Urenco to Upgrade 12,000 t Depleted UF6 at UEChK

Since May of this year, 3,600 t UF6 travelled by rail to Yekaterinburg where the depleted uranium will be re-enriched to reactor grade. This is the first such shipment of depleted U from Gronau for re-enrichment since 2009. An additional 8,400 t has been scheduled for transport through 2022.

The 12,000 t depleted U (average assay = 0.30% U-235), once returned to Urenco, translates to just under 2,000 MT natural uranium (4.4 Mlbs), or a little over 2% of annual demand.

$BKIRF : Black Iron Inc. — Independent Economic Analysis

Long-Term Price Case$97.19/dmt
Flagship ProjectShymanivske
Shares Outstanding186,300,000
Market Cap$11,178,000
Average Annual Production7,065,000 dmt
Payable Product141.3M dmt
LoM20 Years
True All-in Costs (TAIC)$56.26/dmt.
Gross Revenue$13,732,947,000
Ukrainian Federal Government Royalties($863,300,000)
Net Revenue$1,286,9647,000
Total Operating Costs ($4,446,200,000)
Operating Cash Flow (EBITDA)$8,423,447,000
Income Taxes($1,516,220,460)
Total Capital Costs($1,124,200,000)
Net Income$5,783,026,540
Net Profit Margin42%
Absolute Cost Structure (ACS)58%
MTQ Score (Higher is Better)0.7
True Value$31.04/sh.
True Value Discount (TVD)100%
Cash Flow Multiple5x
Net Annual Cash Flow$289,151,327
Future Market Cap$1,445,756,635
Future Market Cap Growth12,834%

Notes: All Values in U.S. Dollars

Black Iron Inc. enjoys an MTQ Score of 0.7, which places it within the 80th percentile of companies under investigation. In other words, Black Iron’s projected Net Profit Margin potential is high, while its projected Absolute Cost Structure is low, a combination for which Fahy Capital Management looks when placing a prospective investment under the microscope.

MTQ Scores (BARS — Higher is Better) Vs. Absolute Cost Structure (LINE — Lower is Better)
Update, 27 September 2019

Ukraine’s Defence Minister, Andriy Zagorodniuk, has agreed to the transfer of land required for the development of Shymanivske. A Memorandum of Understanding will be signed next month.

$FCUUF : Fission Uranium — Independent Economic Analysis (U/G PFS Update)

U/G PFS, 23 September 2019
Long-Term Price Case$50/lb. U308
Flagship ProjectPLS (Triple R)
Mineral Reserves81.4M lbs.
Shares Outstanding486,014,642
Market Cap$141,867,674
Average Annual Production13.1M lbs.
Payable Product78.7 lbs.
LoM7 Years
True All-in Costs (TAIC)$35.26/lb.
Gross Revenue$3,935,000,000
Provincial Revenue Royalties($287,142,555)
Net Revenue$3,647,857,445
Total Operating Costs ($567,803,677)
Operating Cash Flow$3,080,053,768
Provincial Profit Royalties($328,593,580)
Income Taxes($492,136,715)
Total Capital Costs($1,099,582,645)
Net Income$1,159,740,828
Net Profit Margin29%
Absolute Cost Structure (ACS)71%
MTQ Score (Higher is Better)0.4
True Value$2.39/sh.
True Value Discount (TVD)88%
Cash Flow Multiple10x
Net Annual Cash Flow165,677,261
Future Market Cap1,656,772,610
Future Market Cap Growth1,068%

Notes: All Values in U.S. Dollars

$DNN : ISR Field Tests, Early Results

In a word, in Test Areas 1 & 2, hydraulic responses were observed where hydraulic responses were expected and no hydraulic responses were observed where hydraulic responses were unwanted. That’ll give the naysayers of ISR at Phoenix something to chew on.

Next Step: Commercial Scale Well at Test Area 1.

We believe Phoenix will prove a game-changer, with the potential to soon demonstrate that EBITDA may be generated by select operators in a world of sustained low spot and LT contract prices.

