Ranger 3 Deeps will not proceed to final feasibility in the current environment. The company’s decision is based on the lack of progress in the uranium market and the economics, which require operation beyond the current mining lease that expires in 2021.
UBS has lowered the probability of the underground proceeding to 20% from 50%. The broker makes no changes to earnings estimates.
Provided uranium price forecasts are achieved the broker envisages no need for additional funding to rehabilitate Ranger, should the underground be shelved indefinitely.
Rating is downgraded to Sell from Neutral. Target is lowered to 70c from $1.45.
Target price is $0.70.Current Price is $0.67. Difference: $0.03 – (brackets indicate current price is over target). If ERA meets the UBS target it will return approximately 4% (excluding dividends, fees and charges – negative figures indicate an expected loss).