ERA - Energy Resources of Australia

[Gurgler]

Waiting for a CFD long trade in (ERA) at the moment. Probably has hit its intermediate bottom and is looking to go higher from here. Nice little double bottom shaping up with very nice divergence in OBV and MACD.

Lachlan

Would you say this is now an inverted head and shoulders, now?

What do the other indicators tell you about future movement?

 

[56gsa]

IF the present slump in ERA is due to the fall in the short-term spot price in U then it looks like a good buy imho... 3 reasons:

1. ERA is getting about US$20/lb for its production - a slump in the U price therefore has no real impact unless it goes below this level. The LT price for U is still high (I think I read US$95/lb somewhere), but even if they just wrote new contracts at the level PDN did (US$60/lb) we're talking a tripling in revenues.
   
2. The force majure I don't think has forced them into buying U off the market to supply contracts (but if they did then fall in U price would be positive!)
   
3. Only 2 weeks ago they announced a profit and increases in out year production figures, they are also putting a lot more effort into exploration and trying to expand Ranger defining a new pit with possible two-year mine life. Also investigating several options to improve processing etc.

has anyone heard anything specific re ERA in last couple of days?

does the chart suggest a triple bottom? any t/a thoughts?

 

[56gsa]

ERA looks to have found some support just above $18 this morning - any thoughts on the chart? $18 looks critical support - not only for short term double bottom but also long term trend from Jan 2003

 

[Gundini]

You would think this a good entry point 56, although I am still concerned about future earnings due to the impact of flooding. Seems to be a fair bit of room for disappointment. I'm a bit on the fence with this one.

17/07/2007 9:46AM

MELBOURNE (Dow Jones)--Uranium miner Energy Resources of Australia Ltd. (ERA.AU) Tuesday said second quarter production at its Ranger mine has risen but flooding will continue to impact operations into 2008.

Heavy rains in February and March have seen the water level rise at the mine in the Northern Territory, disrupting production and forcing ERA to give guidance for a first half loss of between A$5 million and A$10 million.

"Production and sales deliveries for the balance of 2007 and 2008 will continue to be affected as a result of water levels in the pit delaying access to high grade ore," ERA said Tuesday.

The Rio Tinto Ltd. (RTP) subsidiary produced 1,490 metric tons of uranium in the second quarter, up 150% on the previous corresponding period which was also impacted by heavy rains and cyclones.

Rio said a rise in production was due to processing of high grade ore that was mined and stockpiled prior to the wet season.



-By Alex Wilson, Dow Jones Newswires; 61-3-9671-4313; alex.wilson@dowjones.com

 

[Gurgler]

Here's some good news at last. Will this egg on the ERA revival in sp?

Green light for uranium sales to India
Posted 06.10 August 15, 2007.


Australia has reversed its policy of selling uranium only to signatories of the Non-Proliferation Treaty. (AFP: BHP Billiton/SkyScans)
Australia has ended its ban on uranium sales to India, with senior ministers meeting late last night to reverse a policy of selling the nuclear fuel only to signatories of the Non-Proliferation Treaty.

A report in The Australian newspaper says Foreign Affairs Minister Alexander Downer convinced cabinet colleagues that a uranium deal with India was in Australia's interest.

Under the proposed deal, Australian nuclear inspectors will be allowed to check that uranium is used only for peaceful purposes and not diverted for nuclear weapons programs.

Mr Downer has ruled out exports to Pakistan, saying the country has a very poor record of proliferation

Prime Minister John Howard will contact his Indian counterpart, Manmohan Singh, to explain the conditions of the proposed export deal before officially announcing the agreement.

 

[Sean K]

ERA chart is looking interesting.

Hit those H&S targets, bumping it's way down to some long term support and 200d ma.

It will be interesting to see how it handles this.

Gotta be one of the worst performing 'blue chips'. It's halved in 4 months!

It's on my bottom picking potential list.

If they get the go ahead at Jabiluka, then it'll probably find a bottom then.

Of course, if the DOW goes down to 300, then it might struggle.

 

[Gurgler]

Happy with the move on Friday. Is this the beginning of some sort of recovery - if it consolidates above $20?

 

[juw177]

This has finally broken out and I took a long position at $21 when it showed good strength above $20. Next resistence should be between $23-24 mark that was around June.

 

[Gurgler]

Originally posted on PDN thread:

With the misfortunes of TSX.CCO -1.73 (3.59%) *more Cigar Lake delays* & TSX.UUU -2.48 (19.48%) *slashing production forecasts*, comes fortune for TSX.PDN +0.53 (7.78%) finishing at $7.34. Nice!

Also last nights U futures for December was up another $5.30 to finish at $97.30

Thanks, eMark.

Surely this must augur well for this other big U-producer? I look to an ongoing recovery for ERA, Technically, was that a (misshaped) cup and handle occuring over Aug-Oct?

