still undervalued

On the 24 May 2009, I posted that DYL at 32cents was still cheap using Insider Analysis. The price has since increased 36% to 43.5cents.

IMO, DYL is still undervalued even at 43.5cents just based on info already released to the market.

One of my reasons from a fundamental perspective:

In November 2008, Forsys Metals, which owns the Valencia Uranium mine in Namibia was acquired by a private company for AUD$631million (using current exchange rates). In November 2008, the uranium price was already in free fall and was actually around the same price as it is today ie $50/lb. At the time of the acquisition, the Valencia deposit contained 51.4 million pounds U308 @ 0.012%.

In the latest quarterly released by Deep Yellow, it was reported that Deep Yellow had 69.1 million pounds U308 at similar grades (Similar style and grade to Areva's Trekkopje deposit which they proved in April 09 was economical to mine with their new alkali heap leaching method).

Just based on Deep Yellow's 69.1 million pounds U308 alone and based on the amount that was paid for the Valencia deposit, Deep Yellow should actually be worth $848 million which equates to 75cents per share. This estimate is conservative because the quarterly also stated that "DYL anticipates that once the additional JORC Code resource estimates have been finalised for the Aussinanis and
Tubas Red Sand deposits that the total resource will be close to 50000tonnes (110million pounds U308).

At 110 million pounds U308, DYL should have a market cap of 1.35 billion or $1.20/ share.

The above calculations haven't even included the potential of INCA/ INCA Deeps, Tubas Red Sands and the paleochannel between Oryx and Tumas which are supposed to be the more exciting deposits!!

That's probably why Paladin and DYL management bought so many shares at 50cents during the placement in 2008. Only they know the true potential of the company IMO.

So for those who are worried that they have missed the boat... Think again.