toro Energy (TOE.AX) which has contracted Marenica Energy to undertake optimisation analysis. Here's what they said in their latest press release of 8 March 2016: "Early results have shown that Wiluna, Australia's most advanced uranium development project, can deliver an improved mining grade at significantly lower unit mining costs, leading to an improved set of project economics that could potentially accelerate mine development." WOW! That's as close to an admission as you are likely to get. With long term U3O8 prices potentially rising to US$60+/lb within the next 12-24 months (currently US$44/lb), the application of U-pgrade^TM to Toro's Wiluna project could be the game changer for TOE. Obviously, more test work needs to be done - and is ongoing - but there is general excitement about what U-grade^TM has brought to the table so far. Key point here: Toro Energy has validated what Marenica Management has claimed about U-pgradeTM so far (yet ignored);
• While clutching straws, you would have to assume that the potential in successful licensing arrangements could be worth multiples of MEY's current market cap. Marenica is also conducting tests on behalf of Deep Yellow (DYL.AX).
• Finally, while on the subject of project economics, Marenica's own project in Namibia is currently dead in the water at current prices. However, "what if", using U-pgrade^TM, the cost of extracting U3O8 from this project could be brought as low as US$50/lb, what would this mean for a project with 50MM lbs of U3O8 in a higher pricing environment? This project alone can be considered as a deeply out-of-the money option which is currently valued at zero (mispriced?).

Obviously, there are challenges ahead, but management has shown its integrity over the past few years by keeping corporate expenditures on a tight leash while working on U-pgrade^TM and buying the company time. With positive test results coming from potential partners like TOE.AX, the potential for re-rating upside looks quite good. Yes, I have alluded to option-like upside which may not materialise. But markets can surprise on the way up, just as they led to punch-drunk disbelief on the way down.

So, to summarise: the value of potential licensing arrangements + optionality of the project in Namibia in a higher pricing environment should be greater than A$1.8MM. A lot greater.

I will take part in the SPP.

G