Interview with Marc Henderson, President and CEO of Laramide Resources (TSX:LAM) As an investor, let us know which parts of what you hear in this interview you believe in. Leave a comment. We will answer.
Laramide Resources is a Canadian-based company that owns large development stage uranium projects in the United States and Australia. Laramide Resources is dual-listed on the TSX and ASX, and is on the OTC (LMRXF).
Laramide Resources' share price performance is not unusual for a uranium junior in uncertain times and lack of price discovery. With uranium prices at a stagnant, uneconomic low, all uranium companies, big and small, are struggling. The utility companies hold all the cards, and the assigned working group is about as accurately scheduled as Brexit, with impeachment proceedings currently taking centre stage in the capital of the free world.
Laramide Resources started the year with a share price of CAD$0.43. By the looks of things, the share price has rolled down a mountain and currently sits at a 52-week low of CAD$0.20. In fact, the price is approaching a 5-year low, but is currently beaten by the Autumn of 2015. The market cap of Laramide Resources stands at CAD$27M.
Henderson, like all uranium CEOs, points to the inevitable tip of the supply-demand scale as an assurance of uranium prices rising, but that does not necessarily constitute a Laramide Resources share price increase; that will depend upon Laramide's business strategy, assets, cash reserves, management team and, something often that is forgotten about in projections with more graphs than words: luck.
Laramide Resources is following the uranium business strategy that has become so predictable in the description of every uranium interview: they're sitting, maintaining their projects, and waiting.
Laramide Resources claims their projects are 'ready to go.' This is not the case; their New Mexico-based La Jara Mesa project is one permit away, but Henderson claims this would be a relatively short process. The Australian projects are far from shovel-ready.
Henderson predicts Laramide Resources will need to spend $30M of CAPEX to get the La Jara Mesa resource online at 1Mlbs of uranium per year, with the potential to eventually scale up to 3 million as the uranium price rises and margins increase. Henderson sings the virtues of the asset, being a low cost, high-quality ISR.
Henderson also shines a light on the Westmoreland Uranium Project, obtained from Rio Tinto during the time uranium was on an exponential trajectory. However, there is a lot of work and money before it is anywhere near production, and even then it is reliant on the 'right politics' in Australia and, predictably, the right price.
While the management team has vast mining experience, there will be question marks around their specific knowledge and experience of uranium production from start to finish: an incredibly complex and difficult process. Henderson's dominant experience is as a chartered financial analyst. The majority of management lacks the necessary experience to inspire investor confidence, and at such a time of uncertainty, this is a major problem.
The company raised money this summer, and this was just to "keep the lights on." Further dilution will be necessary. The company has been forced to throw money at assets just to keep them alive in this deepest of bear markets. Another concern will be the remuneration policy at Laramide, which has only recently seen a reduction in management compensation: about time, though maybe a sign of how bad things are getting!
Henderson points towards Laramide Resource's asset quality as their USP to investors. However, the Australian project is on the shelf indefinitely, and one would question whether their American projects are of unique quality or not, but Henderson is adamant the production portfolio is enough to set Laramide apart.
What did you make of Marc Henderson? What has Laramide Resources got that other uranium companies don't? Comment below and we may just ask your questions in the near future.
We Discuss:
0:51 - Company Overview
1:24, 10:18 - The Macro Story: Looking into the Uranium Market and What Could Change Prices
6:12. 20:00 - Assets: What Have They Got and are They Shovel Ready?
9:20 - Prices Need to be at $40: What are They Doing Until Then?
17:48 - Gold vs Uranium: Differences Between Commodity Mining
24:08 - Company Financials and Remuneration
29:14 - Reasons to Invest in Laramide Resources
Company page:
Make smarter investment decisions, subscribe here:
For FREE unbiased investment information, follow us on Twitter, LinkedIn and Facebook:
Take advantage, hear it here first:
0 Comments