Clock - Uranium Supply Crunch and Critical ... - Andrew Johns
Clock - Uranium Supply Crunch and Critical ... - Andrew Johns Clock - Uranium Supply Crunch and Critical ... - Andrew Johns
Canada Research | Page 48 of 87UraniumValuation and FinancialsExhibit 62: RJL NAV Summary for Paladin EnergyUnfunded NAV Valuation C$mln C$/fd.sh. %CorporateWorking Capital (F3Q12A) 184 0.19 10.7%Options & Warrants 2 0.00 0.1%LT Liabilities (+PV of interest) (793) -0.82 -46.1%SG&A (NPV, 8%) (100) -0.10 -5.8%Future Equity Dilution 0 0.00 0.0%(706) -0.73 -41.1%ProjectsLanger Heinrich (DCF, 8%) 1,124 1.17 65.4%Kayelekera (DCF, 8%) 509 0.53 29.6%Mt. Isa (DCF, 8%) 252 0.26 14.6%Aurora (DCF, 8%) 190 0.20 11.1%Manyingee ($/lb) 192 0.20 11.2%Bigrlyi ($/lb) 37 0.04 2.2%Niger Assets ($/lb) 46 0.05 2.7%Angela and Pamela ($/lb) 26 0.03 1.5%Other ($/lb) 50 0.05 2.9%2,425 2.52 141.1%1,719 1.79 100.0%Fully Diluted Sh. (mln) 961.3Source: Raymond James Ltd.We have an Outperform rating and $1.80 target on Paladin. Our target is based on a1.0x P/NAV applied to the project component of our unfunded C$1.79 NAVPS (8%; seeExhibit 62). Unlike our other covered producers, we believe the exclusive use of P/NAVbetter reflects the value of the company’s assets and growth potential, until operationsreach consistent levels of cash flow. Our P/NAV multiple reflects the historical tradingranges of producer equities, adjusted for Paladin’s company-specific risk (and isconservative compared to our pre-Fukushima average Paladin multiple of 1.31x)Paladin currently trades at US$2.87/lb for the company’s 543 Mlbs in 43-101 resources,a discount vs. our global producer peers at US$4.74/lb. On an EV/lb 2013E production,the company trades at US$196/lb vs. Cameco and Uranium One at US$400/lb andUS$209/lb. Using our preferred method of valuation, P/NAV, Paladin trades at 0.63x,below its closest producer peer Uranium One, at 0.72x. These metrics support our viewthat the stock is currently under-valued.Raymond James Ltd. | 2200 – 925 West Georgia Street | Vancouver BC Canada V6C 3L2
Uranium Canada Research | Page 49 of 87Exhibit 63: Financial StatementsUS$000s (Fiscal year-end Jun-30) 2011A 2012E 2013E 2014EIncome StatementRevenue 268,900 367,055 475,468 572,489Operating Expenses (186,100) (245,639) (272,349) (276,289)SG&A, Forex (57,000) (48,900) (40,000) (40,000)Mineral Write-offs 0 0 0 0Other (94,800) (222,200) (19,000) (14,000)EBITDA (69,000) (149,684) 144,119 242,200DD&A (36,100) (45,577) (54,335) (57,219)EBIT (105,100) (195,261) 89,784 184,981Interest income (expense) (36,400) (38,146) (42,558) (37,533)Tax recovery (expense) 16,600 66,941 (40,850) (76,764)Net Income (124,900) (166,465) 6,377 70,684Weighted Avg. S/O ('000s) 744,055 834,821 834,821 835,571Adjusted EPS (US$/sh; basic) (0.08) (0.06) 0.01 0.08Cash FlowOperating (102,000) (102,000) 60,712 127,902Investing (132,500) (132,500) (29,511) (58,229)Financing 1,300 1,300 (134,000) 1,842Net Change in Cash (net FX) (230,500) (231,600) (102,799) 71,515CFPS (US$/sh; w/o WC) (0.14) (0.10) 0.07 0.15Cash (EOP) 117,400 173,200 70,401 141,916Balance SheetCurrent Assets 329,400 432,600 329,801 401,316Non-current Assets 2,074,300 1,994,134 1,969,311 1,970,321Total Assets 2,403,700 2,426,735 2,299,112 2,371,637Current Liabilities 118,900 250,100 250,100 250,100Non-current Liabilities 929,600 948,200 814,200 814,200Total Liabilities 1,048,500 1,198,300 1,064,300 1,064,300Deficit, other comp income (loss) (701,800) (845,665) (839,288) (768,605)Shareholder Equity 2,057,000 2,074,100 2,074,100 2,075,942Total Liabilities + Equity 2,403,700 2,426,735 2,299,112 2,371,637Source: Raymond James Ltd., Paladin EnergyRaymond James Ltd. | 2200 – 925 West Georgia Street | Vancouver BC Canada V6C 3L2
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Canada Research | Page 48 of 87<strong>Uranium</strong>Valuation <strong>and</strong> FinancialsExhibit 62: RJL NAV Summary for Paladin EnergyUnfunded NAV Valuation C$mln C$/fd.sh. %CorporateWorking Capital (F3Q12A) 184 0.19 10.7%Options & Warrants 2 0.00 0.1%LT Liabilities (+PV of interest) (793) -0.82 -46.1%SG&A (NPV, 8%) (100) -0.10 -5.8%Future Equity Dilution 0 0.00 0.0%(706) -0.73 -41.1%ProjectsLanger Heinrich (DCF, 8%) 1,124 1.17 65.4%Kayelekera (DCF, 8%) 509 0.53 29.6%Mt. Isa (DCF, 8%) 252 0.26 14.6%Aurora (DCF, 8%) 190 0.20 11.1%Manyingee ($/lb) 192 0.20 11.2%Bigrlyi ($/lb) 37 0.04 2.2%Niger Assets ($/lb) 46 0.05 2.7%Angela <strong>and</strong> Pamela ($/lb) 26 0.03 1.5%Other ($/lb) 50 0.05 2.9%2,425 2.52 141.1%1,719 1.79 100.0%Fully Diluted Sh. (mln) 961.3Source: Raymond James Ltd.We have an Outperform rating <strong>and</strong> $1.80 target on Paladin. Our target is based on a1.0x P/NAV applied to the project component of our unfunded C$1.79 NAVPS (8%; seeExhibit 62). Unlike our other covered producers, we believe the exclusive use of P/NAVbetter reflects the value of the company’s assets <strong>and</strong> growth potential, until operationsreach consistent levels of cash flow. Our P/NAV multiple reflects the historical tradingranges of producer equities, adjusted for Paladin’s company-specific risk (<strong>and</strong> isconservative compared to our pre-Fukushima average Paladin multiple of 1.31x)Paladin currently trades at US$2.87/lb for the company’s 543 Mlbs in 43-101 resources,a discount vs. our global producer peers at US$4.74/lb. On an EV/lb 2013E production,the company trades at US$196/lb vs. Cameco <strong>and</strong> <strong>Uranium</strong> One at US$400/lb <strong>and</strong>US$209/lb. Using our preferred method of valuation, P/NAV, Paladin trades at 0.63x,below its closest producer peer <strong>Uranium</strong> One, at 0.72x. These metrics support our viewthat the stock is currently under-valued.Raymond James Ltd. | 2200 – 925 West Georgia Street | Vancouver BC Canada V6C 3L2
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