 

[Lucky_Country]

No real movement in ERA for some time now seems to have got support around the $19 mark.
Am looking forward too the next quarterly report on production and spot price sales.
Anyone know when there hedging expires? Is it late 2008 like what I thought I heard some time back or does anyone know different?

 

[chops_a_must]

No real movement in ERA for some time now seems to have got support around the $19 mark.
Am looking forward too the next quarterly report on production and spot price sales.
Anyone know when there hedging expires? Is it late 2008 like what I thought I heard some time back or does anyone know different?

As am I.

I can't see any reason to be long ERA. Still firmly in an almost year long downtrend, in a market that is showing a tendency to roll over on stocks in established downtrends. Seasonal mining difficulties coming up... in what looks to be a very wet wet season. Just a few reasons to get short... plus, ERA reacts badly to any market correction...

But there is both good and bad news. The good news being that this should only get to it's lower trend line. The bad news is, that trend line will be between 10 and 11 dollars if/ when it gets there.

A couple of T/A observations. I'm assuming we are in a corrective c of some sort. A symmetrical C should see this get to about 10.80. We also have quite an obvious and symmetrical H&S pattern just about complete. The breakdown target from that is in the low 12's. Another interesting thing, is that this has had almost no buying interest on dips. Volume just stays flat. Virtually no interest on up days of late either. All this points to a high probability of seeing ERA between about $12 and $11.

With the chance of a very good R:R trade on it.

Cheers.

P.S. - obviously I'm shorting it.

 

[Lucky_Country]

August correction U3O8 was trading at $60lb ERA dropped too $16.
U308 now trading at $90lb and set too rise too $105lb in the first quarter we wont be seeing $16 a share again IMO.
I think production will be on the upside with an increase in spot sales Admittedly the heat has gone out of the uranium sector and is a bit stagnant but is still a sound investment with a few brokers having a $28 target price on ERA.

 

[Sean K]

I can't see any reason to be long ERA.

Technically I haven't an opinion atm, but a cat out of the bag may be the approval of Jabiluka. Wouldn't want to be short when the locals come out and say 'dig that **** up!' My tip would be at least a 30% jump in sp.

 

[Lucky_Country]

Jabiluka would real set a fire under the sp as would the conclusion of ERAs hedgebook which I think will finish sometime this year.
Jabiluka has alot of bad blood over it but peace has prevailed and the local people maybe warming too the idea and the employment and training opportunites it would provide.
Looking forward too the months quarterly and half yearly results may give the sp a boost.

 

[Sean K]

Jabiluka would real set a fire under the sp as would the conclusion of ERAs hedgebook which I think will finish sometime this year.
Jabiluka has alot of bad blood over it but peace has prevailed and the local people maybe warming too the idea and the employment and training opportunites it would provide.
Looking forward too the months quarterly and half yearly results may give the sp a boost.

I think once they realise what the end of Ranger will mean to their ability to sit at a table at the MGM Grand then the ink will be flowing. It's like death, first years, and taxes....

 

[nitpra]

Planning to short this only if it goes below 18.50 as this appears to be the immediate support level. Also, during the last three years, there had been an upward movement during Jan-Mar. Any comments on this ?

 

[Lucky_Country]

Finally found it !
ERA Annual General Meeting:Chairmans Address 19 October 2000.
" The company continues too write new long term contracts, with three new long term contracts signed in the last financial year.The company has in place for the sale of 23,000 tonnes of uranium oxide over the next 8 years"
So anytime between now and the end of this financial year these contracts are set too expire now that will give the sp a real boost.

 

[treefrog]

having a divvy worse than BHP has not been attractive for ERA but forecasts are looking much better so may be helping the potential upside
ERA(.8%)
2006 2007 2008 2009
EPS 22.9 22.0 52.4 106.0
DPS 17.0 12.0 22.1 89.7

BHP(1.5%)
2007 2008 2009 2010
EPS 275.0 315.0 388.4 354.8
DPS 55.4 65.3 74.8 83.0

Last three years this share loves performing H&S and DT patterns and then dipping about 76% fib level so current H&S that chops refers to may complete around $17 and agree LT trendline is also around $17

 

[treefrog]

ASX ann fri 4th "presentation - melb mining club" appears to indicate we are entering a period of world oversupply for a few years from 2008 before getting back to shortage from 2018/9

essential perusing for any holding U stocks

 

[Lucky_Country]

Mining projects such as Cameco will not come onstream until 2011 and supply is tight and uncertain.
ERA is selling its uranium at an average of $17 lb due too long term contracts signed years ago as I stated in one of my previous post they are due too expire this year according too the stated chairmans address.
With that in mind there sales revenue will more than triple over the coming year at todays spot market price.
Jabiluka is obviously still in there plans and could be given the go ahead at anytime.