Its my opinion that this is another low grade large tonnage resource. Looks fine to me. Closer to the surface. The grades confirm the historics. Namibian uranium plays have been getting hit of late though. Aussie investors dont seem to like the lower grade large tonnage resources.
ERN - Erongo Energy
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Its my opinion that this is another low grade large tonnage resource. Looks fine to me. Closer to the surface. The grades confirm the historics. Namibian uranium plays have been getting hit of late though. Aussie investors dont seem to like the lower grade large tonnage resources.
Im not really commenting on the viability of the results, im just stating that in the short term the correlation between the expectations and the actual result aren't in line. The market at present is not valuing the low grade, high tonnage deposits to the potential that some people on here see. The uranium sector as a whole is going to be a wild ride in the coming months/years.
Sean K
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Well, I think there's some positives and negatives about the ann.
Positives are that there's actually some uranium about at similar grades to current and likely producers in Namibia. Will depend on the tonnage and depth to whether it's going to be economical. At this time depth looks like it's open pittable, so good.
On the negative side, half the results were poor, which may have been what spooked the market. The one's I've identified on the results below do not make an economical mine. (in my vaste experience of analysing these things.
) They are also well off some of the historical results. Remember, this was supposed to be 25-35m thick. Perhaps these holes were the ones drilled to test extention of the historical resource envelope, but that is not clear. They probably should have stated this I think.
So, there is work to be done for them to convince the market they have something economical IMO. It's just six holes, and I think that I might be positively on the fence as to whether this gets up and running.
Positives are that there's actually some uranium about at similar grades to current and likely producers in Namibia. Will depend on the tonnage and depth to whether it's going to be economical. At this time depth looks like it's open pittable, so good.
On the negative side, half the results were poor, which may have been what spooked the market. The one's I've identified on the results below do not make an economical mine. (in my vaste experience of analysing these things.
) They are also well off some of the historical results. Remember, this was supposed to be 25-35m thick. Perhaps these holes were the ones drilled to test extention of the historical resource envelope, but that is not clear. They probably should have stated this I think. So, there is work to be done for them to convince the market they have something economical IMO. It's just six holes, and I think that I might be positively on the fence as to whether this gets up and running.
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I personally think the grades are the norm for Namibia. The average grade is around 230 ppm? Valencia, Goanikontes and Trekkopje deposits use cut offs of 80ppm and 100ppm. Not that the market is going to like what they have reported but for Namibia it is normal. Two other deposits are being developed atm being Valencia and Trekkopje. Both BMN and ERN have substantially lower market caps than both these Canadian companies. Thats why I see value in the Namibian plays such as Bannerman and Erongo. Borshof seems to agree that the uranium market also needs low grade large tonnage resources but the Aussie market is thinking differently atm. Canadian market is thinking more along the lines of Borshof's thoughts.
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It can still close at 87cents – its not oversold just yet- 85cent was an obvious support barrier for ERN the sad thing is.. ern went down today with twice the average volume – that’s not good.. if it went down with average/below average.. I can say.. market over reacted.. but because the market dumped it with twice the average.. someone knows something.. strangest thing though.. the market didn’t even allow ERN to hit resistance at 1.14. the million $ question is why not? ERN has to hold 76cents.. if not.. its game over.
Should pick up? Who knows – right now its too risky.. if the company is good. I’d rather buy it at 1.14+. make a couple hundred? You can make a couple thousand dollars with stocks that have less then 1/10th of the risk involved compared to ERN – right now.. if I were to give it out of 10.. in regards to risk vs reward.. 2/10 not my style.. it doesn’t make any sense that ERN didn’t pick up when other resource giants did.. where’s the relative strength? It looks weak and risky.
Good = when/if it closes above $1.14 I might buy on the pull back..
Bad = if it does close above 85cents tomorrow it could possibly head of 76cents.. if it fails to hold 76cents… its game over.
Putting money into ERN = massive risk. Even if this does recover soon.. its going to go side ways for atleast a week.
Should pick up? Who knows – right now its too risky.. if the company is good. I’d rather buy it at 1.14+. make a couple hundred? You can make a couple thousand dollars with stocks that have less then 1/10th of the risk involved compared to ERN – right now.. if I were to give it out of 10.. in regards to risk vs reward.. 2/10 not my style.. it doesn’t make any sense that ERN didn’t pick up when other resource giants did.. where’s the relative strength? It looks weak and risky.
