Mantra could be a mistakehttps://www.stockhouse.com/Bullboards/MessageDetail.aspx?p=0&m=31059350&l=0&r=0&s=PDN&t=LIST
ARMZ was too aggressive in taking out Mantra. They paid top $ for the acquisition even after the Japanese incident. They paid way too much & there is a chance that one day it can come to haunt the company. Too much of goodwill paid & if the U308 prices do not improve in the coming years they would have to write down on impairment of goodwill. It is still too early for all that. UUU just owns a small part of it so far. I have never like the Mantra deal. This can cause trouble for UUU one day. I remember that UUU had to write down a huge amount in impairments in their South African operations & finally gave away the assets for only $50 million. That was the time that UUU had broken below $1.00. This is all very old history.
The U assets that are getting interesting & will become more interesting if the share prices continue to drop further to 52 week low. Both PDN & DML are in trouble because of U308 prices. PDN just hit $1.30 & DML is under $1.50 per shares ( Despite takeout rumours). Their market cap $1.2 b & $600 million. Now if their share prices drop further to 52 week lows or around a $1.00 each then they become even more compelling buyout. Both the companies are in serious trouble. They are both up for sale. If their share prices get down to around a $1.00 they become very interesting take out play & may offer a decent risk to reward ratio. Time is only big issue. The 52 week low of PDN is $1.07 & DML $.87. They are both capable of hitting those levels & lower in certain conditions.
Both the companies have some good quality & massive U308 reserves & at good locations. Their present cost of production is high & at the present U308 they have serious liquidity issues & cannot survive on their own balance sheets if the present U308 prices do not improve. They would need some deep pocket buyers like CCO Rio tinto. ARMZ or the French group Areva etc. The chances are that they could be should at stressed prices. The long term shareholders at much higher prices will have to take huge losses.
UUU has cash balance of over $500 million. Which is kind of ear marked for the remaining assets of Mantra. UUU already owns a small percentage of Mantra assets. Before they consider taking out / over the remaining assets they should do a proper study & review the other assets that are now avaible in the market. They can do a equity / cash deal.
I am not too sure that the board members of UUU are too independent. What is in the interest of ARMZ will happen & not necessary in the interest of minority share holders.
With PDN at $1.30. DML $1.50 & UUU at $2.57. UUU is a better buy anytime. Markets are strange PDN share price is lower than the price of DML. Though PDN has double the market cap of DML. DML has too much of take out premium built in.