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Message: URANIUM Denison/Korea & List of all Uranium Producers/Share prices
http://www.mineweb.com/mineweb/view/...
The troubled uranium miner has scooped a deal with a big power utility, and raised fresh equity.
Author: Barry Sergeant
Posted: Wednesday , 15 Apr 2009
JOHANNESBURG -
The 18 March update from Denison Mines shocked investors in the company's stock, and possibly also the broader community of specialist investors who had been enthusiastically watching as the subsector continued to claw its way back.
That week in March Denison declined by up to 30%; the stock price at C$0.99 a share was 89% off its highs. The stock price closed on Tuesday this week at C$1.51, on highly encouraging news that Denison had raised C$75m in a direct placement with Korea Electric Power Corporation, or KEPCO, and a further C$20m by selling shares to entities associated with Denison chairman Lukas Lundin.
In addition, Denison and KEPCO have signed an offtake agreement to the effect that the power utility will buy between 510,000 and 690,000 pounds of uranium oxide a year from Denison from 2010 through 2015. The pricing will be on "industry standard" terms, implying that term prices, historically higher than spot prices, will be applied.
All this good news has hauled Denison out from investor punishment, for now at least. Upon raising C$47m in January this year, Denison forecast production of 2 to 2.4m pounds of uranium oxide this year; the latest guidance from March was slashed to 1.2 to 1.3m pounds for the year. Denison continued to shut in mines, most recently two of its five mines on the Colorado Plateau.
Denison Mines describes itself as "a diversified, growth-oriented, intermediate uranium producer. With seven active uranium mines in North America (six in the US and one in Canada), Denison estimates North American production at 3.6 to 6.0 million pounds of U3O8 by 2011".
So far this year Denison has been unable to sell uranium oxide at 95% of the term uranium price, as explicitly predicted by management in January, as US utilities have little uncovered demand in 2009-10. Worse still, Denison's capabilities as a reliable supplier were diminishing.
Denison looked increasingly likely to breach its debt covenants, viz., net debt to 3.5 times EBITDA (earnings before interest, tax, depreciation and amortisation). On 31 December 2008, Denison held cash of $3.2m and portfolio investments worth $10.7m. The company had by then drawn down $100m of a $125m revolving credit facility. Operating costs are $30-40/lb; uranium oxide sales at spot prices around $40.50/lb (down from around $55.00/lb in December) vs. the term price of $70/lb would provide negligible cashflow.
Denison stated in its fourth quarter 2008 update that it had started the process of selling certain assets, or looking for a strategic partner for the company. KEPCO may be that partner, of sorts, for now. Denison was also looking at the possibility of other debt and equity financings, if possible; now, two tranches of fresh equity have been sold. There is now some financial visibility for Denison.
