Morgans considers the wholly-owned Mulga Rock uranium project is robust though it requires long-term sales contracts. However, increased requests for expressions of interest from utilities is considered to imply that contract activity should stir in 2021.
Management anticipates that all approvals to commence site works will be in place by June 2021. 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.
Add rating and $0.17 target price are unchanged. Morgans highlights the spot uranium price has risen with major producers shutting production, much existing feedstock overhang removed and the current market in supply deficit.
Target price is $0.17.Current Price is $0.16. Difference: $0.01 – (brackets indicate current price is over target). If VMY meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges – negative figures indicate an expected loss).