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BMN - Bannerman Energy

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Good figures DJ

My comment is taken out of context, (or I didnt phrase is correctly);)

The question posed is BMN overpriced NOW .. my answer is NO ... however should U prices keep dropping & sector sentiment totally evaporate then it will struggle, as will all.

If BMN get to production of 4000t p/a .. then we wont be seeing sub-$10 prices.

So it comes down to risk/reward

cheers
 
kariba said:
If BMN get to production of 4000t p/a .. then we wont be seeing sub-$10 prices.
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Increasing production with minimal incremental capex will help the valuation as you'll be reducing the impact of depreciation/amortisation per lb of uranium, but I disagree that $10+ would be a certainty. I'll run the figures through the model this evening, but grade/uranium price is still the largest variable affecting the valuation. Gut feel is maybe or dollar or so on the average valuation...

Some questions to help improve the model
- What royalties and local taxes will there be on production?
- Does the capex figure include waste? (From an accounting perspective, waste removal can be capitalised, but in a finance world it's seldom included)
kariba said:
So it comes down to risk/reward
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I guess this is the crux of BSD's point. What discount do you demand of this kind of project this number of years away? Really, its an individual thing, some people have higher tolerances for risk than others. The market will find a happy median.
 
There are big beliefs that BMN is a double digit stock.


The market perception can be misleading.

I hold only because logic tells me this stock will be worth more when producing than as an explorer.


I think they will produce at some point, so I am paying for that risk now.

What it gets to I dont know. I think they will get taken over if the numbers stack up.
 
doctorj said:
I'll run the figures through the model this evening, but grade/uranium price is still the largest variable affecting the valuation. Gut feel is maybe or dollar or so on the average valuation...
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Increased productions to kariba's upside target with a 15% increase in capex and the matrix spat out the following:
Min NPV/Share $1.09
Max NPV/Share $13.11
Median $6.75
Average $6.84
 
doctorj said:
Increased productions to kariba's upside target with a 15% increase in capex and the matrix spat out the following:
Min NPV/Share $1.09
Max NPV/Share $13.11
Median $6.75
Average $6.84
Click to expand...

So at 2.37 currently they are a good buy? Is there any way to guage the likelihood that they will be able to carry through to production? They say full production by mid 2011 but what sort of things can go wrong in the meantime? Are there other exploration companies that I could compare BMN to that failed to reach production stage and closed up shop?

Also if anyone subscribes to fat prophets, What is their current recommendation on BMN, or are they just keeping a close eye on it?
 
voigtstr said:
So at 2.37 currently they are a good buy? Is there any way to guage the likelihood that they will be able to carry through to production? They say full production by mid 2011 but what sort of things can go wrong in the meantime? Are there other exploration companies that I could compare BMN to that failed to reach production stage and closed up shop?

Also if anyone subscribes to fat prophets, What is their current recommendation on BMN, or are they just keeping a close eye on it?
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We should try and stay clear of any 'buy' recommendations voigststr. It's against ASIC regs and ASF policy. It's best just to stick to valuations and whether something may be 'undervalued' or have 'great potential' or something vague like that.

On the figures presented it would seem to be undervalued, but as has been pointed out, the discount for the time to production needs to be considered. The question is how much of a discount that should be.

It's hard to put a % chance on this of mining, but you'd have to say somewhere close to 100%, but there are risks.

They are:

**Uranium price falling through the floor making it uneconomical. Extremely unlikely. The only thing that might cause this will be a major nuclear disaster, somehow stopping the use of reactors, or future development. Price may come off if some of the major mines dramatically increase production, and/or if Cigar Lake gets on line much quicker than expected. The last supply/demand curve I saw still looks like uranium deficit for years, thus supporting the price of U.
**The water desalination plant not being constructed. Very unlikely. Unsure of the likelihood of delays..
**Power not coming in from Zambia. Very unlikely, construction has already started. Maybe delays here to?
- The above two are not war stoppers in my opinion. I think if neither come through other solutions will be found.
**A grose error has been made in the resource estimation to date and/or drill results have been fabricated. :eek: ;)

Can't think of anything else at the moment.

