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@BULLReturns

Sep 24

#commodities #uranium

To get in alignment with the incoming bottom, likely 1H 2023 (the pivot on monetary tightening and peak USD), several spots will decline by 30% & high beta related equities by up to 60%. Be prudent in ones scale in, we are using future return as a guide.

History indicates 90-95% stock decliners within #commodity sectors often offer interesting recovery returns of 15-20x (all being even), expect this to play out in many cases through 1H 2023.

Where are our bids?
A) where we can obverse Cap/CF <0.5x 3 yrs out
B) Cap < 5% of NPVs

How to use future returns as a scale in guide?

For us we are looking for 8x plus returns over 48 months, so to achieve this an ideal buy in is <5% of NPV and/or <0.5x Cap/CF 3yrs out

These often present themselves near cycle bottoms....

#commodities
#cyclicals
#investing101

Read 6 tweets

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@BULLReturns

Sep 23

$AHQ bid at 10.5c was hit this morning, multiple lower bids remain, outcome vision:
21c Dec 2022 +100%....overhang depleted + implementation of optimization plan
31.5c 2Q 2023 +200%....1Q results showing positive trend
42c 4Q 2023 +300%....3Q results indicate $25m cf run rate

Based on the above projectory, valuations are as follows:

2023 Cap/CF 0.7x

2024 Cap/CF 0.6x

2025 Cap/CF 0.5x

2024 Cap/CF 0.4x

Assumptions: falling spots offset by rising volumes

Often when short term expectations have been destroyed, like with $AHQ, the pendulum shifts to the far side of only negative outcomes.

Perhaps review the Tenas DFS and where the project sits on the cost curve and the capex start up, likely a project many wished they had.

#coal

Read 4 tweets

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@BULLReturns

Sep 21

https://twitter.com/antonioatanasv/status/1572560210551795712

Material up legs are scale down opportunities #uranium

https://twitter.com/antonioatanasv/status/1572560210551795712

Material down legs (-65% plus) are scale in opportunities (excluding the cycle top).

Demand is increasing by say 3% per year, supply can turn on 10-20% in 2024-2026 assuming $65 plus sustained spot.

$85 likely +15-25% supply

$105 likely +20-30% supply

#uranium

In most #commodity markets supply is stimulated materially over 9-18 months at 65% plus cash margins.

For #uranium we see this to be no different, using sub $35/lb cash costs for compelling projects, over $100/Ib will stimulate a massive wave of fundable projects within 24m.

Read 4 tweets

Cycle Bottom

@BULLReturns

Sep 18

https://twitter.com/dyllan_berg/status/1571416628889370624

Understanding con note conversion overhang is key to understanding the picture. Also optimization of a start up isn't an overnight affair, 6 months for mitigation of labour and machine maintenance. $AHQ

$50m buys 4 potential mines, Over 2bn NPV and 1bn/t resource.

https://twitter.com/dyllan_berg/status/1571416628889370624

It's the sitting that matters in turnarounds, not exiting post the horse bolting -80%.....

This has potential as an M&A target.

$AHQ
#coal

Smart money uses the con note selling as the mechanism to accummulate cheaply.

Stupid money exits post -80% decline

Smart money reviews the thesis and assesses the turnaround ability and future cashflow post optimization

2023 CF +A$50-100m Vs 50m cap

Plenty of buyers at 11c.

Read 4 tweets

Cycle Bottom

@BULLReturns

Sep 17

$GMTN heading towards negative EV

1m oz resource at high grade with positive drilling results

65koz low capex production ramp up, NPV 10x cap and expanding

Optimization issues on start up

Accummulation zone incoming 8-18c, below <12c 10x return potential

#goldstocks

It's starting to tick the boxes
A) negative EV
B) free pounds in the ground
C) low capex ramp up
D) nice grade
E) 10x plus NPV upside
F) hated by the market
G) optimization could kick in 3-6 months time
H) cycle bottoming incoming over 4-9 months
I) low dilution risk Vs M&A

Please note any new bottoming theme over the next 3 to 9 months, one should have 5 candidates to mitigate stock specific risk.

If our #gold watchlist falls by 50% from here as the bottoming process kicks in, the average return will likely be 10-15x over the following 3-5 years.

Read 7 tweets

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@BULLReturns

Sep 15

Did you know where the potentially largest #uranium mines are in the world? Do you know the company that has the most upside in Sweden reinstating uranium mining? $AEE

This scoping study level project has a sub $20/lb AISC given the huge credits from Nickel, Molybdenum and V.

Reality check:

Low grade #uranium mines with massive secondary credits = low AISC outcomes

The option value of the Swedish assets to be built into $AEE's stockprice for $5-8 of NPV is 10-20c over the next 1-5 months.

You have been warned $AEE

$URNM entry coupled with #uranium Mining ban removal = satisfactory result

Read 6 tweets

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