AI
Thursday, September 26, 2019 2:30:23 PM
Just listened again to the Crux Investor interview of UEX's CEO Roger Lemaitre at WNA Symposium.
UEX profiles itself as a portfolio play, not a single project play.
Quotes from the interview:
- "... We're following up hot leads that would be flagship type projects for most of our peer companies..."
- "... We sit on opportunities like that on 4-5 other projects"
Now my question is how an investor should value this approach? Is there value to it and is it a smart strategy?
Is there a way where UEX can benefit from a "portfolio management style of business" in which some of their exploration projects could be positioned into the market as a "Flagship project" for a possible joint venture (JV) partner?
If my information is correct UEX already applies this principle on at least 1 JV project?! Anyone of my fellow investors who know our JV partner + the status of that exploration project?
I know that in a JV, the partner can earn up to x% of the project. However before being able to "earn" the %, the JV partner should invest a number of CAD $ to effectively explore the project. That would be CAD $ that UEX doesn't have to invest themselves. Positive exploration results would mean an increase in resources. Although not all resources would be added to the UEX resource number but at the end it would be an increase (which in the end makes UEX more valuable).
Applying this principle would add uranium resources at a low cost/risk for UEX. Off course, I would hope UEX management to be business savy enough to carefully select the (under explored) as first opportunities to share with JV partners. Offset (higher) risk projects to other partners and in the meantime grow its own core resources to a higher level. To enable that some CAD $ from the JV's could be allocates
Maybe in the current Market the above principle might be wishful thinking, however in an emerging bull market I would expect a movement where new uranium exploration companies would pop up like mushrooms from under the ground. I've read that in the previous bull market there were something like 400-500 uranium companies or so.
Anyway, I would like to understand your thoughts and insights on this subject.
GLTA
UEX profiles itself as a portfolio play, not a single project play.
Quotes from the interview:
- "... We're following up hot leads that would be flagship type projects for most of our peer companies..."
- "... We sit on opportunities like that on 4-5 other projects"
Now my question is how an investor should value this approach? Is there value to it and is it a smart strategy?
Is there a way where UEX can benefit from a "portfolio management style of business" in which some of their exploration projects could be positioned into the market as a "Flagship project" for a possible joint venture (JV) partner?
If my information is correct UEX already applies this principle on at least 1 JV project?! Anyone of my fellow investors who know our JV partner + the status of that exploration project?
I know that in a JV, the partner can earn up to x% of the project. However before being able to "earn" the %, the JV partner should invest a number of CAD $ to effectively explore the project. That would be CAD $ that UEX doesn't have to invest themselves. Positive exploration results would mean an increase in resources. Although not all resources would be added to the UEX resource number but at the end it would be an increase (which in the end makes UEX more valuable).
Applying this principle would add uranium resources at a low cost/risk for UEX. Off course, I would hope UEX management to be business savy enough to carefully select the (under explored) as first opportunities to share with JV partners. Offset (higher) risk projects to other partners and in the meantime grow its own core resources to a higher level. To enable that some CAD $ from the JV's could be allocates
Maybe in the current Market the above principle might be wishful thinking, however in an emerging bull market I would expect a movement where new uranium exploration companies would pop up like mushrooms from under the ground. I've read that in the previous bull market there were something like 400-500 uranium companies or so.
Anyway, I would like to understand your thoughts and insights on this subject.
GLTA
Join the InvestorsHub Community
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