Denison Mines has a current weighting of 3.4% in the NuChem International Catalyst Fund.

Fahy Capital Management Q3 Updates

Our investment target in Alexco Resource Corp. was reached on 27 August 2019. We exited at U.S. $2.43 for a return of 87%.

We added to our position in Equinox Gold Corp. on 20 September 2019, raising its weighting in the NuChem International Catalyst Fund to 8%.

Subsequent to the release of an updated PFS, we raised our target in Vista Gold Corp. from U.S. $5.44 to U.S. $5.50.

On 26 September, we initiated a position in Black Iron Inc.

Fahy Capital Management does not have any additional Q3 Updates to report.

$NIOBF : NioCorp — Independent Economic Analysis

Standard Model10-Year Contracted Sales Model
Long-Term Price Case$3,676/kg Sc2O3 | $0.99/kg TiO2 | $46.55/kg NbLong-Term Price Case $3,676/kg Sc2O3 | $46.55/kg Nb
ProjectElk CreekProjectElk Creek
Payable Primary Product (Nb)168,861 tonnes (168,861,000 kg)Payable Primary Product (Nb) 35,180 tonnes (35,180,000 kg)
Payable Byproduct Metal (TiO2)418,841 tonnes (418,841,000 kg)Payable Byproduct Metal (TiO2) 418,841 tonnes (418,841,000 kg)
Payable Co-Product Metal (Sc2O3)3,410 tonnes (3,410,000 kg)Payable Co-Product Metal (Sc2O3) 947 tonnes (947,000 kg)
Shares Outstanding226,666,534Shares Outstanding226,666,534
Market Cap$95,993,277Market Cap $95,993,277
Average Annual Production7,220 tonnes FeNb (7,220,000 kg)Average Annual Production10,923,113 kg NbEq
Recovery93.14% Sc2O3 | 40.31% TiO2 | Nb 82.36%Recovery93.14% Sc2O3 | Nb 82.36%
LoM36 YearsContracted Sales Model Term10 Years
Payable Product (NbEq)447,052,463 kg NbEq Payable Product (NbEq) 109,231,128 kg NbEq
True All-in Cost (TAIC) $24.15/kgTrue All-in Cost (TAIC)$33.78/kg
Gross Revenue$20,810,292,140Gross Revenue$5,084,709,008
Total Operating Cost($6,717,578,000)Operating Cost($1,865,993,888)
Operating Margin (EBITDA)$14,092,714,140Operating Margin (EBITDA)$3,218,715,120
Income Taxes($2,467,634,246)Income Taxes($563,597,018)
Total Capital Cost($1,609,397,000)Capital Cost($1,260,504,167)
Cumulative Net Income$10,015,682,894Cumulative Net Income$1,394,613,935
Net Profit Margin48%Net Profit Margin 27%
Absolute Cost Structure (ACS)52%Absolute Cost Structure (ACS) 72%
MTQ Score0.9MTQ Score0.4
True Value$44.19/sh.True Value$6.15/sh.
True Value Discount (TVD)99%True Value Discount (TVD)93%
Cash Flow Multiple10xCash Flow Multiple 7.3x
Net Annual Cash Flow$161,728,000Net Annual Cash Flow $139,488,153
Future Market Cap$1,617,280,000Future Market Cap $1,018,263,517
Future Market Cap Growth1,585%Future Market Cap Growth 961%

Notes: All Values in U.S. Dollars

NioCorp has signed a commercial sales agreement with Traxys North America. Under the agreement, Traxys is obligated to purchase 12 tonnes of Sc over the course of Elk Creek’s first 10 years of production. Additionally, 75% of the Elk Creek Project’s primary product, Ferroniobium (FeNb), is under contract over the first 10 years of production: thyssenkrupp (OTC: TYEKF), 50%; Commercial Metals Company, 25%

Fahy Capital Management is not an investor in NioCorp. We may, however, initiate a position in thyssenkrupp this quarter.

Gym, Unreconstructed

“I don’t want to be too comfortable. Once you get used to it, it’s hard to give up. I’d rather stay hungry.”

