Profit Prospect Letter Likes Rodinia Minerals
Rodinia Minerals (RM-TSXv) - Last at $1.40
Probably the lowest risk Uranium play I have seen in awhile. 20 M shares out, 5.5 M pounds in the ground, $4.5 M cash and another roughly $4 million in relatively liquid stocks. I just got long a bunch of stock at $1.40.
They have a very rare 43-101 compliant resource of 5.5 million lbs in the ground at the Workman Lake project in Arizona. Many juniors claim they have pounds in the ground but usually that’s a historical resource, not compliant with Canadian national instrument 43-101. With only 20M shares out the valuation per pound in the ground is running about $6 per pound in market cap. According to Canadian brokerage firms Blackmont Capital and Canaccord Capital the average junior is trading at $13 per lb plus in the ground. To me there appears to be a big valuation gap on the story.
There is a reason for that though - this story has been very slow in developing, specifically waiting for drill permits. No news - no interest - no promotion - no buying in the stock. The stock chart is telling me that is about to change.
From the website:
"Metallurgical studies conducted by Westinghouse indicated that leaching recovery was in the neighborhood of 94% and in their feasibility report Dravos noted that by implementing conventional mining methods including underground and open pit, and by building a $12 million mill site, the internal rate of return (IRR) was calculated at 86% with U308 at US$22/pound. With In Situ leaching (ISL), the cut-off grade would drop and the IRR would increase as long as recovery rates remained constant. Early indications are that the deposit will be amenable to In Situ Leaching."
Those numbers are VERY good for a small project - and Uranium prices are much much higher which would significantly offset any increase in CAPEX from those historical numbers. Rodinia also holds huge land packages around the deposit to give it some good blue sky.
Did I mention there is also an additional 32M lbs in the ground drill indicated on this project? This could be a huge with a very deposit with a good tight share structure.
Rodinia also has a 40% carried interest in the Mormon Lake project in which Patriot Resources (about to be public, will be OTC listing in the US) has to spend $3.5M over the next 4 years . These are some historic numbers that have come from this project
1.04% U3O8 over 30 feet;
1.35% U3O8 over 28.5 feet
2.02% U3O8 over 30 feet and
3.24% U3O8 over 11.5 feet
Those are very good numbers.
Bottom line, in this Uranium market with real pounds in the ground and some good promotion, I would think this stock has some pretty good upside. They hope to be drilling on both of their projects the next short while which will make this company much more active. I know and respect the guys behind the deal, and their ability to tell the story in the US and Europe.
This stock is an absolute sleeper.
Do your own due diligence of course.
Call Investor Relations - Don Mosher @ B&D Capital 604-685-6465
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