Disculpa Emérito ¿Cómo es posible que las mineras sean un negocio horrible, pero derechos y royalties sobre las mismas sean un buen negocio? Si las mineras van mal, siendo el subyacente de esos derechos, entiendo que los derechos también irán mal, ¿me equivoco? Gracias anticipadas.
Disclaimer: Long SSL.
Pues se ve que se ve que no lo actualizaron, porque segun veo se disparo el jueves, deberia estar en 0% el viernes. Creo que solo ponen el precio de cierre. Parece que suele pasar que este varios dias cotizando al mismo precio, al poner el grafico en 3 meses ha ocurrido en varias ocasiones.
Esa tesis creo que ya la comentamos de pasada aquí. El CEO de esa empresa es un crack. Pero no le ha ido muy bien con las últimas inversiónes creo, de las que no han sacado beneficios.
Estas empresas son prestamistas sin ser un banco y no tienen los quebraderos de cabeza de las mineras. Es decir no tienen que explorar ni producir. Prestan el dinero a las mineras y cobran o bien de una parte del oro extraído o de una parte de los beneficios. Tienen menos peligros que la minera pero igualmente necesitan en definitiva que a la minera a la que prestan le vaya bien.
hombre, negocio horrible....son empresas cíclicas. Y hay que saber seleccionar la minera. De todas formas, veo mucho más seguro invertir ahora en buenas mineras de uranio con el ciclo apunto de subir (margin of safety), que invertir en Facebook u otras tecnológicas (Microsoft, Amazon), después más de 9 años de bull market, los growth&tech stocks dopadísmos por los QE, los tipos de interés a punto de subir, y si viene un crash te comes una galleta como en el tech-crash del 2000 cuando Microsoft cayó en un día $80bn market cap, Intel sobre $90bn.
Es que Facebook cayó el otro día por $123bn, vamos una caída mayor que la market cap de Siemens o Goldman Sachs o Airbus o BNP Paribas o el stock market de Argentina entera.
Cuando veo a tantas values españolas metiéndose en tecnológicas (Andromeda Value me parece que se ha metido en Amazon y Microsoft), a estas alturas del ciclo (que igual dura 2-3 años más, eh!), me viene a la mente la frase de Howard Marks, advirtiéndonos de gente cuando dicen: "Es que esta vez es diferente. El ciclo es cosa del pasado".
Dentro de 3-4 años ya será el juez tiempo que dará o quitará razones.
Así lo veo yo, y estoy largo en SSL. Si las mineras van mal, sus prestamistas también. Saludos.
Totalmente de acuerdo. Y además que los de andromeda se llamen value no lo entiendo. El per medio de su cartera esta a 35. Ahora le ponen la palabra alue a todo para captar...
Esta de moda decir que eres value. Abrí un hilo al respecto
https://www.rankia.com/foros/fondos-inversion/temas/3857812-moda-value-hispano
Desde 2014 han salido en España al menos 27 gestores Value nuevas o spin-off de gestoras anteriores, mas 5 fondos de fondos.
Y no todos los que dicen ser Value lo son.
Yo tampoco llamaría value a los que tienen elevado % en derivados para cobertura índices, caso de Algar, Avantage o Dunas, p.ej.
Buenos días, he encontrado una entrevista muy interesante a mi parecer. Al estilo Piter Lynch cuando encuentras una empresa que te gusta, pregúntale al CEO que empresa de la competencia le gusta.
En este caso es una entrevista al minero jefe (retirado) de Cameco y explica por qué está largo en Next Gen.
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Cameco’s former chief mine engineer on why he’s long NexGen
CEO.CA | Nov. 27, 2015, 2:11 AM |
McArthur River prior to entering production around 1998. Doug Beattie is pictured at the front.
McArthur River prior to entering production around 1998. Doug Beattie is pictured at the front.
Canada’s Athabasca Basin is arguably the best place to look for uranium in the world, and it’s the backyard of Cameco, the world’s largest producer.
A few small exploration companies have been able to find and delineate uranium deposits there and make money for shareholders by selling them to majors such as Cameco.
CEO.CA has covered some of the leading successes in the region of the last five years, including Hathor Exploration, Alpha Minerals, Fission Uranium and lately, NexGen Energy.