Joe Santo

4’ x 8’ Deadlift Platform Construction


  • (2) 2’ x 8’ 3/4” Pieces of Plytanium Plywood (1st Layer, Platform Foundation) — Lowe’s (4’ x 8’ Ripped Lengthwise) … $42.98
  • (2) 4’ x 4’ 3/4” Pieces of Plytanium Plywood (2nd Layer, Platform Foundation) — Lowe’s (4’ x 8’ Ripped Widthwise) … $42.98
  • (1) 4’ x 4’ 3/4” Maple Plywood (Third Layer, Lifting Base) — Lowe’s (4’ x 8’ Ripped Widthwise) … $50.98
  • (1) 4’ x 6’ 3/4” Rubber Horse Stall Mat (L&R Plate Landing Pads) — Tractor Supply … $44.99
  • 1 1/4” Construction Screws … $18.95

Total Cost = $200.88


  • Drill
  • Coping Saw


Lay down the 4’ x 4’ Plytanium boards atop the 2’ x 8’ Plytanium boards; attach with construction screws (I used 42 screws). This is the Platform Foundation, so use lots of screws in order to ensure that it is rigid.

Lay down the 4’ x 4’ Maple Plywood Lifting Base atop the Platform Foundation. Center it and attach with screws around its perimeter (I used 16 screws).

Measure the Stall Mat into two 2’ x 4’ sections and rip slowly with the Coping Saw along chalked line. The Stall Mats are heavy and difficult to cut with razor blades. The Coping Saw proved an exceptional and almost effortless alternative.

Lay down one 2’ x 4’ Stall Mat on each side of the centered Lifting Base and attach with construction screws (I used 8 screws on each mat). You’ll have one 2’ x 4’ piece of Stall Mat left over. It makes a good 3/4-in step in front of the Deadlift Platform.

Start Lifting!

Notes: This Platform was designed to ensure that all materials would fit in a small van; you won’t need to rent a U-Haul truck.

By building your own Deadlift Platform, you’ll likely save ~$200.

The squat rack in the background of the first photograph was manufactured by Titan Fitness. In addition to squats, it’s used for pull-ups, seated presses and bench presses. We chose the Titan X-3 over the Rogue SML-1, as it enabled us to save an additional $200, which was invested in a Rogue Ohio Power Bar.

Home Gym Cost Breakdown

  • DL PLATFORM … $200.88
  • FULL BAR JACK … $55.30
  • OHIO POWER BAR … $302.40
  • SQUAT STAND … $334.36
  • BENCH … $71.99
  • PLATE RACK … $53.75
  • EVA MATTING … $79.83

TOTAL COST = $1,619.45

IRR = 1.7 Years

$NORZF : NorZinc — Independent Economic Analysis

Long-Term Price Case$24/oz. Ag, $1.10/lb. Zn, $1.00/lb. Pb
ProjectPrairie Creek
Mineral Reserves186,795,000 AgEq ozs.
Shares Outstanding369,700,000
Market Cap$24,030,500
Average Annual Production10,829,166 AgEq ozs.
Recovery87% Ag, 88% Pb, 83%, Zn
LoM15 Years
Payable Product162,437,490 AgEq ozs.
True All-in Cost (TAIC) $21.86/oz.
Gross Revenue$3,898,499,770
Smelter Deductions($454,000,000)
TCRC + Penalties($432,800,000)
Gross Income$3,011,699,770
Total Operating Cost($1,797,500,000)
Operating Profit$1,214,199,770
Income Taxes + Royalties($469,895,310)
Total Capital Costs ($395,900,000)
Net Income$348,404,460
Net Profit Margin9%
Absolute Cost Structure (ACS)91%
MTQ Score0.1
True Value$0.94/sh.
True Value Discount (TVD)93%
Cash Flow Multiple5x
Annual Cash Flow$23,174,415
Future Market Cap$115,872,075
Future Market Cap Growth382%

Notes: All Values in U.S. Dollars

NorZinc is at the high end of the Absolute Cost Structure curve and the low end of the Net Profit Margin curve. In other words, Prairie Creek is a Project that will require substantially higher Silver, Lead and Zinc prices in order to be viable.

