new macquarie analysis today... they added (costed) in the water capital, they think heap leach has NIL chance of going ahead, but 100% chance of Ranger Deeps, their valuation now is $5.26
interestingly if you use the NIL heap leach, 100% deeps you get from morningstar
Ranger Mill and Reserves = 4.40 Ranger Deeps = 3.20 Cash = 1 (but probably nil now with water upgrade) Exploration potenial = 1 Jabiluka would be 17.60 and heap leach 4.00 (but let us count them for nil)
...so morningstar says 4.40+3.20+1=8.60
...it appears to me Macquarie give NIL value for infastructure and Macquaarie have also included 400 million for site rehab around 2021
Macquarie was first I have read heap leach will be a 100% no go;
morningstar say re heap leach
"Ranger also has 110kt of resources at a grade of 0.08%. Most remain in situ, including 24kt in measured category. Work continues on a $36m feasibility study for a heap leach to produce 15-20kt of U3O8 over a five to six year period. That implies an average annual production rate of 3-4kt, not too shabby compared to current 5kt output from the existing mill! Favourable column tests yielded extraction rates over 70% at low acid consumption. Heap leaching is a low capital cost method that comes at the expense of lower recoveries. Regardless it represents a substantial potential production increment that could begin making use of 0.08% grades from 2013. At the high end we value heap leach potential at $4.00ps, though give this just under 50% chance or $1.95ps in our base case, with environmental and other hurdles yet to be overcome."
Finally with RIO having 68% of the shares, there must be some other big, big sellers out there.
ERA Price at posting:
$3.30 Sentiment: Hold Disclosure: Held
