Thread by @YellowLabLife

This is going to be fun...koala time to discuss Paladin

When the book is written on this cycle, the inability or outright refusal of investors to do basic math will reign supreme 1/n

AISC $31/lb before royalties (3% at $40 would be another $1.20)

~US$80MM of capex required to restart (PF cash for the raise ~US$30MM)

2/n

Looks like 7 years of 6MM lb and 10 years of ~3MM lb...so call it 75MM lb total LOM production

$31/lb AISC...use $40/lb, $1 royalty, that's $8/lb margin. Assume no taxes...$8 * 75MM is <US$600MM undiscounted FCF, $50/lb...3/n

would mean ~$2 royalty, so $18/lb margin...koala gets $1.35Bn undiscount FCF

Oh wait, Paladin only owns 75% of Langer Heinrich? Okay so $600MM becomes $450MM, and $1.35Bn becomes $1Bn...what's the market cap PF the raise? 4/n

Oh it says in the deck its market cap post raise will be ~US$1Bn. Will it be fully funded on restart capex? No, not even if we take the 75% figure.

But koala surely there is a price of uranium where this market cap of Paladin makes sense right? 5/n

Sure, if you disagree with the koala uranium views & think uranium will avg $60+ for 20 years, maybe Paladin valuation doesn't sound insane. But if you believe that, why not just own physical and take the superior risk/reward, no operational or jurisdiction risk and make 2x? 6/n

Anyways, there but for the grace of god goes the koala...I guess making money long term doesn't matter anymore in a world of YOLO, ESG thematics, and a view that you can always just sell the stock so why even think about long term fundamentals. 7/n

Or even just putting together a simple model based on the numbers in the very deck being used to market the equity offering.

Find the flaw in the koala's logic beyond the fact the koala is actually thinking...8/8