quakes99 wrote: No news today by Fission... but 7 pages of posts, 95% of which are posted by NexGen Cheerleaders/Fission Bashers... more than the number of posts on the NexGen Bullboard today... and it was their news day! Go figure, eh?
I was fast asleep on the West Coast when the NexGen Convertible Debt Deal was announced... and even before I was awake I see there was a "pre-emptive strike" already in progress... defaming, ridiculing, smearing, bashing me before I was even up and reading the news. Huh? Did they already sense that the deal had some negative aspects that they did not want to be made public? You could almost sense that they didn't really like the deal that much... but would defend it to the last bashing post. :-0
What is it that the NexGen Cheerleaders/Fission Bashers are so afraid of? Why do they have to go to such lengths to defame and ridicule me, discredit my posts, slander me with lies about being a paid pumper, and generally launch into a chorus of smear... smear... smear? None of their arguments hold any weight.. as we've seen analyst reports that say many of the same things I've been saying. Everything I post is backed by solid evidence provided by respected and credible sources out in the public domain.
If I was as unbelievable and ridiculous as they claim... then why do they have to work so hard, and resort to endless personal attacks to try to humiliate and bully me and any other Stockhouse poster that dares to say anything that is positive about Fission, or negative about NexGen?
As Shakespeare wrote in Hamlet... "
The lady doth protest too much, methinks" ...
a figure of speech to describe someone's too frequent and vehement attempts to convince others of some matter of which the opposite is true, thereby making themselves appear defensive, and insincere. So, if the bashers feel the need to completely drown out any reasoned analysis, and must attack anyone who they see as a threat... isn't that a clear indication that they do feel under threat and must be so defensive because they are feeling so insecure?
It certainly was an interesting NXE Cheerleader script playing out on the Fission board. I did post what I thought was a pretty good analysis of the NXE deal... and shortly thereafter BMO and Dundee both put out new analyst updates that said more or less the same things. I posted the BMO comments, as well as Dundee's 32% upside projection, and that seemed to infuriate the bashers even more. How dare I post Analyst commentary!
As I am sure one purpose of the endless bashing is to bury mine and other comments from reasonable and logical posters, and those of the analysts and commentators that these same individuals also dismiss and discredit as "paid pumpers for Fission". Does everyone that states a reasoned and well researched and supported opinion have to be paid by Fission? Pretty incredible aspersions being cast about!
Anyway, all this bashing seems to suggest that my analysis and opinions must be worth reading... so I have reposted below a couple of my thoughts on today's NXE news... FWIW.
Cheers and good luck... and let's hope that the 3% rise in U Spot Prices today is a good indication of more positive sentiment on the horizon. The CEF Holdings strategic loan is certainly shining a spotlight once again on Uranium. NXE was up 5%! EFR on no news was up 6.7%. Even Fission 3.0 had a better day than NexGen... up 5.9%. ALX up 5.9% too. Excellent!
Must be time once again to post the upside potential analysis done by Haywood and Dundee...
But buckle your seat belt... arrrr... there be bashing pirates in these waters!
quakes99 wrote: Good morning all. Nice to wake up to some good news today for both NexGen and the future of a new West Basin Uranium District, not to mention the Uranium sector on the whole. Bodes well for the future prospects of both NexGen and Fission, and many other Uranium exploration plays.
I'm waiting to see what the Analysts have to say about the deal but, from first read through and some initial investigation, here are some points to consider:
1. The CEF Holdings Ltd. Strategic Loan is for US$60M (CA$78.6M at today's exchange rate) with 7.5% interest that is US$3M/year in cash for 5%, and US$1.5M worth of NXE shares per year.
2. The US$60M loan can be repayed by cash or by issuing 26M NXE shares at US$2.33/share. At the current NXE issued share count of 334.5M shares, that represents dilution of about 8%. If the loan goes full term (5 years) then an additional 3.2M shares of interest would be issued, bringing the grand total to around 30M shares, which represents 9% dilution. So, if CEF eventually takes repayment entirely in shares... they will end up a 9% shareholder plus receive a cash payment of US$15M in interest.
3. The risk in the investment is mostly taken on by NexGen and its current shareholders. NexGen will acquire a CA$78M debt that, depending on changes in US Exchange rates, could grow or shrink as it matures. Either way, current NXE shareholders will be either diluted by 30M shares +20% of the 30M shares issued as Options under the proposed 20% Option plan = 36M shares = 10.8% dilution... or will end up on the hook for paying back the US$60M + interest. CEF put up the money and are basically guaranteed to make money no matter how successful the drilling is from here. For them it is simply a loan that pays them interest, with the addition of significant discovery upside potential no matter what happens with the Canadian dollar.
4. If the drilling expenditure of the US$60M increases the value of Arrow by converting the current 100% Inferred to Indicated then NXE shareholders should do well, especially if U prices rise. If the infill drilling is not as successful as many are expecting, then the 10%+ dilution or $60M debt could weigh heavily on existing shareholders. Curyer, on behalf of NXE shareholders, is the one taking the gamble, while CEF is not, imho.