By sealing a deal with KEPCO, Denison has been able to make some ground against the headwinds of running against the biggest names in uranium mining: Cameco, Rio Tinto (including ERA), Areva, KazAtomProm, TVEL, BHP Billiton, Navoi, and Uranium One, and also rising producers such as Paladin.
|
Selected uranium stocks |
|
|
||
|
Producers |
Stock |
From |
From |
Value |
|
|
price |
high* |
low* |
$bn |
|
C$21.96 |
-50.5% |
53.2% |
7.085 |
|
|
A$21.25 |
-14.8% |
127.3% |
2.921 |
|
|
A$3.49 |
-48.1% |
114.1% |
1.568 |
|
|
C$2.75 |
-46.9% |
358.3% |
1.062 |
|
|
C$1.51 |
-83.4% |
118.8% |
0.281 |
|
|
PriarGunsky |
$135.00 |
-77.7% |
35.0% |
0.236 |
|
Producer averages/total |
-53.6% |
134.5% |
13.153 |
|
|
Weighted averages |
|
-48.5% |
83.3% |
|
|
|
|
|
|
|
|
Developers & other |
|
|
|
|
|
C$6.45 |
-15.2% |
532.4% |
0.804 |
|
|
UEX |
C$0.93 |
-81.7% |
106.7% |
0.140 |
|
Uranium Part. |
C$6.76 |
-35.6% |
50.2% |
0.402 |
|
A$1.83 |
-38.6% |
37.6% |
0.544 |
|
|
C$1.89 |
-28.7% |
384.6% |
0.291 |
|
|
A$0.63 |
-62.4% |
121.1% |
0.124 |
|
|
A$1.05 |
-59.5% |
366.7% |
0.119 |
|
|
C$4.40 |
-42.4% |
120.0% |
0.282 |
|
|
C$2.40 |
-55.6% |
189.2% |
0.145 |
|
|
C$1.52 |
-64.2% |
166.7% |
0.084 |
|
|
A$2.38 |
-40.5% |
325.0% |
0.270 |
|
|
A$0.54 |
-65.2% |
74.2% |
0.046 |
|
|
A$0.16 |
-57.9% |
63.3% |
0.129 |
|
|
A$3.90 |
-28.0% |
420.0% |
0.628 |
|
|
C$1.16 |
-48.0% |
190.0% |
0.114 |
|
|
C$0.34 |
-82.1% |
109.4% |
0.020 |
|
|
C$0.77 |
-68.2% |
126.5% |
0.059 |
|
|
Thor Mining |
A$0.03 |
-83.9% |
123.1% |
0.004 |
|
Uranium Resources |
$0.59 |
-92.2% |
63.9% |
0.033 |
|
Uranerz |
C$0.86 |
-75.8% |
68.6% |
0.039 |
|
C$2.01 |
-54.3% |
95.1% |
0.142 |
|
|
A$0.10 |
-71.0% |
96.1% |
0.024 |
|
|
Marathon Resources |
A$0.52 |
-74.3% |
168.0% |
0.028 |
|
Nufcor Uranium |
₤1.60 |
-35.5% |
114.0% |
0.099 |
|
₤1.28 |
0.0% |
395.1% |
0.341 |
|
|
Eso Uranium |
C$0.06 |
-77.1% |
175.0% |
0.002 |
|
$0.63 |
-81.5% |
292.8% |
0.029 |
|
|
West Aust. Metals |
A$0.10 |
-71.0% |
96.1% |
0.024 |
|
Tournigan |
C$0.26 |
-74.5% |
92.6% |
0.026 |
|
A$0.29 |
-32.1% |
185.0% |
0.010 |
|
|
Vital Metals |
A$0.04 |
-95.1% |
0.0% |
0.003 |
|
Southern Uranium |
A$0.06 |
-66.7% |
77.4% |
0.005 |
|
Uranium Equities |
A$0.17 |
-43.1% |
230.0% |
0.023 |
|
Black Range Minerals |
A$0.04 |
-61.2% |
245.5% |
0.017 |
|
₤0.32 |
-33.9% |
234.2% |
0.049 |
|
|
C$0.33 |
-82.4% |
170.8% |
0.032 |
|
|
C$0.23 |
-81.1% |
48.4% |
0.017 |
|
|
Crosshair Exploration |
C$0.16 |
-84.3% |
82.4% |
0.014 |
|
A-CAP Resources |
A$0.24 |
-72.7% |
200.0% |
0.019 |
|
C$0.22 |
-86.6% |
158.8% |
0.008 |
|
|
Curnamona Energy |
A$0.44 |
-51.1% |
225.9% |
0.021 |
|
Coronation Minerals |
C$0.07 |
-81.4% |
160.0% |
0.006 |
|
Khan Resources |
C$0.44 |
-68.1% |
203.4% |
0.020 |
|
Bayswater Uranium |
C$0.09 |
-82.3% |
70.0% |
0.011 |
|
Energy Fuels |
C$0.26 |
-80.7% |
136.4% |
0.014 |
|
Azimut Exploration |
C$0.35 |
-90.5% |
84.2% |
0.005 |
|
Desert Energy |
A$0.06 |
-82.1% |
42.9% |
0.004 |
|
Pancontinental Uranium |
C$0.05 |
-90.0% |
11.1% |
0.002 |
|
Pepinnini Minerals |
A$0.25 |
-75.5% |
81.5% |
0.012 |
|
Nuinsco Resources |
C$0.04 |
-88.2% |
166.7% |
0.006 |
|
C$0.54 |
-59.7% |
440.0% |
0.024 |
|
|
Pitchstone Exploration |
C$0.19 |
-88.3% |
40.7% |
0.005 |
|
Canalaska Uranium |
C$0.11 |
-67.7% |
133.3% |
0.012 |