We wanted to get a better handle on the situation from a man who was involved in designing and building the richest and most complex uranium mine, McArthur River. Doug Beattie is a former Chief Mine Engineer at Cameco. Mr. Beattie very generously agreed to answer a few questions from the CEO.CA community.
Here’s a bio of Doug from the Canadian Nuclear Society in 2003, the year he won theirInnovative Achievement Award for his work at Cameco.
Doug Beattie was the lead engineer in the conceptualization, design, and successful implementation of the innovative mining method in use at the McArthur River uranium mine in northern Saskatchewan. The ore bodies, located at a depth of 500 to 620 m below the surface, have a very high uranium concentration of above 20%, approximately 200 times that of the Elliot Lake mines. The health hazard associated with mining high-grade ore required the development of a remote method. This was further complicated by the porosity of the surrounding fractured sandstone rock, which is subject to groundwater flow. The chosen solution was to freeze the ground in the area of the ore to be mined, develop tunnels above and below the ore body, and then remove the ore by a remote raise-boring technique. The two techniques, freezing and raise-boring, had been used previously for other purposes, but had never before been used in combination for production mining. Doug Beattie graduated in mining engineering at Queen’s University. After working as a mining engineer in Saskatchewan and Australia, he joined Cameco Corporation in 1993 as Senior Mining Engineer at the McArthur River exploration project. He later became Engineering Superintendent during the construction phase, and Mine Superintendent during the ramp-up to full production. He is currently the Corporate Chief Mine Engineer at Cameco’s Head Office. Doug Beattie is receiving this award for his leadership in the conceptualization and implementation of this new mining method.
CEO.CA: Mr. Beattie, thank you for agreeing to this interview. When you worked for Cameco, you travelled the world evaluating uranium projects. Where does NexGen’s Arrow rank amongst the undeveloped projects in the world today?
I would put Arrow firmly in the top five of undeveloped projects worldwide. There have been very few uranium discoveries in the past 10 years. Finds in the Basin and at 4 Mile in South Australia are the only ones of significance that come to mind.
During the last uranium price boom in the late 2000’s, almost all projects assessed were known deposits from the 1970s and ‘80s. Many of these deposits had been mined at one time and many others failed previously to pass economic hurdles and did so once again. A bunch of mediocre deposits were given a fresh coat of paint but ultimately the owners took multi-billion-dollar write downs on them cumulatively.
How large do you think Arrow is now and how large do you think it can grow to?
Firstly, I want to point out that I am a mining engineer and not a geologist but I am comfortable with some of the current estimates made by others that are in the range of 150 million pounds U3O8. As Zone 2 at McArthur River demonstrated, it does not take much strike length of ore to build pounds in a hurry.
I think the point of the surface exploration exercise is to get sufficient comfort that a decent production schedule, hence cash flow model, can be put together for the first 10 to 15 years of mining and then to concentrate on finding additional mineralization to flesh out the production schedule beyond that once underground. Surface drilling does not need to find every pound, it just needs to point you in the right direction.
At McArthur River, we committed to going underground in late 1992 with the understanding that we had a resource of 260 million pounds U3O8. This was sufficient to justify the capital to go take a closer look. I believe that the total mined to date plus still in the reserve column now totals over 600 million pounds U3O8. Under no circumstances am I implying that this will be the outcome at Arrow, I just want to point out that at some point you need to plan to get underground and not worry about putting more pounds in the inferred resource column from surface.
Eagle Point is a similar case. The ore zones currently being mined were all defined by underground drilling after surface drilling indicated that there may be something of interest in the area.
What do you think is the adequate drill spacing for inferred resources?
That is best left to the exploration geologists to answer.
How long do you think it would take to permit, then build Arrow?
My understanding of the current regulatory requirements is that it will likely take 4-5 years to get the necessary permits once an initial resource is declared. A pre-feasibility study is necessary in order to understand the project parameters in order to then submit a Technical Proposal to the government. The EIS and feasibility study then require completion in order to submit the necessary documentation for an Environmental Assessment decision. Both provincial and federal agencies will review the project extensively. So a couple years of study and a couple years of approvals appears to be the norm.
It will likely take an additional four years of construction activity to get all of the infrastructure in place. I assume the critical path will be shaft sinking and lateral development underground.
What do you think Arrow would initially produce and could produce once it is fully ramped up?
