The typical #Commodity or #goldstock graph that tends to interest us if backed up with fundamentals, we would expect 1H 2023 this could bottom at 2c down 50% from current levels (-95%+ from cycle peak), offering 20x returns over the following 48 months.
For fundamentals we would like to see 4-7c of potential annual cashflow 3 years out to back our 20x return.
This is how to create wealth, deployment of capital near a cycle bottom can grow by 10-20x over the following 48 months.
Get in step and alignment with the upcoming cycle bottom - this is the best guidance we can give any investor
The highest beta is getting destroyed (-95%) through the peak of Fed rates and the USD, this potentially is a once in 15-20 year opportunity to make easy returns.
We are accummulating assets where home runs will be made on the next 20-50% falls.
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....
If you want to get your up and down #uranium cycle legs correct, this is probably more important than anyone else currently....as it dictates the market cycle.
What #uranium specialists lack knowledge on, that generalists are focused on.....
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.
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.