BLR 0.00% 0.2¢ black range minerals limited

the good bad and the ugly

  1. 5,391 Posts.
    Lots of talk here as to who is right ....read below to give you more insight into the companies projects

    A great article to show the potential of BLR and that the BOYER deposit DOES show high grade zones running 1200 PPM so for those who continue to banter and talk this stock down, you may just miss out on the big move in BLR this year.....im picking BLR will be re rated once the scoping studies are revealed and also the best type of mining strategy exposed o the investment community.....Price of Uranium will not stay down for too long and I expect an average price of $95/lb for 2008....purely based on the supply demand ratio........Enjoy reading the article below as it gives a few clues as to how significant BLR,S results are to date..........cheers Jam

    The Uranium Sector in Perspective
    Everyone seems to have forgotten the uranium
    sector for the time being. Maybe there is a belief
    that the speculative bubble has burst and the easy
    money has gone. Certainly the hot money has
    gone ? that money which chases the sizzle rather
    than the sausage ? but the smart money should be
    out there picking up fundamental value.
    The uranium price, at greater than US$90/lb,
    offers stunning levels of profitability for those
    able to deliver yellowcake to the market.
    Rewards will go to those who recognise this and
    take positions. Go for the front-runners who have
    resources and a reasonable chance of production
    within 2-4 years.
    USA is a Preferred Country
    The USA uranium production industry is only a
    shadow of its former self. Many mines have shut
    down in times of lower prices but there are plenty
    of orebodies in States such as Colorado, Nevada,
    New Mexico and Wyoming. Good geological
    records exist that have enabled rapid calculation
    of JORC resources. There are quite a few
    projects in the hands of Australian companies
    that offer potential for production levels of 200-
    600 tpa of U3O8, at cash costs of US$25-$35/lb.
    Three companies that come to mind are Black
    Range, Peninsular, Uranium King (currently
    merging with Monaro Mining) and Wild Horse
    Energy.
    Permitting on mines may be a bit slower in the
    USA than in some of the more exotic countries
    around the world, with a two year time frame
    generally accepted as the standard for a mine.
    Permitting for a mill or an ISL mine is thought to
    be more complicated and time consuming, but
    there is no logical reason for this. The USA
    probably still suffers from the same paranoia and
    the misinformation that has paralysed the
    uranium sector in most of Australia.
    Political Processes Will Intervene
    The world is facing a critical energy shortage.
    Blind Freddy can see that nuclear power is the
    answer to the power shortage and the future of
    clean energy and global warming. The
    strategically critical value of uranium has already
    been identified by Russians as they seek to build
    on their power in the energy sector based on oil
    and gas. The Chinese are scouring the world for
    uranium resources. The USA is going to be
    forced to go head-to-head if it is not going to be
    at the mercy of imports, just as it is with oil. It
    will be forced to reduce the number of
    bureaucratic obstacles to the development of
    mines and processing plants.
    Black Range Is Well Positioned
    BLR has done well over the past year, growing
    from a small uranium position with uncertain
    economics to be in a position where we can
    reasonably predict that it will be able to earn very
    strong profits. When we first looked at it we
    thought it was overpriced in the market. At its
    high of 34? it had a market capitalisation of
    about $250m. At the current price of 13.5?, the
    capitalisation is $81m (but $90m on dilution for
    options). Is it good value though?
    Taylor Ranch Uranium Project - Upgrade
    On 29/11/07, BLR announced a global resource
    of 36,000 t U3O8 at a grade of 270 ppm. Given
    the nature of the orebodies, flat-lying sandstone
    structures often at depths of 200m, this is of
    academic interest only.
    However, there are obvious high grade zones
    running 1,200 ppm containing approximately
    10,000 t U3O8. This represents a serious 131%
    increase in the high grade section. Much of this
    comes from the Boyer deposit to the SE of the
    original orebodies at Taylor Ranch. This now
    accounts for approximately half of the high grade
    material (inferred).
    There is still a considerable amount of drilling to
    be done as the drill spacing at Boyer is wide at
    100 to 250m spacing, whilst at Taylor and Noah
    it is 30m and 100m respectively, but there seems
    to be good continuity so far.

    BLR started drilling in April 2007, and has had
    four rigs operating since then to complete 65
    holes for 25,000m.
    Project Economic Look Good
    Although a scoping study wont be ready for 2-3
    months, it doesn?t take a rocket scientist to work
    out some order of magnitude numbers. We have
    been helped by the extrapolation of the numbers
    from the Rio Puerco mine belonging to Uranium
    King, which as a fully developed, room and pillar
    underground mine awaiting recommissioning in
    New Mexico.
    BLR believes it is looking at a room and pillar
    mine that will be accessed via either a shaft or a
    decline. Back in the late 1970s, Kerr McGhee
    spent US$17m developing a 500,000 tpa mine at
    Rio Puerco. It would be reasonable to assume
    that a similar size mine would cost BLR twice
    this amount i.e. $35m.
    There may be the opportunity for BLR to truck
    the ore 30 km to the 500,000 tpa acid leach plant
    owned by Cotter Corporation, which was
    operating up until 20 months ago, at which time
    it closed down due to the need for modification
    to handle high vanadium values in the uranium
    ore. If it could use this mill, on a toll payment
    basis, it may be the key to fast tracking
    production i.e. inside of three years.
    If it trucked high grade ore of 1,200 ppm, and
    achieved recoveries of 90%, it could produce a
    tad over 500 tpa U3O8. A reasonable cash
    operating figure of US$35/lb is possible provided
    the owners of the mill play ball.
    At US$90/lb, it could be generating a cash profit
    margin of 157% or US$55/lb. Annual cash
    generation could be $70m p.a. or 11.6? a share
    (pre-dilution for options or financing). This is
    certainly very impressive.
    The Bottom Line
    There is obviously more work required to firmup
    numbers, but we know enough now to say that
    the numbers are cheap. There is nothing that
    suggests that additional information will do
    anything other than improve the scenario. A
    balanced uranium portfolio should really have
    some BLR share in it, and shareholders should be
    prepared to sit and watch the company grow from
    here.
    The cash position is approximately $14m.
    Far East Capital was sufficiently impressed with
    the prospects for the company that it acquired a
    modest holding in anticipation of a re-rating.

 
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