Responses in red.
Firstly, thanks for your post and discussion. This board gets awfully lonely at times. Here is my input to your questions. They are my views only and everyone should do their own DD before investing or selling. I hope that others can contribute too.
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?
Basically it depends on the 'investor'. That being said, the 'market' will likely only add it as a value added statement if there are substantial drill results for any of the components in the 'portfolio' of assets.
For example: I believe that Hidden Bay has tremendous potential which is why I encourage Roger to drill a hole or two into the basement. With Hidden Bay being what it is, if the company was to hit a long or high grade interval at the Hidden Bay asset, then the speculative economics could certainly give the stock a big boost because of the already shallow find at Hidden Bay that could be used to fund the development of such a project.
"The Project hosts the shallowest undeveloped uranium deposit in the Athabasca Basin, the West Bear Uranium Deposit."
As for the strategy, in my view, it would not be a good strategy to go gangbusters on multiple assets at one time. I think most would agree with that. That said, it certainly is imperative to keep investors informed of those assets. UEX has a map of those assets but the last time I accessed that map many pointers brought me back to Hidden Bay details. That is not a good thing. It does not take much to add a page to each asset and a paragraph or two as to why that asset is an asset.
It is important of course to manage investors expectations. There is no need to oversell any asset. Good drill results are what should sell an average investor without a degree in geology.
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?
Firstly, UEX already has a portfolio from its staking or acquisition activities. If you are asking should they find JV for all of them, I would say - NO. It could be for some but it could be a giveaway if one of them turns out to be the biggest find in the world.
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?
They have several partners, Orano, ALX, JCU. The UEX website has information on the status of each of those projects. Shea, Christie Lake, others...
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 smile
Agree. I believe this is what I stated in one of my earlier responses. Did not mean to be repetitive - great minds think alike I guess. LOL
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.
I would hope that UEX can build up Christie Lake or Hidden Bay before farming out any other potential projects. Current prices are just too low for any more JV's in my view.
GLTA
