ERA – UBS rates the stock as Sell

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March quarter production was ahead of UBS estimates. Grade was consistent with the December quarter at 0.1% but also ahead of the broker’s estimates.

The broker believes, on a five-year view, uranium industry fundamentals remain positive but the company’s stockpiles are likely to be exhausted by 2020 and its mining licence concludes in 2021.

Near-term catalysts are lacking and the broker believes uranium prices will languish in the mid US$20/lb in 2017, below marginal cost. Sell rating retained. Target rises to 8c from 6c.

Sector: Energy.

Target price is $0.08.Current Price is $0.69. Difference: ($0.61) – (brackets indicate current price is over target). If ERA meets the UBS target it will return approximately -762% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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