Shaw on AMW SP, Fukushima & Resource Estimate In the Comments section on Malcolm Shaw's latest article on PLS (at the Seeking Alpha website) a reader asked these questions and he gave the comments below:
Questions:
I wonder if some of the share underperformance in Fission/Alpha can be attributed to:
1) uranium investors burned in 2007 bubble and Fukushima crash have stayed away.
2) low uranium prices on the market, much closer to actual production cost than before, may mean a lower takeout premium per pound for explorers.
3) portfolio managers in general apathetic to anything nuclear after Fukushima.
Comments:
"I doubt (1), especially given that HAT was a story that started in 2008 and was bought about 2.5 years later. Also, the run in uranium stocks was impressive from Q3 2010 right up until Fukushima in 2011.
"As for (2), you're really talking about spot prices, not term prices. Anyone looking at a company on a takeout basis would only take spot prices into consideration as much as they are relative to the project. You buy good assets when they are available in this sector, because they don't come around very often.
"As for (3), that's possible, but time and time again, perceptions change when the fundamentals do. It's a "when not if" trade. I believe that being able to see that dispassionately is a real advantage in any investment situation.
"As I mention, I think the Patterson Lake is cheap on a comparative basis for the reasons mentioned in this article. HAT is an excellent recent market comparable and no investor can deny that in light of the information on the table today."
Resource Estimate:
Shaw was also asked when an official resource estimate might be made at PLS. His answer was:
"Maybe this time next year. They could do one now, but there would be little point as such a small area has been drilled so far. Resource estimates take time and human resources. The fact that the company 'could' do one now is impressive on its own and having a potentially material resource defined with one drill program is almost unheard of in the mining sector."
Seeking Alpha article: https://seekingalpha.com/article/1406741-q1-drilling-shows-patterson-lake-makes-the-grade-literally