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SMM - Summit Resources

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Brujo said:
I too am debating which way to play this one now though.
Click to expand...

Glad to debate with you with a lot reasoning. It has far more implication then just SMM only.

We has entered into a new era for uranium investing. We have to update with some new methods to value a company, sounds familiar?

The crazy period is well on its way....
 
Mmmmining, absolutely.

I am a survivor of the Tech Bubble, albeit trading much, much smaller back then.

So my general optimism for the commodity bubble is tempered somewhat by the knowledge of what happens when a bubble bursts! Not to mention what my future life would be like at the hands of my beloved other half if I were to hand back the gains I've made in this cycle!

The same heady signs are there, where a 50ppm assay in a costean somewhere leads to a rush on the stock. The major difference this time around is that with commodities generally, the action is driven by a fundamental supply/demand imbalance, rather than a guesstimate of how many users are going to access a particular internet portal.

I'm certainly proceeding with more caution as we go forward.

I'd be happy to retain an investment in SMM, but with the gains generated to date, the chance of a general market pull-back, and the bubble-like hysteria surrounding uranium plays, I'm happy to crystalise some of those gains, and risk a part of the profits to run further.
 
Being new to this, I am enjoying the debate. I am torn between wanting to take profits now or wait another few weeks?
 
timelord said:
Being new to this, I am enjoying the debate. I am torn between wanting to take profits now or wait another few weeks?
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Take profits as in sell all? Other options are to sell half, a third, or buy more. Doesn't have to be all or nothing. Food for thought.

(not a recommendation to do anything)
 
kennas said:
Take profits as in sell all? Other options are to sell half, a third, or buy more. Doesn't have to be all or nothing. Food for thought.

(not a recommendation to do anything)
Click to expand...


Any of the above I guess. I wondered about selling and investing in other stock.
 
hmmmm i think shareholders should hold out, it will increase again, PDN really want SMM, maybe they believe they could lose this court case, which means they lose their valuable foothold in australian uranium.

keep holding out guys we will almost get 1 for 1 IMO!
 
If you think that the already-defined uranium resources are only the tip of the iceberg of what's actually there, then SMM might be worth a lot more. Especially as it could probably be put into production relatively quickly given enough money, expertise and the political will. The mining infrastructure around Mount Isa is pretty good.
 

In the meantime it looks like PDN and SMM are not trading . 0 volume
 
Its a bit hard to tell when the market is dropping alongside it. Except for SMM of course!
Last time that PDN announced its bid there was a general fall in the market and to some extent may have contributed to the very low uptake of PDN's offer. Maybe its happening again?
 
Should I be getting concerned that SMM share price at $6ish, is closing in on PDN share price {which looks to be closing at around the $9.97 mark}??

I mean Paladin IS producing U..and SMM has what...Some Uranium in the ground in a state that COULD even reject uranium mining??

Im starting to consider my position too...for the first time ever
 

Yep "Go Nuke" not sure whats going on here but very interesting to watch.. Lets hope the swing is not to big.
 
Reaching For The Summit
FN Arena News - April 12 2007

By Greg Peel

There are two interesting points to note about the deal announced yesterday between French company Areva and local uranium resource owner Summit Resources (SMM): (1) Areva is not a uranium miner; (2) the price paid for a 9% stake implies a resource valuation for Summit's Valhalla/Skal project in excess of US$30/lb.

Yesterday Summit announced that Areva had agreed to subscribe for 9% of Summit at $6.20 per share, with an option to subscribe for a further 9% at $7.20 per share within 2-6 months. This averages to 18% at $6.75 or a 31% premium over Summit's closing price of April 5. This is a typical takeover premium.

Such a premium was also implicit in the earlier hostile takeover offer made for Summit by Paladin Resources (PDN). Implicit, as Paladin's bid offer was for a scrip exchange of one Paladin share for every 2.04 Summit shares. At yesterday's prices, this implies a value of $5.19 per share.

There seem to be two important observations for me from this:
(1) here is an energy company going to the source and 'buying' a share of its required resource. Is this a precursor for similar moves from other energy providors?
(2) it seems to view poorly the value of PDN's hostile takeover. The article went on to say that only 1% of Summit's shareholders have gone for the offer, to date.

PDN closed at $10.00 (down 3.5%) and SMM $6.00 (up 3.5%)
 

I think in the paperwork I received yesterday..it wasn't EVEN 1%
 
The other share Areva is involved in Aus is NTU - Northern Uranium. (NT/WA)That went through the roof as soon as Areva got associated with them around Feb, Mar.
 

As well as considering your position, i suggest you also consider market caps when comparing two companies.

Even if SMM and PDN share prices achieve parity in nominal terms, PDN market cap will still be more than double of SMMs.
 
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