RE: You will not get EFR below 4.40"anymore I guess, if a mill agreement is signed and at that point not below the former ATH. I bought some more yesterday but would have tried to get some today instead in the first minute after 3.30 PM.
The new RI article will push the price which is motivated now, even if it was a "near pumper" with its CAD 40 potential stated "
So far I am right, and did buy more yesterday at slightly above 4.40. (I have, as often in these cases, traded successfully with half of my shares after the RI new EFR article, reducing and buying back cheaper).
Long term uranium winner :
Energy Fuels
Disclaimer : I take no responsibility whatsoever for any errors, bad conclusions, important facts missing etc that might affect my analyses and their readers in any respect, but I always try to keep the facts accurate, as well as the calculations with their usually simple mathematics. Sometimes even the companies analysed deliver false information which could be impossible to detect for me and many other interested parties. In general I trust the corporate information and use it for my analyses. The future can´t be predicted 100 % and the stock market in particular is associated with considerable risks on the company level, but also on branch-, country- and world market level, implying that each person has to take their own full responsibility of the consequences of buying this particular stock.
Do your own due diligence !
2007 price target CAD 7.75
Energy Fuels (EFR) is a near term producer with uranium properties in the USA (and some other type of projects elsewhere not considered here). They have a qualified & experienced management, most likely an adequate uranium resources in existing mines and projects and a good cash position and that seen together with a fine risk/reward ratio indicate a very fine long term stock potential for the coming 1-2 years, which the following simple calculation tries to show a little more explicitely.
Their Whirlwind Mine and Energy Queen could begin stockpiling late in 2007. They are situated 75 miles and 62 distance from the White Mesa Mill owned by Denison Mines (capacity 2000 tons per day) and 215 and 350 miles from Cañon City Mill owned by Cotter (capacity 1200 tons per day). Tenderfoot Mesa is 175 miles from White Mesa Mill and 350 miles from Cañon City Mill and could begin stockpiling in 2008. Energy Fuels has numerous other uranium properties in Uravan Mineral Belt and Arizona strip. Drilling will take place in 2007 on many of these properties. EFR has not reached a final toll milling agreement yet, and full mining activity will not start before that, probably late 2008. EFR though is considering constructing their own mill for processing a bit later..
Later EFR should be more capitalized from the warrants with probably no need for private placements in 2007. In a couple of years the uranium production could reach 1.5-2 million pounds per year. My calculation stipulates a 1.5 million production for 2009. Then EFR would reach profits (before tax) of around 112.5 USD (assuming long term average uranium price USD 80) thanks to the vanadium production which is assumed to cover all costs for the uranium business. After 35 % tax and full stock dilution (around 62 million fully diluted shares , but I assume there will be 75 million later for further capitalization ) that would correspond to about earnings of around 1.21 CAD per share, (with USD = 1.16 CAD). Applying a reasonable p/e ratio of 10 indicates a very fine long term potential CAD 12.
My discounted EFR price target for 2007 is calculated with a yearly 25 % interest rate, very high due to the high risk, which results in CAD 7.75. The interest rate corresponds to a total 23 % risk discount compared to a calculation with a 10 % interest rate.
The risk factor number one would be that EFR cannot deliver (uranium production) these amounts of uranium soon enough, but on the other hand the production could reach the rate 2 million pounds per year as soon as some time during the latter part of 2009 which would imply an even higher long term stock potential. The calculation also postulates that EFR expands its resource base to at least about 20 million pounds of uranium within a few years. Furthermore the assumed total cost coverage from the vanadium production might be too optimistic, e g if the market price of vanadium declines significantly. If the long term uranium price average 2009-2018 will be expected to stay well above my current USD 80 calculation assumption , the stock price potential should be adjusted upwards accordingly, and vice versa.
In summary the risk/reward thus seems very attractive for EFR at the current stock price level. Therefore EFR is still one of my near term producer long term picks for a 2007 uranium stock portfolio.
Anyone with other input data can, as always, change these figures easily and do their own rough, simple and I think very useful calculations for an absolute and relative stock valuation purpose.