RE:RE:RE:RE:The game Look it, orphan period lasts 4-5 years for gold stocks. Much longer for U stocks which are more difficult to permit. Especially for open-pit mines where there is major surface disturbance and hazard from radioactive dust and potential water treatment. FCU is dead money.
PamplonaTrader wrote:
Gremlin92 wrote: https://seekingalpha.com/article/3321295-with-best-in-class-uranium-explorer-fission-about-to-merge-nexgen-energy-is-ready-to-take-over-the-top-spot
Thanks for posting, Gremlin92.
Nice article. However, I disagree with the multiplier he uses to arrive at his price target for NXE.
While FCU bulls often cite the relatively advanced status of Triple R as a reason for valuation premiums over newer discoveries like Arrow... that is not how it works in reality. The term "de-risked" gets thrown around too liberally. A deposit is proven through drilling and is said to be de-risked through scoping studies because risks that are otherwise hidden are brought to surface. Things like potential permitting problems, metallurgical issues, as well as technical and engineering challenges.
Too, exploration and development do not generate revenue. Therefore, the enterprise is diluted to raise dollars in order to pay for the scoping studies. An explorer can allocate more of these dollars to accretive activities like exploration. However, a junior in the development stage can not allocate most of its dollars to exploration... it must instead allocate to studies that have the potential to surface risks. As such, speculators tend to leave during this period of the junior mining life cycle:
