Bhang Inc BHNGF

GEM has fundamental potential

[loparn]

after having looked a little bit at Pele Mountain Resources today due to a post on the UMN board. But at this point there are huge uncertainties of how much uranium they can produce per year, which year full scale mining would commence and what the costs could be including initial capital costs etcetera. Now look at this simple example: Assumptions of USD 80 long term uranium price, production 2 million pound per year from 2010, stock dilution up to 120 million shares for all capital costs for the uranium project, total company production costs of USD 50 per pound uranium produced (a bit lower than the USD 65 figure circulating but maybe more realistic). Taxes 35 %. Discounting the future stock potential by 25 % a year due to high risk in these juniors. 2010 p/e 10. USD = 1.16 CAD. Then you would get Pele Mountain Resources 2010 earnings per share of CAD 2(80-50)x 0.65 x 1.16/120 = CAD 0.377 P/e 10 gives 2010 potential CAD 3.77 Discounted to 2007 that would correspond to a price target of around CAD 1.93, thus giving GEM a very fine fundamentally based potential in line with my own favorite uranium juniors, IF GEM is such a junior as assumed in this calculation example. It could be better or worse... If you want less risky uranium juniors with also around doubling potential more or less this year, but with more advanced projects you could carefully study my analyses of Uramin(UMN), Energy Fuels(EFR), Powertech Uranium (PWE), Khan Resources (KRI) among others on https://www.loparn.com (not the most beatiful site though according to some - but it is a classic in Sweden!) I use exactly the same uranium price assumption, p/e 10 and risk-weighted discounting factor 25 % in those analyses.(With an extra 15 % discount of KRI price target due to Mongolia) ---------------------------------------- By the way - this board average post does not change my belief of the stupid Mr Market