When we did the initial design work for McArthur River I was happy with scheduling 18 million pounds U3O8 per year and the mine has been achieving this for 15 years now.
For Arrow, presuming the back of the napkin resource estimates by others are accurate, I would be happy to do a pre-feasibility study based on 10 million pounds a year of drummed U3O8. This would likely be achieved by initially mining in the 500 tpd range, which constitutes a small mine.
What type of mining techniques to you think will be used, and what split would you anticipate? Blast hole? Raise Bore?
For radiation reasons, blast hole stoping grades above 3-4% U3O8 becomes problematic. So I assume the portion of the ore above this grade would be raisebored similar to McArthur River.
Mentioning raiseboring as a mining method usually causes eyebrows to raise and eyes to roll amongst the analyst community. They thought I was nuts for proposing it at McArthur River in the late 90’s. But I would like to point out that McArthur River used only four raiseborers during the first 10 years of production to average over 18 million pounds U3O8 per year and were not only the world’s largest producer but also the world’s lowest cost. Cost per pound is what matters, not cost per tonne. Radiation is the overriding issue.
How difficult do you think it would be to mine a basement-hosted deposit like Arrow versus mining uranium at McArthur River?
The geometry at Arrow is excellent. Underground mining engineers pray for vertical ore bodies and this is present at Arrow. I have only seen the core photos that NexGen has published on their website and the core looks reasonable. Small stopes similar to Eagle Point are likely in order.
With respect to raiseboring of the high grade, there are multiple ways to attack this geometrically. McArthur River is constrained by the location of the water-bearing sandstone but, being so far down in the basement rock at Arrow, this should not be an issue. No ground freezing is used at Eagle Point and I expect that to be the case at Arrow.
Could the owner of Arrow eventually grow to be a serious threat to Cameco?
I think everyone can peacefully co-exist. Cameco has successfully navigated the treacherous waters known as Kazatomprom who now dominate supply without too many hiccups. Cameco are excellent marketers of uranium. The miners of Arrow will need to be also.
Uranium deposits are wasting assets. I mention above that it could take 8-9 years to put Arrow into production. Although Cameco is currently focused on ramping up Cigar Lake, the 2012 NI 43-101 demonstrates that the mine life is roughly 12 years. So planning for the next generation of mines needs to commence in the next 2-3 years. Likewise, the easy ore at McArthur River (Zone 2 in the basement and Zone 4 Lower) is largely mined out and the tough stuff in the water-bearing sandstone remains.
Are uranium buyers looking for a new entrant with a low-risk Canadian deposit to buy uranium from?
I have no idea. The number of potential suppliers is down somewhat but Kazatomprom has also made significant inroads recently into the U.S. supply chain.
Does it make sense for NexGen and Fission to merge?
I currently don’t see the urgency. I think both projects need to complete pre-feasibility studies, at least, to see what sort of synergies may exist. Obviously, access to capital is what is going to determine the outcome here. It makes no sense to build two mills.
How might Cameco be viewing Arrow right now?
I think Cameco should be viewing the whole trend as a twin to Rabbit Lake, which has been in production for 40 years now. Rabbit Lake started off as an open pit and then they discovered and mined a series of deposits over a 12-km strike length by following the Collins Bay Fault. The PLS/Arrow trend looks remarkably similar though the ultimate mining sequence may be different.
What’s in Cameco’s pipeline? Why buy and build Arrow if they have other good stuff?
Cameco has three good deposits for future exploitation: Millennium, Kintyre and Yeelirrie. Millennium has some similarities to Arrow and has easy road access to the mill at Key Lake. So it would seem logical to bring this into production first when the inevitable production decline at McArthur River commences.
Kintyre and Yeelirrie are in Western Australia and are both open-pit deposits. These are probably the two best undeveloped deposits in Australia assuming Jabiluka never sees the light of day. Little infrastructure exists and both need mills.
So if Cameco acquired Arrow I would rank it after Millennium but before Yeelirrie and the smaller Kintyre.
Fukushima has of course totally changed the development timeline equation. Cameco was on an acquisition spree prior to Fukushima but now must conserve capital for better days.
Cameco tried to acquire Hathor’s Roughrider deposit but backed off when Rio Tinto bid. Any comment on how they make acquisitions?
