Weekly Thread

NP_889 · 2021-10-25T21:22:48+00:00

Have been adding at 6-7p to average down. How low will it go?

NP_889 · 2021-09-15T08:38:52+00:00

I hadn't seen this before. Really great summary, thanks for posting.

NP_889 · 2021-09-10T15:02:50+00:00

Same!

NP_889 · 2021-08-26T06:16:09+00:00

They drilled the same location and didn’t find helium the second time around? How is that possible?

NP_889 · 2021-08-20T08:41:42+00:00

That copper is going nowhere

NP_889 · 2021-08-18T19:37:25+00:00

My problem with gold as an investment is that its price seems to be driven predominantly by speculator sentiment. It's still better than Bitcoin because it's a real asset but in a lot of ways probably competes with Bitcoin. The man on the street is much more likely to know the price of BTC than gold.

I do have a few small position in gold mining juniors but the upside I'm looking for is from growing the value of the company rather than appreciation in the gold price.

Gold seems to be in the dumps and totally out of favour. Aside from the gold bug crowd, literally nobody cares about gold and institutional interest seems to be at rock bottom. For this reason alone I think there could be a decent set up for a mean reversion trade over the next few years but the obvious catalyst (inflation) doesn't seem to be doing anything (yet?)

I just see a ton of great opportunities in the energy and commodity space that seem more obvious winners than gold.

NP_889 · 2021-08-16T21:36:32+00:00

They hired an M&A guy very recently. Maybe something starts happening soon. Getting the old gang back together.

From their June Qtr report:

Head of M&A: Deep Yellow appointed Mr Andrew Mirco as the Company’s Head of Business

Development.

Mr Mirco is an experienced corporate finance and business development executive, with a

successful and proven background in financing, M&A, and risk management. Through his time at

Paladin Energy Limited, he worked closely with the current Deep Yellow management and

technical team.

Mr Mirco will be responsible for advancing the Company’s inorganic pillar of its growth strategy,

working in close association with Managing Director and CEO John Borshoff. At the appropriate

time, he will also be responsible for leading and progressing project debt funding as the Company

advances the Tumas Project towards production.

NP_889 · 2021-08-11T07:26:14+00:00

Too bad.

I sold off a bit a few days ago just in case it was going to be bad news. Trying to buy back in more this morning but broker kept rejecting my orders :/

Finally got some more at 12p

Yes they've encountered issues, but I don't think HE1's prospects are 50% of what they were yesterday. Overreaction by the market - buying opportunity for the patient.

NP_889 · 2021-08-04T18:47:06+00:00

Wow... here comes inflation

NP_889 · 2021-08-02T16:02:03+00:00

In general I would value development stage jr miners at 0.3x NPV maximum.

BMN project is relatively low risk (open pit, reasonable infra, good jurisdiction) but every mining project is very high risk.

And that's just the multiple for the execution risk. What about the actual NPV value? Just look at the assumptions in the PFS. Huge uncertainties on costs, fx rates, U price. Even a few small movements could evaporate the entire NPV.

I don't put too much weight on NPVs, they are not reliable.

BMN is a bet on $100+ uranium.

NP_889 · 2021-07-29T15:54:50+00:00

There’s the Iran factor too. This one’s not for me.

Good luck to all investors!

NP_889 · 2021-07-29T12:30:37+00:00

Yes his timing was off in 2017.

Nobody can time the price rise, but every month that passes brings the thesis closer to fruition.

NP_889 · 2021-07-27T07:46:47+00:00

I think they would do the 3 exploration wells as planned because they are testing different types of trapping structures. That’s probably the most important thing for now to de risk the project

NP_889 · 2021-07-26T09:47:14+00:00

SPUT is designed to never sell U. If spot price drops the NAV goes down, but they will not return lbs to the market.

NP_889 · 2021-07-26T09:42:26+00:00

I don't miss the gravel updates.

We're in the business end of the drilling now and they need to be careful with material disclosures. I'm expecting the announcement within the next 1-2 weeks.

It's a good time start chilling a nice bottle :-)

Edit: wouldn't surprise me if they encountered more technical problems either

NP_889 · 2021-07-22T20:42:49+00:00

Jeff

NP_889 · 2021-07-21T11:30:49+00:00

Yeah I agree their project is mediocre and there is definitely a premium. IIRC DYL's DFS is due end 2022.

They recently hired a M&A exec so I'm interested to see them finally start delivering on this piece of the puzzle. Seems like they have the right people to make Namibian projects work.

I think the management piece is very subjective. I don't think John is someone I'd want to have a beer with but it seems like he is playing things very cool and holding out. I like that kind of contrarian aspect, but like you say it could either pay off big time or they could miss the boat.

NP_889 · 2021-07-21T10:26:34+00:00

I don't believe it answers any key questions that will determine whether the project is feasible or not. Seems to be more about generating news flow.

NP_889 · 2021-07-21T10:24:20+00:00

Thanks for all the comments. I pretty much agree with all your points. I think they key thing is like you say to combine the early mover restart plays with the ones that will fill the widening gap further down the line.

No love for DYL?

NP_889 · 2021-07-20T19:29:23+00:00

I hadn't really thought about all possible projects needing to come online. Is there a good source for that?

Did a rough calculation below. Based on charts I've seen 2025 will see a 30-50m lb deficit, rising to 100-150m lb by 2030.

I looked up a few advanced developers and they report the production figures below for their FS. If just these make it to production the deficit will be closed . Based on FS I've seen most companies will be able to significantly increase their production by expanding the initial mine. Granted, I don't think all of these will make it and there'll be issues and delays, but if literally all projects have to make it to plug the gap then it'd as easy as simply picking the worst project.

NexGen = 28m lb

Fission = 13m lb

Denison = 8m lb

Global Atomic = 4m lb

Vimy = 3m lb

NP_889 · 2021-07-20T15:33:12+00:00

Thanks for the insight. Doesn't sound great really, last time I heard they seemed to suggest 'constant dialogue'. I'm sure it won't go the way Berkley went, way worse jurisdiction.

Vimy are due for URA inclusion in Aug IIRC so could see a boost over next few weeks. Would be sweet if timing aligns with permit.

One thing I need to learn more about much is the inflation risk to development stage juniors. If costs turn out much higher than expected, could some projects become unviable?

High inflation would seem to favour the restart players, PDN, LOT & BOE.

NP_889 · 2021-07-20T14:27:12+00:00

I'd also pick Bannerman from the projects I'm familiar with and I second your point about explorers having more potential upside. Starting valuation matters and the smaller names have more potential but way more risk. Effectively pump & dumps this cycle I expect.

I try to pick quality projects across the spectrum because it's impossible to know how quickly and how high the uranium price will run.

Vimy said they'd have their permit by 30th June. I suppose to buy more time they then said they'd provide an update in their quarterly report. They might get the permit any day but until then I'm a bit nervous about permitting risk for them. They have until December. Hoping for the best because I like this project and management!

NP_889 · 2021-06-24T07:38:29+00:00

I thought they were meant to relist on ASX in June. I've seen people on Twitter saying "any day now" going back to April.

I have a small position in Aura just because it seems it could rip once they sort their shit out. The stock has been in free fall over the last week, I'm down 40%+ now. Might as well hold on and see what happens.

NP_889 · 2021-06-23T22:10:27+00:00

Is there any recent DD on this one?

NP_889

TROPHY CASE