RE:RE:Comparing FCU vs NXE share priceThanks for the great feedback on the 32M lbs......only going higher as Ross continues to find more and more Uranium. As Brent Coook mentioned good deposits only get better. Think Nxe grade went down from 2.63% to 2.5%, sad its not getting better :-(
Which Ross mentioned in the latest CEO Blog as "
Early in Fission’s time at PLS, I remarked to the company’s Board of Directors that PLS was a geologist’s dream - a property so prospective that a team could spend their entire careers exploring and making discoveries. Four years of work at PLS has done nothing to lessen this belief and everything to reinforce it. "
Adding this note for The Northernminer.
Open-pit vs. underground mining
POSTED BY: NORTHERN MINER STAFF MAY 10, 2004
The following is an excerpt from the ninth edition of Mining Explained, published by The Northern Miner. The book sells for $30 plus $3 for shipping and is available by calling 1-800-668-2374. E-mail: northernminer2@northernminer.com.
An open-pit mine is the least expensive kind, and is every developer’s first choice when an orebody is close to surface and big enough, and has little overburden.
Open-pit mines look simple, but every pit needs to be tailor-made. First and foremost, the pit walls have to stay up, so a rock-mechanics engineer has to determine a safe slope for the pit. There is also a delicate balance between how much waste rock can be mined in order to gain access to the valuable ore and how deep a pit can be.
The size and location of the first bench of any open-pit mine is critical. It is excavated well into the waste rock surrounding an orebody. And since each successive bench is smaller than the last one taken, the depth to which the pit can be mined is determined by the size and location of the first cut or bench.
The amount of waste rock mined relative to the amount of ore mined is called the stripping ratio. In most cases, this ratio is high for the first bench and decreases steadily with each successive bench. A stripping ratio of 3-to-1 means that during the life of the pit, there will be three times as much waste rock mined as ore. To be profitable, an open-pit mine must be designed so that the cost of mining the waste rock does not exceed the value of the ore.
The main cost advantage of open-pit mining is that the miners can use larger and more powerful shovels and trucks. The equipment is not restricted by the size of the opening it must work in. This allows faster production, and the lower cost also permits lower grades of ore to be mined.
If an orebody is large, and extends from surface to great depth, it is common to start mining near the surface from an open pit. This provides some early revenue while preparations are made for underground mining of the deeper parts of the orebody. In those circumstances, it is not uncommon for ore below the floor of an open pit to be developed from underground by driving a ramp from the lower part of the pit.
Underground methods
Generally, orebodies are either vein-type, massive or tabular in shape. This, together with ore thickness and regularity, will influence the mining method selected.
Vein-type orebodies usually dip steeply, allowing ore to fall to a lower mining level where it can be loaded. The orebodies are usually narrow and often irregular, so care must be taken to avoid mining barren wall rock. They are most successfully mined by small-scale underground stoping.
Massive orebodies are large and usually have an irregular shape. Underground bulk-mining methods, with large stopes, are best suited to this type of orebody.
Tabular orebodies are flat or gently dipping, and the ore, having nowhere to fall, must be handled where it is blasted. The thicknesses of the orebodies vary. Room-and-pillar mining is normally used to extract the ore. Depending on the thickness and lateral extent of the ore, these types of deposits tend to be moderate-to-high-tonnage producers.
The strength of the ore and the rocks surrounding an orebody also influence the method (and therefore the costs) used to mine the orebody. Openings may be supported or self-supported. Some supported openings are held up by backfill, waste rock or aggregate placed in the openings shortly after they are mined out. Others are held up by timber sets (supports made of timber or steel), though this kind of mining is costly and not generally used today.
Self-supported openings stand up with little artificial support. The walls and pillars are sufficiently strong to carry the weight of rock above them and the horizontal stresses in the rock caused by tectonic forces, though the miner may help them along with rock bolts and screening. In massive orebodies, it is common to plan for the mining of pillars. This is done by backfilling the mined-out stopes to provide the necessary support when the pillars are mined.
Read more at:
https://www.northernminer.com/news/open-pit-vs-underground-mining/1000159502/ Rover90 wrote: Quakes, excellent post. Plugged in the current number per David Talbot and Rob Chang and WOW what a difference....FCU under valued!
| | Issued Shares | Current SP | Market Cap | Mlbs U3O8 | $/lb U3O8 | | | | | | | | | | | | |
| Fission FCU | 484,597,994 | $0.82 | $397,370,355 | 202.0 | $1.97 | | | | | | | | | | | | |
| NexGen NXE | 306,448,620 | $3.13 | $959,184,181 | 173.5 | $5.53 | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| Notes: | | | | | | | | | | | | | | | | | |
| 1. FCU Resource Estimate per David Talbot note Mar 23, 2017 202M lbs | | | | | | | | | | | |
| 2. Nxe RE Estimate adjusted down 100M lbs as unmineable per Cantor / Rob Chang note | | | | | | | |
| 3. Nxe benchmarked to Cameco Cigar Lake and McArthur River Grade (operating underground mines) greater than 10% cut-off....Arrow A2 High Grade meets test only |
| 4. Number shares issued per FCU and Nxe websites | | | | | |
| 5. Share price close Mar 24, 2017 | | | | | |
| | | | | | | | | | | | | | | | | | |
Doesnt include the premium for Fissions near surface open pit mine resource.
quakes99 wrote: The question came up on comparing FCU vs NXE share price.
In order to compare the market valuations being assigned to 2 companies with different assets and number of outstanding shares, make yourself an Excel spreadsheet. This is what you would discover if you use the published NI 43-101 Resource sizes and issued shares.
| | Issued Shares | Current SP | Market Cap | Mlbs U3O8 | $/lb U3O8 |
| Fission FCU | 484,072,994 | $0.56 | $271,080,877 | 108.3 | $2.50 |
| NexGen NXE | 303,902,506 | $2.03 | $616,922,087 | 201.9 | $3.06 |
This is just using a simple comparison method that does not account for Fission having over $60Million cash on hand with no debt, or NexGen having a similar cash balance but a US$60M debt, or the fact that Fission has 75% Indicated, 25% Inferred U3O8 while NexGen is 100% the lower confidence Inferred resource category.
The upshot is that the promoters and hedge fund managers have been talking up NexGen to the point where it is being valued by the market at $3/lb of U3O8 in the ground... while Fission is valued at just $2.50 per lb at PLS. Part of the reason may also be that expectations are already there that Arrow is already over 300M lbs, so speculators are buying on that expectation for an updated Resource Estimate next summer/fall. That would reduce that $3/lb valuation down to only $2/lb, much less than PLS when you take that into consideration.
Traders are working the NXE stock right now, as evidenced by the NXE bullboard having been taken over by traders, while long term investors are the ones looking at Fission, eyeing long term upside rather than short term trading volatility, imho.
Anyway, it all comes down to potential upside when you are a long term investor not wanting to play the swing trade volatility. With NXE already trading at $2 with a $3.99 Bloomberg consensus target price, that puts the upside at less than 100% from here. For Fission, Bloomberg shows a $1.87 consensus price target, providing 234% upside from here.
As discussed earlier, buyers and sellers of Fission are not agressive right now while they wait for catalysts on the sidelines. NexGen is still a trader's game, providing profitability in the daily swing trade and speculative promotion.
Each to their own!
Good luck with your investments, however you play them. ;-)