I would characterize Cameco as conservative. And rightfully so, in a post-Fukushima era. They have typically performed analysis in-house instead of relying on investment bankers and engineering firms to goad them along. In my days working with the business development team during the last boom, we were known as “Sleepy Hollow” which we wore as a badge of honour. As mentioned previously, what was available for acquisition during the last boom was quite frankly garbage. We let others fall on their sword acquiring it. We sat on the sidelines.
What might Cameco want to see prior to making a bid?
No idea.
Does Cameco have a minimum size threshold?
No idea.
Considering that Arrow and PLS are different types of deposits would the size threshold be different for each deposit?
The open-pit measured and indicated resource at Kintyre is 55 million pounds and at the Millennium underground deposit it is 76 million pounds. Cameco saw fit to acquire Areva’s portion of Millennium a few years back. So these acquisition thresholds applied in at least pre-Fukushima days.
Arrow has no declared resource at the moment but if Cameco is not keeping an active model of the drill results up to date as they are issued they would be falling down on the job.
If not Cameco, who else? Is there a possibility of foreign state-owned enterprises buying in, from India for example?
Currently mining companies are more concerned with preserving balance sheets than they are about seeking out new growth opportunities. But this is why we call it a cycle. Mines are wasting assets so I suspect in 24 months’ time, the focus will begin to shift towards growth again and this will be reflected in asset values.
Fission adequately demonstrated by hanging out the For Sale shingle lately that there is little appetite out there for a greenfield development project, so a great deal of patience will be necessary to allow sentiment to shift from a market in over-supply to one that sees future shortages.
Apart from Cameco, the obvious candidates are Asian utilities, a recapitalized Areva and major miners such as Rio Tinto or BHP. Dark horses such as Paladin Resources and even Neal Froneman’s (ex-Uranium One CEO) Sibayne should not be ruled out. If the market capitalization still refuses to properly reflect fair value, then I would suggest that private equity may be the proper way to go until the downturn is waited out and uranium becomes the toast of the town again. Shareholder dilution while waiting for this to happen is not a good solution.
Is there room for another producer in the uranium space if NXE were to look at developing this project?
There is always room for another producer if they are cost competitive. ERA’s Ranger mine is almost certain to close in the next couple of years once stockpiles are milled out so this is one less supplier. Cameco has not indicated what their plans are for tailings disposal post-2018 at Rabbit Lake so there is the potential to lose this supply source also, at least temporarily. Note that both of these mines are stalwarts from the ’80s and ’70s, respectively.
If you were the CEO of NexGen, what would you be focusing on?
I would start to understand what the approvals process is and what data should be collected while the drills are currently turning and the core is fresh, not two years later when you have to send the drills back out to collect information you did not know was important for the EIS and feasibility study. Rock quality, rock strength, packer testing, waste rock characterization, acid mine drainage potential, those sorts of issues should be dealt with now while the core is fresh and the drill holes are open. Baseline data collection for the EIS should also be underway.
I would also ensure that I had a good community relations program in place so that the potentially impacted communities are kept in the loop. This cannot be overstated.
Are you invested in any uranium stocks right now?
I am a shareholder of NXE. I have a very low risk tolerance which therefore excludes 99.5% of exploration companies. But what NXE is currently drilling in my opinion only comes around once every 20 years. The timing is a shame.
What are you up to these days?
After 35 years in the underground mining industry I am happily retired and still living in Saskatchewan in the summers at least. I am glad to pass on knowledge that I have gained to ensure the safe extraction of ore in the Saskatchewan uranium and potash mining industries so that they can remain a strong and important part of the provincial economy. Unfortunately, no text books have been written on how to underground mine uranium in particular so it would be a shame to see this institutional knowledge lost like it has been in other countries. Otherwise I am trying to get the handicap below 5.
Thanks for your time, Mr. Beattie!
BY TOMMY HUMPHREYS
Get an email or text message whenever NexGen has an insider trade or is mentioned in our community, chat.ceo.ca, by subscribing for alerts at the NexGen channel (http://chat.ceo.ca/NXE).
Readers might be also interested in: He shorted Bre-X. Now fund manager is going long NexGen
This interview is provided for general informational purposes and is not intended to be investment or professional advice of any kind. See NexGen Energy’s profile on www.sedar.com for a full description of risks facing the company. Author is a shareholder in NexGen and is biased. Always do your own due diligence and talk to a licensed investment advisor prior to making any investment decisions.
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