Strathmore Minerals Corp STHJF

RE: royally screwed

[GUNSS]

The following ten Uranium stocks are up an average of 54% from their respective 52-week lows.

Strateco Resources
Virginia Energy Resources
Uranium Resources Inc.
European Uranium
Uranerz Energy
Deep Yellow
Areva
UR-Energy
Cameco
Uranium Energy Corp

By comparison, Energy Fuels, (EFR.TO), is up just 27% from its 52-week low. These ten peers have rebounded twice as much as Energy Fuels. I think that there's ample room for Energy Fuels to close that gap.

Energy Fuels has more fundamental upside than global peers due to its 100% ownership of the only conventional Uranium Mill in the U.S., White Mesa. The White Mesa Mill has nameplate annual capacity of 8 mm lbs of uranium.

Dundee has a price target of $0.75 per share for Energy Fuels, compared to the current price of $0.165. Energy Fuels is most leveraged to big moves in Uranium prices. At a $70 long-term price, I think the Company's stock could more than double to $0.35-$0.40 per share, still half of Dundee's price target.

At $80 + long-term Uranium prices, within 10% of where prices were immediately prior to the March, 2011 Japanese disaster, Energy Fuels could be worth $0.60-$0.70 per share. That's because with Uranium prices above $80 per lb, a lot more third-party ores could be toll- milled at White Mesa. I estimate an incremental 1.5-2.5 million lbs.

Included in the Company's third-party ores opportunity is, "alternative feed," which consists of various types of nuclear waste. The toll-milling of alternative feed generates much higher margins because there's no associated mining cost.

By 2016-17, Energy Fuels could me mining and/or milling 2-3 million lbs of its own Uranium and 2-3 million combined third-party ores + alternative feeds. The blended margins on this 4-6 million lbs coming out of White Mesa would be quite attractive.

At the mid-point of 5 million lbs (vs. 8 million lbs nameplate), and a margin of $25 per lb, that's a $125 million before overhead. Assuming a 5 x multiple = $625 million. discount that back by 15% for 3 years, = $410 million - $10 net debt = $400 million.

Divide that by 800 million FD shares, (assumes ~15% incremental shares issued) = $0.50 per fully-diluted share.

I think the above analysis, 5 million lbs milled through White Mesa at a blended $25 per lb margin in the 2016-17 time frame is a reasonable scenario. That contemplates $40-$45 per lb. costs and $65-$70 per lb. realized pricing.