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ERA - Energy Resources of Australia

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Re: ERA.... Have i wasted my money?

Mrs P said:
hi, id welcome anyones view re ERA stock as i have a bit of $$$ in this stock and now wondering if ive stuffed up.
Im a newbie so please use words of one-two syllables please
Click to expand...

Mrs P,

Here are some of my views on ERA...

Cons
- Very negative sentiment against uranium stocks in general since Japan earthquake.
- Big problems at their mine - low grades, weather impact and potential costly clean up of big pool of radioactive water.
- They still need to satisfy their contract to deliver uranium to their customers - they have to buy in the spot market at a loss.

Pros
- Nuclear energy is going to be around and in general people tend to think there will be a supply shortage down the track.
- Not sure things can get any more negative on ERA than now.
- RIO is a major shareholder and they might do a takeover.

So what does it all mean to the future prospects of ERA? You will have to judge for yourself.
 
You have left out one important point ERA is sitting on the second largest Uranium mine in the world behind Olympic Dam, Jabiluka very high grades
 
thanks for the feedback..

gotta admit that the "pro's" were what i based the purchase on and before the issues in Japan caused the "cons"

Although im very new to this i still have a gut feeling based on demand, quality of output (longer term after they have mopped up ) that the shares will be good,
Unfortunately it doesn't help me with my short-term trading model...
"in-and-out in 3 months"

Frustrating that pretty much everyday there seems to be a 1-3% decline in the price, especially as its my own money thats locked up.
 
I looked at getting into ERA during the Japan crisis. I have ERA trading well above its value though.
I think longterm uranium will be in high demand. From what I understand, places like India and China will be relying on Uranium as energy sources.
 
zac said:
I looked at getting into ERA during the Japan crisis. I have ERA trading well above its value though.
I think longterm uranium will be in high demand. From what I understand, places like India and China will be relying on Uranium as energy sources.
Click to expand...


this is the murphys law stock , that chart is scary >>>>> stage 5 disaster . everything that could go wrong has . i dont think jabiluka is a high probability to go ahead . earnings forecasts for full year 2011 are next to zero and id be surprised if its not negative . one analyst has em pegged for negative 29.4c . buying into this is gambling imo .
 
Look the main problem with ERA is water management and getting water treatment up and running not the ore or lack of it with so much water around authorities refuses to allow ERA to pump water out the main pit into the river system the huge amount of water will dilute the pit water to a safe level thats where the problem lies
 
Re: ERA.... Have i wasted my money?


Following the footsteps of PDN and outdoing them by a long shot, ERA announced a 12-for-7 capital raising at a hair-raising $1.53...

For the record they were trading at $27 ~2 years ago, and ~$5 when I said "Not sure things can get any more negative on ERA than now". Turns out the answer is a big YES.
 
Re: ERA.... Have i wasted my money?


With the BHP Olympic Dam expansion, the supply side of the uranium equation will not get any tighter in the future.

ERA's days as the low cost producer are gone.
 
Re: ERA.... Have i wasted my money?

Does anyone know the level at which RIO are participating in the capital raising?
Are they buying all their entitlements?

I imagine the iron ore sales whilst I write this could probably fund the acquisition
 
what are peoples thoughts on picking up some ERA stock in the current market? Im looking longer term over the next 2-3 years for share price appreciaiton?

Cheers JB
 
ERA is sitting on the second largest Uranium mine in the world behind Olympic Dam, Jabiluka is in the Northern Territory with very high grades.

At first glance it's unbelievable that it would be down today given Australia is now going to be selling Uranium to India who intend to use Uranium to generate over 40% of their power. Rembering India is as big as China!!

At second glance with a succesful fill of it's failed capital rasing at $1.53 as it's announcement this morning it's believable that it is 2% down on this game changing day for Ausi Uranium selling.

At third glance RIO owns 80% of ERA and took up all of it's entitlements in the rasing.

At fourth glance. It was trading higher than $6 before Fukushima.

At fifth glance the world is entering a financial catastrophie unless Germany allows ECB to print.

At sixth glance for Germany to agree to ECB to print bonds will take too long to prevent a meltdown in the mean time.

I baught any way.

Tight stop in place.
 
Nice cheque in the mail (dividend) & now the sp is heading north. Got a long way to go to reach pre-Fukushima levels though (& a long way to go to reach post-Fukushima levels when smart-a**es like me bought ). Still, I think the India decision will help a lot
 

Last dividend was paid in Aug 2010 according to WebIress.

That's a pretty slow mail.

 
At the current price, $1.28, I find it to be still expensive. Looking at the previous 10 years history, ERA has not been adding value for its shareholders. In another word, all of its previous earnings has been used up for capital expenditure. Even though it has been distributing dividend, it lately asked for more huge capital to do expansion as its current mining location has been depleted.

I think it should have not distributed any dividend. That way, ERA can have the tax benefit.

At the same time, as in any resource industry, the value of ERA is linked to the price of its uranium. Uranium is in high demand, even after the Fukushima disaster and the announcement that Germany will be shutting down its nuclear plant. Uranium demand FAR outstrip the supply. So, why doesn't its price goes up? I think the answer lies in USA and its allies. They control the enrichment of Uranium. without this enrichment, the uranium from the mine, cannot be used directly for power generation. Also, another factor is that because nuclear power plant buy its enriched uranium with contract lasting for years with a standard price from standard suppliers such as ERA.

I also believe that currently, nuclear power is the future power generation as it is very efficient and can produce huge amount of power to replace fossil fuel generated power. Nuclear technology is in its infancy as there are theoretical nuclear technology in development, such as the fast breeder, that would and could replace all of the fossil fuel generated power and last hundreds of years into the future. But, fast breeder and other technology has been in research for a very long time with no successful implementation in sight.

In short, ERA is a risky holding.
 
ERA has taken off over the last few days, I bought when it was in the doldrums. Worth a watch. For the fundamentalists a very upbeat report 2 days ago.

gg
 
My modified Turtle breakout has been triggered by ERA a few times now with no result.
It does seem to be forming a base recently so maybe its the beginning of a new trend ?

(click to expand)
 

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