VMY – Morgans rates the stock as Add

By Broker News | More Articles by Broker News

The August 2020 update of the definitive feasibility study (DFS) for Vimy Resources’ wholly-owned Mulga Rock uranium project in Western Australia enhanced value further, according to Morgans. This is despite the broker using a lower long term contract uranium price of US$55/lb U308, previously US$60/lb.

The US$393m development is scheduled to produce 3.5mlbs per year U308 at an all-in sustaining cost of US$31.22/lb over the 15-year life from existing reserves, reports the broker. All primary approvals, including the Condition Environmental Management Plans are received.

Morgans believes another short-term catalyst could be the discovery of another high-grade deposit such as Angulari. The longer term valuation driver is considered to be the contract uranium price, with prices over US$50-60/lb expected to justify development of Mulga Rock.

The Add rating is unchanged and the target price is decreased to $0.17 from $0.38, due to increased issued capital.

Sector: Energy.

Target price is $0.17.Current Price is $0.03. Difference: $0.14 – (brackets indicate current price is over target). If VMY meets the Morgans target it will return approximately 82% (excluding dividends, fees and charges – negative figures indicate an expected loss).

Broker News

About Broker News

FNArena's Australian Broker Call, is your daily news report on the latest recommendation, valuation, forecast and opinions recently published by Stockbrokers.

View more articles by Broker News →