In a raging silver bull market, we think shares could appreciate by as much as 382%, which assumes shares will trade at approximately 5x future net annual cash flows.

Fahy Capital Management is not an investor in NorZinc.

$VNNHF : Belo Sun Receives Positive Ruling — Construction License Remains Valid

Belo Sun Mining reports that a three judge panel decision by the Court of Appeals of the Federal Justice in Brazil has ruled unanimously that SEMAS remains the competent authority for the environmental permitting of the Volta Grande Gold Project.

The ruling confirms that the Construction and Environmental Licenses granted by SEMAS for the Volta Grande Gold Project remain valid, subject to the completion of the Indigenous Study. [LINK]

$VNNHF : Belo Sun Mining — Independent Economic Analysis

Long-Term Price Case$1,700/oz. Au
Flagship ProjectVolta Grande
Mineral Reserves3,788,000 ozs.
Shares Outstanding442,631,915
Market Cap$84,100,064
Average Annual Production205,155 ozs.
LoM17.2 Years
Payable Product3,524,100 ozs.
True All-in Cost (TAIC) $900/oz.
Gross Revenue$5,990,970,000
CFEM Royalty($42,240,000)
Gross Income$5,948,730,000
Total Operating Costs($2,488,640,000)
Operating Profit$3,460,090,000
Income Tax($155,060,400)
Total Capital Costs($486,086,900)
Net Income$2,818,942,700
Net Profit Margin47%
Absolute Cost Structure (ACS)53%
MTQ Score (Higher is Better)0.9
True Value$6.37/sh.
True Value Discount (TVD)97%
Cash Flow Multiple5x
Net Annual Cash Flow$164,124,000
Future Market Cap$820,620,000
Future Market Cap Growth876%

Note: All Values in U.S. Dollars.

$DNN : Denison Mines — Independent Economic Analysis

Long-Term Price Case$65/lb. U308 $65/lb. U308
Flagship ProjectPhoenixGryphon
Project Percentage90% 90%
Mineral Reserves98,460,000 lbs. 98,460,000 lbs.
Shares Outstanding589,100,000589,100,000
Market Cap$342,267,100$342,267,100
Average Annual Production5.966M lbs.7.648M lbs.
LoM10 Years7 Years
Payable Product58.767M lbs.48.817M lbs.
True All-in Cost (TAIC)$39.20/lb.$47.83/lb.
Gross Revenue$3,819,855,000$3,173,105,000
Saskatchewan Revenue Royalties & Surcharges + Resource Credit($276,939,487)($230,050,112)
Total Operating Cost($194,347,597)($567,610,551)
Operating Profit$3,348,567,916$2,375,444,337
Saskatchewan Profit Royalties ($502,285,187)($356,316,651)
Income Taxes($904,113,337)($641,369,971)
Total Capital Costs($425,950,000)($539,660,498)
Net Income (Denison Share)$1,364,597,453$754,287,495
Net Profit Margin36%24%
Absolute Cost Structure (ACS)60%74%
MTQ Score (Higher is Better)0.60.3
True Value$3.60/sh.
True Value Discount (TVD)86%
Cash Flow Multiple10x5x
Net Annual Cash Flow$138,530,520$118,184,544
Future Market Cap Contribution$1,385,305,200$590,922,720
Total Future Market Cap Growth477%

Notes: All Values in U.S. Dollars

We boosted our stake in Denison Mines this morning by 25% following an updated analysis in which the company achieved a maximum in-house Composite Rating of 5. Denison Mines excelled in the following categories: Net Profit Margin (Phoenix), Absolute Cost Structure (Phoenix), True Value Discount, and Market Cap Growth. Our Target, however, has been lowered by 20%, as our updated calculations implied a True All-In Cost (TAIC) that was higher than expected for Phoenix, while Net Profit Margin and Absolute Cost Structure for Gryphon were average.

MTQ Scores & Composite Ratings — Study Group Comparison