Good = when/if it closes above $1.14 I might buy on the pull back..
Bad = if it does close above 85cents tomorrow it could possibly head of 76cents.. if it fails to hold 76cents… its game over.
Putting money into ERN = massive risk. Even if this does recover soon.. its going to go side ways for atleast a week.
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For ERN to have any chance.. it must trade above 0.97cents to diminish the risk.. if and when ERN trades above .97 the risk would move from 2/10 to a safer 7/10 when it trades over $1.. risk levels would be 8.5/10 which would mean.. its time to buy… and watch it run to 1.14+ which = an easy 14%+ return.
Time will tell. Once again.. its game over if it trades below 0.76.,. if it trades below 0.85 its practically dead.
Time will tell. Once again.. its game over if it trades below 0.76.,. if it trades below 0.85 its practically dead.
One thing I must add. I think atm ERN is being fairly valued off what they have reported.
WME have a fully diluted market cap around 58 million
erongos fully diluted market cap is around 68 million. Thats not counting the cash from the oppies conversion etc etc. I believe they will have similar resource sizes based off the historics and size of Erongos anomalies. Of course there are further anomolies on the licenses to be tested but all we can go by is the one they are working on atm.
Erongo have a lot more land coverage than WME and have a large amount of prospects on their licenses. So around the 90 cent level I believe is fair value?
WME have a fully diluted market cap around 58 million
erongos fully diluted market cap is around 68 million. Thats not counting the cash from the oppies conversion etc etc. I believe they will have similar resource sizes based off the historics and size of Erongos anomalies. Of course there are further anomolies on the licenses to be tested but all we can go by is the one they are working on atm.
Erongo have a lot more land coverage than WME and have a large amount of prospects on their licenses. So around the 90 cent level I believe is fair value?
practically dead? ok..watsonc you use a very weird trading style. Erongo have large land coverage in Namibia..they have confirmed historics..and the grades are normal Namibian grades. I dont see your logics in how you predict the SP. One other thing to note is the Namibian government isn't granting anymore licenses anytime soon..so whats been granted is what there is. These companies exploring in Namibia now will be a year or two in front of any other companies that do get any further licenses once the government does decide to starting awarding epl's again. I really dont know what investors were expecting. I thought it was all in line with expectations. Of course people were hoping by a miracle we got some super high grades hits but the whole purpose of the first drilling campaign was to confirm historics.
Sean K
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Watson, Have no idea what thise fractions are. Odd. As far as support goes, yes, 85 and 75 are some support, but there's possibly better support at 70 as it coincides with the support trend line, so I wouldn't describe it as practically dead breaking 85. This has swung around quite a bit as you can see, and it's still well within the trend channel atm. I thought breaking out through the upper band spelt bad karma in the short term which has been validated. Too early to kill this off yet IMO, but I'm sure the market will make up it's own mind. Might really depend on future drilling. If they produce many more low widths under 200ppm, then they're off my Christmas card list.
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Sorry, I was refering to jumping in 2moro morning and buying the stock for a short term trade. Sorry if there was any confusion.
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Just my
but they would be off my Christmas card straight away.An average of about 10m @ 240ppm just confirms why the deposit was not mined in the past and it`s still not economic (yet).
They only have 1 rig it seems, so I would not expect regular drilling updates.
Future drilling will need better grades at much larger intervals it is ever going to mine.
Just my
An average of about 10m @ 240ppm just confirms why the deposit was not mined in the past and it`s still not economic (yet).
They only have 1 rig it seems, so I would not expect regular drilling updates.
Future drilling will need better grades at much larger intervals it is ever going to mine.
Wow so negative.
Uramins deposit below.
Inferred Mineral Resource of 139.2 million pounds U3O8 (502 million tonnes at a grade of 0.013%), both estimated using an 80-ppm cut-off grade. Trekkopje is expected to become one of the world’s ten largest uranium mines when it achieves production
130 ppm average.