|
Uranium Power |
C$0.15 |
-72.7% |
114.3% |
0.012 |
|
Bitterroot Resources |
C$0.12 |
-88.9% |
33.3% |
0.006 |
|
Encounter Resources |
A$0.06 |
-84.5% |
24.0% |
0.003 |
|
C$0.10 |
-75.0% |
171.4% |
0.004 |
|
|
Magnum Uranium |
C$0.18 |
-72.3% |
157.1% |
0.004 |
|
Atomic Resources |
A$0.11 |
-64.5% |
54.9% |
0.005 |
|
Titan Uranium |
C$0.32 |
-60.0% |
190.9% |
0.014 |
|
Uranex |
A$0.25 |
-56.9% |
127.3% |
0.015 |
|
Red Hill Energy |
C$0.43 |
-55.7% |
115.0% |
0.017 |
|
C$0.11 |
-69.9% |
83.3% |
0.008 |
|
|
Crossland Uranium |
A$0.06 |
-71.4% |
50.0% |
0.005 |
|
Monaro Mining |
A$0.11 |
-82.5% |
69.2% |
0.007 |
|
Epsilon Energy |
A$0.06 |
-93.7% |
37.5% |
0.002 |
|
Eromanga Uranium |
A$0.07 |
-59.4% |
192.0% |
0.007 |
|
African Energy |
A$0.03 |
-89.3% |
220.0% |
0.004 |
|
Toro Energy |
A$0.17 |
-60.5% |
83.3% |
0.092 |
|
C$0.18 |
-45.3% |
775.0% |
0.018 |
|
|
Cash Minerals |
C$0.05 |
-84.8% |
150.0% |
0.005 |
|
Apollo Minerals |
A$0.14 |
-72.0% |
12.0% |
0.010 |
|
C$0.11 |
-77.2% |
320.0% |
0.008 |
|
|
Wealth Minerals |
C$0.24 |
-83.1% |
140.0% |
0.006 |
|
Santoy Resources |
C$0.10 |
-73.7% |
122.2% |
0.009 |
|
Uracan Resources |
C$0.20 |
-66.7% |
66.7% |
0.015 |
|
₤0.22 |
-13.7% |
486.7% |
0.018 |
|
|
C$0.05 |
-80.0% |
80.0% |
0.005 |
|
|
C$0.10 |
-72.1% |
171.4% |
0.006 |
|
|
Nortec Ventures |
C$0.18 |
-48.6% |
157.1% |
0.011 |
|
Int'l Enexco |
C$0.34 |
-73.2% |
67.5% |
0.005 |
|
U3O8 Corp. |
C$0.40 |
-56.5% |
135.3% |
0.008 |
|
Silver Spruce |
C$0.09 |
-82.7% |
70.0% |
0.003 |
|
Triex Minerals |
C$0.16 |
-90.1% |
6.7% |
0.003 |
|
Rum Jungle Uranium |
A$0.05 |
-75.0% |
38.9% |
0.005 |
|
C$0.10 |
-72.9% |
280.0% |
0.004 |
|
|
C$0.14 |
-85.0% |
22.7% |
0.003 |
|
|
Universal Uranium |
C$0.05 |
-89.4% |
150.0% |
0.002 |
|
Oklo Uranium |
A$0.06 |
-51.7% |
132.0% |
0.004 |
|
Hawk Uranium |
C$0.04 |
-84.0% |
100.0% |
0.002 |
|
C$0.25 |
-50.0% |
150.0% |
0.007 |
|
|
Great Australian |
A$0.03 |
-81.8% |
50.0% |
0.003 |
|
C$0.44 |
-69.0% |
95.6% |
0.017 |
|
|
C$0.12 |
-69.2% |
300.0% |
0.004 |
|
|
Aura Energy |
A$0.13 |
-60.6% |
56.6% |
0.008 |
|
Empire Resources |
A$0.07 |
-68.9% |
250.0% |
0.004 |
|
Northern Continental |
C$0.10 |
-64.8% |
58.3% |
0.004 |
|
Int'l Montoro |
C$0.04 |
-80.0% |
60.0% |
0.001 |
|
C$0.10 |
-75.0% |
400.0% |
0.002 |
|
|
C$0.12 |
-73.3% |
33.3% |
0.066 |
|
|
C$0.46 |
-73.3% |
283.3% |
0.043 |
|
|
A$0.04 |
-61.2% |
245.5% |
0.022 |
|
|
C$2.86 |
-51.9% |
84.5% |
0.002 |
|
|
C$0.10 |
-62.0% |
280.0% |
0.005 |
|
|
C$0.06 |
-77.1% |
175.0% |
0.001 |
|
|
C$0.06 |
-78.0% |
120.0% |
0.001 |
|
|
A$0.09 |
-44.8% |
139.5% |
0.029 |
|
|
A$0.05 |
-62.5% |
114.3% |
0.020 |
|
|
A$0.40 |
-21.6% |
105.1% |
0.037 |
|
|
C$0.08 |
-88.5% |
50.0% |
0.007 |
|
|
Developer averages/total |
-66.3% |
151.8% |
5.965 |
|
|
Weighted averages |
|
-53.9% |
158.9% |
|
|
Overall averages/total |
|
-65.0% |
150.6% |
18.882 |
|
Overall weighted averages |
-49.5% |
102.9% |
|
|
|
|
|
|
|
|
|
Diversifieds with uranium |
|
|
|
|
|
€343.23 |
-58.1% |
13.1% |
16.117 |
|
|
₤24.40 |
-66.0% |
145.2% |
52.633 |
|
|
₤14.35 |
-34.9% |
96.2% |
128.489 |
|
|
$31.55 |
-19.4% |
136.0% |
11.174 |
|
|
C$2.05 |
-60.2% |
169.7% |
1.006 |
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