5. CEF Holdings has no direct interest in taking Arrow into production. They only want to make money through their loan and discovery upside potential... and could simply walk away when they have made their bundle. However, they have deep pockets that could provide funding for construction of a new Mill on the West Side (which would be fantastic for Fission as well) and help move Arrow towards being a producing mine, if CEF sees a money-printing opportunity a few years from now.
6. This deal puts NexGen in the same position as Fission... essentially no additional dilution for the next few years. Both companies now have sufficient cash to prove up as many pounds of U3O8 as possible which increases the overall potential for the new West Side Uranium District at Patterson Lake. That's a strong positive for both companies.
7. If, indeed, CEF ends up providing the financing for a mill and infrastructure on the West Side, then that could have a significantly positive impact on the NPV of PLS. If the CAPEX for a new Mill is removed and replaced with Toll Milling Fees instead, then we could see a major increase in the NPV, and much lower risk for the PLS project. In essence, NXE and CEF could be a major risk reducer for Fission's development of PLS into a mine... which would also provide a boost in FCU's Takeover value to a major.
8. How this Strategic Loan will affect the Takeout potential of NXE is unknown. I'm hoping some analysts will provide some commentary on that. An acquirer would be looking at assuming debt... but that debt level will be pretty small in the grand scheme of a $1B+ takeout. There is nothing in this deal that reduces the project risk for Arrow, though, imho. Without an Offtake Agreement, the risk level remains the same to a major producer considering an acquisition.
Those are some initial thoughts.
This could be a good signal to other U investors that a West Side Story is gaining momentum, and that Uranium is a good investment bet at where the U market sits at a base-building bottom. In any event, new cost-sharing possibilities between CGN/FCU/NXE/CEF add more fuel to the West Side fire... and, in my opinion, given current share prices for both companies, FCU has been handed even further upside potential. Both plays should do very well in the long term.
Overall, seems to be great news with many positive benefits for investors in FCU and NXE, imho.
Good luck to all!
quakes99 wrote: With all the attention that NexGen is getting now with this new Strategic Loan from Asian backers, more than ever it could be Fission that really does get to "ride the NexGen gravy train."
We already know with some certainty that only 1 Processing Mill will be built in the PLS region to serve all of the regional U3O8 processing requirements. That means you can kiss the old NI 43-101 PEA initial CAPEX cost estimates goodbye and begin to think in terms of a shared-cost or Toll Milling arrangement being made.
Not only would a cost-shared mill significantly reduce Fission's CAPEX requirements, it could also reduce the costs over the next few years as the development process heads into high gear to get a new Mill built. Site choosing (and all the related geotechnical/groundwater studies, etc.), Environmental Impact Studies, government and community engagement, permitting, planning, engineering, infrastructure additions to support mill construction... all of those costs could be shared by the players in the region, which so far include Fission, NexGen, UEX/Areva, Purepoint/Cameco.
That situation provides a double bonus to Fission - it reduces our Pre-Feasibility Study costs so that more of that CGN investment goes directly to exploring and expanding the U3O8 discovery zones at PLS - and it reduces the development RISK by sharing the costs for planning and constructing the mill amongst multiple partners. As a long term investor, that is precisely the scenario that can make your investment in any of the SW Basin discoveries a winner! (For traders its a different story.)
If you look at Fission's PEA and the CAPEX breakdown, you will see that of the $1.1B of estimated pre-production Capital Costs, only about $400M relates directly to the construction of an Open-Pit mine at PLS. The other $700M is primarily CAPEX for building a Mill and all the Infrastructure (plus contingency) that supports both the Mill and Mine. If that $700M was cost-shared on a 50-50 basis then that drops Fission's initial CAPEX down to $400M + $350M = $750M which is a 32% reduction in Capital needed by the PLS mine developer!
Perhaps even better, giving Fission the opportunity to ride the NexGen gravy train, if NexGen takes centrestage and its backers decide to build a Mill for NexGen that could process PLS ore on a Toll Milling basis, then Fission's CAPEX could drop by over 50%! That could lead to some amazing returns for the developer/producer taking PLS into production.
The Winter Drill Program results sweeten that situation even further... confirming that the new zone at R840W was not a one-off but is indeed another expanding land-based high-grade zone that increases the amount of open pit PLS U3O8 ore that can be first to production at the lowest initial capital cost!
In my opinion, the story just keeps getting a whole lot better and appears to have even more growth potential both in heading further west toward the high-grade boulder field and connecting R840W with R600W and perhaps all the way back to R00E on the shore of Patterson Lake.
Whether you want to believe it or not, the great results out of both Fission and NexGen are providing the catalyst to greatly increase the profitability of taking them both into production. Right now, in my opinion, it is Fission investors that could have the most to gain when the market finally realizes how undervalued we are, and how much our Asset Value will jump when U prices do begin to rise. Overall, every play in the SW Basin has gained far more upside potential.
Just my opinion...
Do your own due diligence and invest according to your own unique goals and investment strategy.
Good luck with your investments in the new Patterson Lake Uranium District!