Forsys deposit below
100 ppm cutoff 160ppm avg for 41.1 million pounds of uranium
Its pretty obvious to see these low grade large tonnage deposits are worth money. Aussie investors just need to come around to the idea. Thats the reason why Bannerman are allready wanting to move onto the TSX. Re-rating will occur once this happens.
Uramin Market Cap - 1,930,997,638 CAD
Forsys Market Cap - 461,693,565 CAD
Trading at .569 Euro. Strong support in Germany. Turned over heavy volume. Got hit initially down to .53 euro. Currently at .569 euro.
0.569 EUR = 0.920341 AUD
Volume: 1,103,382
I think the Germans know value when they see it? Dont forget Erongo shouldnt only be valued purely off this announcement. The land coverage they have in Namibia is huge. They hold a 90% interest on their epls. They also look to be building some substantial mineral sand epls that could very well be spun off into a new entity to existing share holders as an in specie distribution. Still plenty of upside left IMO. This doesnt mean that the SP will go up tomorrow though.
0.569 EUR = 0.920341 AUD
Volume: 1,103,382
I think the Germans know value when they see it? Dont forget Erongo shouldnt only be valued purely off this announcement. The land coverage they have in Namibia is huge. They hold a 90% interest on their epls. They also look to be building some substantial mineral sand epls that could very well be spun off into a new entity to existing share holders as an in specie distribution. Still plenty of upside left IMO. This doesnt mean that the SP will go up tomorrow though.
This is a post for all Erongo holders who may not be aware of the price action in Germany tonight. It is fair to say they dont really care about the price action here in Australia. Currently at .61 euro.
0.61 EUR = 0.986114 AUD
On continued heavy volume
Volume: 1,186,542
Maybe they will fall off a bit? They didnt have as negative a reaction as there was on the Aussie Market today.
0.61 EUR = 0.986114 AUD
On continued heavy volume
Volume: 1,186,542
Maybe they will fall off a bit? They didnt have as negative a reaction as there was on the Aussie Market today.
watsonc, it's game on! ... things are hotting up!!!
ERN finished at .595 euros in Frankfurt last night ... equating to .96aud ... just 1 cent away from your 7/10 scenario above; and just 3 cents away from your 8.5/10 scenario ... and an easy 14% return!
Dont forget the volume.
Volume: 8,596,876
It also touched a high of .625 Euro
0.625 EUR = 1.00908 AUD
but did finish at .595 euro as blimp said. Thats the most volume I have ever seen traded over there..some major turn over happening.
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It was in pre-open for two days so that may help explain the "pent up" sell volume.
What is apparent is that the target tonnages here are extremely large. Area 1 is 1800 x 1000 x 65m = appox 292,500,000 tonnes @ density of 2.5 t per cubic m. The first six holes indicate (extremely rough guess) that about one third of this tonnage in the small area of the historical drilling may be about one third of the tonnage down to 65 m may contain economic grades.
Another extremely rough calculation (taking all of the assay grades in yesterdays report and averaging them over Area 1) gives us .57 pounds of u per tonne. Extrapolating these "guesses" over Area 1 gives 97,500,000 tonnes @ .57 pounds = 55,575,000 pounds of open pittable u. potential.
Then there are at least five other major targets on ERN leases. At current valuation on 46,000,000 shares at 90 cents = A$41.4 million ERN becomes a major target for a u predator looking for u that can be drilled and fast tracked to production. Good luck to all longs
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Very good call on the technical pattern. On the fundamentals i lean to the view that at 82 cents / $37.7 million ERN is a takeover target. IMHO that is why Lehman has about 8%. To-day's trading is a gift to them and possibly others. The potential targets are just too big to ignore. OMC (across the border) got taken out at about $150 million and ERN potential is much greater with similar grades of u but much larger tonnages.
Logique
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As a holder I see the present situation as an opportunity rather than a risk.
In my view the price overreacted both prior to, and after the recent announcement. In a background where U spot price continues to trend up, and availability is lagging demand, talk of $200/lb, and supply shortages through 2007/2008, I don't see a reason to be worried about ERN's prospects.
In my view the price overreacted both prior to, and after the recent announcement. In a background where U spot price continues to trend up, and availability is lagging demand, talk of $200/lb, and supply shortages through 2007/2008, I don't see a reason to be worried about ERN's prospects.
