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Comments on this blog should never be taken as investment advice


Posts on this website are general "tips" and nothing more than that and should never be used to make an investment or trading decision. All information should be carefully cross-checked against official sources for accuracy. Sparty's posts nearly always relate to companies that he either holds, has held or intends to hold.

Main ForumASX listed Uranium plays by Resource Size updated

  • asx-uranium-resources-top-10.gif

    There has been a fair amount of movement. One of the bigger surprises is one of our very small ($24m) by market cap companies moving into second position below BHP. This could be one of the world’s cheapest very large resources, in terms of market cap to resource size. It certainly is in an interesting position in regard to our ASX plays.

  • ERA and PDN are loosing money. A better word would be haemorrhaging money.

    PDN stated that the Fucashima incident rocked their production and so their earnings. What Rot. PDN has never ... NEVER ... been earnings positive. It is a failed business.

    Sparty is promoting AEE. This is a resource that has issues.

    Happy Trading Alite

  • Hi Alite the chart represents the known resources of the ASX uranium plays.

    I am not promoting AEE - what I have been doing is consistent with my view that before investing people should know which companies have what and then knowing what the market cap is can help people decide whether a company is worth a further look. On that basis AEE is one of Australia's largest and cheapest and after having a fairly good look at them (AEE) I have put some funds in.

    ERA is in a troubling situation and I am worried about their forward sales not being covered - the same most likely applies to PDN.

    The chart below shows
    the world's top 10 undeveloped uranium resources by size.
    aee-resources-1023x752.jpg

    As regards the Haggan Alum Shale's mineralogy/processing you would be aware that a comparable project in Finland has produced 0.8mlbs per annum from a 17ppm U3O8 ore body that is similar to AEE's 160ppm ore body. (With the co-credits nickel, zinc and molybdenum the equivalent uranium grade is ~280ppm)

    You will also have seen that AEE's second phase bio-heap leaching has been quite successful with 90% uranium recovery, 90% zinc, 55% nickel and 45% molybdenum. The chemistry of the bio-leach process in itself is very interesting and well worth a read

    AEE also have a large land position (11,00km2) in Mauritania and have published a Jorc compliant resource of 50 Mlbs of uranium at average grade of 330ppm U3O8.

    Finally the recently published scoping study results are summarised below:
    Häggån Project Scoping Study


    Aura Energy has announced a major milestone by validating economic viability of its giant Häggån uranium deposit in central Sweden with excellent results from a scoping study. These results give the green light for Aura to move into pre-feasibility in 2012.

    Aura’s news is timely after several uranium announcements including China Guangdong Nuclear Power Corp declaring its offer for Kalahari Minerals and readying itself for a takeover bid for huge uranium mine owner Extract Resources. Canada’s Cameco Corp has also announced plans to double its uranium production to 40 million pounds a year by 2018 to accommodate extra demand from China and India.


    Following are some key highlights from Aura’s scoping study:

    • Net Present Value (NPV) - US$1,090M (pre-tax, 10% discount rate)
    • Internal Rate of Return (IRR) 47%
    • Total life of mine capital costs of US$769 million, including sustaining capital

    • Payback in approximately 4.3 years, or less than a fifth of current project life
    • Operating costs of US$36/lb uranium net of by-products
    • Initial pit shells contain >741 million tonnes of mineralisation, with much of the Project undrilled
    • Nominal 30 Mtpa operation with a 25 year initial mine life
    • Low mining costs with strip ration of 0.75:1
    • Target initial production of 6.6 Mlbs (2995t) uranium, 14.8 Mlbs nickel and 3.6 Mlbs molybdenum
    • Uses low risk bio-heap leach technology used extensively in the copper industry in Chile


    Aura has the largest uranium resources of any ASX-listed uranium company, exceeding even ERA (619Mlbs) and Paladin Energy (503Mlbs); only BHP Billiton and Rio Tinto have larger uranium resources. A project of the dimensions defined in the scoping study would be in the top 10 uranium producing operations in the world, and in the lower part of the cost curve. Read more

    Alite could you detail why you think that "This is a resource that has issues. "?

  • Hi Sparty, Excellent further info.

    I probably have a minor prejudice against the use of Uranium in general. The “resource” that I was referring to was the element Uranium. I should have said that the element to be mined has issues, not the AEE resource. Of the issues not least of which are prejudices like mine. My wife also says she is not sure she would be comfortable making money from Uranium shares. I know it can be done safely under normal and even many abnormal situations, but it still worries me.

    The second issue is that current producers like PDN and ERA are loosing money. ERA should be a very low cost miner due to their high grade, large resource and likely equipment depreciated status and yet they produced a loss. What am I missing in terms of ERA?

    Sparty, while you may not be promoting AEE, you are talking them up; which is your prerogative as it is your Blog. Knowing you I am certain that you are doing so as you believe in AEE’s future. The projected operating cost you stated of US$36/lb after credits from the Ni, Zn and Mb makes the project compelling. If the spot price increases from US$52/lb to 70+ (prices were well above this a few years ago), and stays there (no more “accidents”), then AEE’s market capital will likely skyrocket from 25mill into a billion (after capital raisings). The numbers are certainly good.

    I’m conflicted: I know that nuclear power produces no CO2; which may be the pollutant that kills more people than any other through increased sea levels - more specifically storm surges. I know that nuclear power can be run safely under normal and even extreme conditions. The problem that I have is that the reaction cannot be turned off. Once going it can only be controlled with cooling, and if that cooling is taken away via extraordinary events (an a-typical earthquake, a massive solar flair event, returning space junk... who knows) then the reaction could get out of control.

    I think that I have talked myself out of making money from uranium reactors. If Thorium reactors were in service then I may reconsider. Thorium based nuclear reactors could conceivably be turned off manually or set to turn off if not kept going.

    While Uranium shares are not for me I understand that others will have a different opinion. I’ll limit my posts on this topic from here on in.

    Alite

  • No don't limit anything... go flat out!

    Have you seen Australian Uranium it makes investing in the space somewhat easier.

  • Yes have seen that info... you do a great job.

    It does not change the fact that Uranium based reactors cannot be turned off when unusual events happen. Uranium reactors get out of control and melt down every time the manufacturing specifications of the the plant are exceeded. It is not worth the risk, especially when an alternative is at hand. A Thorium based reactor can be turned off with the flick of a switch or designed to self turn off. In the 1950's the USA had the choice to go for a Thorium based reactor or a Uranium based reactor. The USA chose the uranium based reactors as it produced a byproduct that could produce bombs. Uranium is a bad choice for producing energy but a good choice for producing bombs. If you want energy: Thorium produces more energy per kg, is more prevalent in the earths crust, and does not produce a weapon-isable byproduct... though I'm sure there bad guys can find a way to make a bomb.

    Uranium may be the easy option to reduce CO2 emissions but Thorium based reactors are clearly much better.

    Alite

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