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UR-Energy Inc. Message Board

  • rpat458 rpat458 Oct 27, 2013 10:36 AM Flag

    140Million Market Cap

    If I calculate correctly at 35.00 a lbs they would have to sell 4 million pounds of uranium to be valued at 2X sales. Based on that this stock is fully valued at these prices ($1.15). Even if Uranium prices go up to 55.00 they would need to sell 2.5 million pounds. I'm I missing something?

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    • My calculations are that urg has to pay 6.9 mil/yr. to cover the 34 mil. loan. If you assume production costs of $25/lb then @ 800klbs. and price of 35/lb that's 1.1mil profit. Then @ price of $1.15 pe=12.4. If production were 4mil. then pe=4.3. I don't think a stock price of $1.15 is any problem even if there is a low prod. of 800klbs./yr, in fact it should be higher. If my calculations are wrong I would appreciate a response. The last time I talked about math I got no response which leads me to think that most of the people on this board are just gamblers.

      • 3 Replies to tswright72
      • Not sure about your numbers. One big mistake was using 6.9mm against earnings. The loan produces about 2mm in interest expense annually. The remaining 5mm is payback of debt and NOT an expense. So, if you figure 8mm in profit before expense related to loan, you would still have 6mm profit.

        Taking 122.5mm shares outstanding, you get around .05 per share using a profit of $6mm. A PE of 20 only gets you to $1.00 per share on profits of 6mm. You forgot to factor in shares outstanding when you tried to determine your PE ratios.

        So, using your numbers above that I assume factor in operating overhead, you have a company that is a long way from seeing any price appreciation. Of course, I do not believe you used reasonable numbers for sales revenues per pound, cost per pound or company overhead. However, doing my own calculations on 800k lbs., my profit number came in at around 6mm which is heavily dependent on assumptions of $50/lb sales - $20/lb cogs - $16mm in overhead - $2mm in interest expense. I end up at the same $6mm and $1.00 PPS on PE of around $20.

        URG will really make money based on two things. One, increasing production above 1mm lbs. like maybe 1.2mm lbs. and improving margin to $40 or more per pound. At 1.2mm lbs., that would be $48mm in profit less overhead of maybe $20mm total resulting in $28mm in profit before taxes. A PE of 15 puts PPS at around $3.42 with 122.5mm shares outstanding.

        Thus, we need U prices to rise and URG to double initial expected production of around 600k lbs. The combination of both will put PPS above $3.

      • wright, You have it figured pretty good. Most people have an overly optimistic view of mines in production. Usually when they go into production is the time to sell. Why? Because the mines never seem to live up to investors expectations. Just the way the real world works. What we have here is a stock that will move once the price begins to move, until then, its a buck and change and nothing will change that. GLTA been long for years.

        Sentiment: Buy

      • LMFAO

 
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