So, IMO, close to 100% that it will mine, but I hate using certainties so let's discount one percent for each of the above realistic points. 97%. :)
 
voigtstr said:
So at 2.37 currently they are a good buy?
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Like I said in a previous post, it depends what discount you demand for the risk inherent in the project/country/market/time until they mine etc etc. And of course what your own modeling shows them to be worth. I share that for educational and discussion purposes only.

eg. Kennas reckons they have a 97% chance to getting to mine, so he may be comfortable buying. I might side more with BSD and demand a higher premium because I don't think things are quite so certain. Perhaps a discount of 2-300%?
 
doctorj said:
eg. Kennas reckons they have a 97% chance to getting to mine, so he may be comfortable buying. I might side more with BSD and demand a higher premium because I don't think things are quite so certain. Perhaps a discount of 2-300%?
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I am biased as well as I own the stock. You can never be totally objective when $$s are on the line IMO. (PS, unless you're a mechanical trader)

Also, while I am sure they will be a miner, I have at no time said exactly what price they should be valued at because there is still a lot of uncertainty up to production. With what I have seen however, I think a current market cap of $350m ish, has some room to move. Even if they double the shares on issue to get the financing to production, a market cap of $700m looks cheap for something with 100m lbs ++, just at Anomaly A.
 
The economics of the scoping study look robust and there will be plenty of margin even should U price weaken further, anything above US$50 and it still looks very good (for my risk tolerance). I believe when they are in production U price will be well north of this, but the scoping study gave me confidence they can produce at a much lower price than current spot. The X factor is the further exploration upside, I believe they have merely scratched the surface of the total resource when you consider the potential of the other anomalies.

So this satisfies my criteria - very good value based on scoping study, stronger U prices medium term, excellent exploration upside.

PS I view holders having a free option on further exploration success, at current share price.
 
Lets just hope that Bannerman sees the same results as Lihir Gold did the other day when they started trading on the TSX:eek:

Yes I know the POG is also a factor, but its just an encouraging thought to think BMN could do likewise:)
 
The u price has obviously had a bid effect on the SP with current
U price $85/k.
What will move the price up,given that the US fed has already dropped the prime rate and the Dow has responded.
Are the Russions still chewing on there stockpile?
Gotta tell ya's.. I caught my favorite band Steely Dan in Melb last night..sensational:cool:
 
DAZT49 said:
The u price has obviously had a bid effect on the SP with current
U price $85/k.
What will move the price up,given that the US fed has already dropped the prime rate and the Dow has responded.
Are the Russions still chewing on there stockpile?
Gotta tell ya's.. I caught my favorite band Steely Dan in Melb last night..sensational:cool:
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ruscos still chewing on their stockpile, but not for much longer i thought i read
they may decide to keep more now a bit richer and with geopolitical changes....
good article on how many experts predict the spot has found bottom today
shag
 
Chart review. I'm waiting for a confirmed break up to top up. Breaking $2.50 may be enough for me, but $2.75 for sure. $2.50 looks imminent, but BMN hasn't ceased to disappoint the past 6 months....
 

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Kennas,
I would go along with that. BMN and PDN charts look very similar. BMN holding above 2.50 people should start to believe the downtrend has been broken. Technically speaking, but as more of a potential turnaround, MTN should start to attract interest from here also.

As PDN goes, so I believe the others will follow. For people who like the fundamental story with these particular uranium stocks, now is not the time to take your eye off them.
 
kennas,
Sorry..freudian slip?? lol
I do speak to your old sparring partner now and again over on the dark side.
Yes BMN has been very disappointing,dont know what has caused the flutter this am but I am sure it will be "as usual" this arvo and probably finish in the red.
 
The boys are certainly happy this morning.
Check out the course of sales this morning..weird, these trades must be online or the brokers would be making a fortune(as they do anyway).
The gap opening is, as always, a concern hope it can hang on to most of the gains at close of play.
 
kennas said:
:D I bet the BMN band of brickheads are going bananas over there due to 350K shares traded so far. Probably 100 posts on a blip....LOL
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Hey Kennas,

Usually appreciate your posts. And you're in a very enviable part of the world. Was in Ecuador last year and loved it. So you had a bit of a difference of opinion with Chris. Does not make all of us on "the other BMN" thread brickheads though. And DAZT, which side is the dark side is just a matter of viewpoint isn't it. BMN having a good day, hope it continues. Good luck to all.
 
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