VMY is part of a play upon the Uranium sector caused by low metal prices, when this takes off, all boats will be lifted and VMY has an excellent management team with significant experience.
Currently, prices are below the most recent capital raising price and so it is a good entry point in a reasonable company to be able to get exposure to this market.
Kazatamphrom and Cigar Lake shutdowns due to end and mines will reopen progressively.
[I hold VMY shares]
Speculative Uranium Project Developer. No income at this point, as there is no production. [Disclosure: I hold some VMY, it's currently my only uranium exposure. I like their management.]
20-Mar-2019: VMY has released an announcement this morning titled "Alligator River Project - Exciting Results from 2018 Regional Work Programs" - see here.
Vimy Resources CEO Mike Young said, “The more we review and interpret the results of the 2018 work program, the more convinced we are about the enormous potential of the Alligator River Project. There are significant similarities between this region and the Canadian Athabasca Basin. The exploration team has combined the Athabasca model with our own interpretation to develop an ‘Alligator River Project exploration tool-kit’ to locate both the uranium ore zones and the alteration haloes that are proximal to the uranium mineralisation.
“In my experience, the Alligator River Province is one of the most prospective metal provinces with the least amount of modern exploration that I’ve ever seen. Furthermore, it is located in a uranium-enlightened jurisdiction, the Northern Territory, and with the support of the northwest Arnhem Land Traditional Owners.
“We’re looking forward to a successful exploration season in 2019 at Alligator River.”
Disclosure: I hold VMY - they are very speculative at this point.
URANIUM was the biggest mover overnight after US president Donald Trump decided not to interfere in the market.
The uranium spot price jumped 5% to US$26.30 per pound, the highest price since March.
Base metals were also positive, despite Chinese data showed a slowing of the economy.
Nickel reached an 11-month high of $13,595 per tonne.
Copper reached a July high and is only $26 off breaking through $6000/t.
Zinc notched up its fourth straight gain as the International Zinc Lead Study Group reported the metal was in deficit by 123,000 tonnes for the first five months of the year with total reported inventories rising by 17,000t.
The metal has been battered in recent weeks amid fears of oversupply.
In the precious metal space, gold was steady at $1413.50 an ounce, while Australian dollar spot gold was sitting at A$2014.23/oz.
Palladium rose to near-record highs of US$1562.90/oz.
The MySteel 62% Australian iron ore fines price was up 1.8% to $121.70 per tonne.
ASX futures were down 5 points, despite US stocks hitting a new record overnight.
I do hold VMY shares. Vimy Resources (ASX:VMY, formerly Energy and Minerals Australia) is one example of where I have purchased shares in a very-high-risk explorer/developer with no cashflow or profits, and no clear timeline to achieve profitability. This one is a punt based on an improved uranium price, and I bought the shares prior to Trump's decision not to impose a tariff or quota on uranium imports into the US (the "section 232" decision) after US uranium miners Energy Fuels Inc and Ur-Energy sparked an investigation in early 2018 after filing a petition under section 232 of the US 1962 Trade Expansion Act citing the US’ increasing reliance on uranium imports, particularly from high risk countries, was a threat to national security. Trump decided it was not, and other than establishing a new committee to investigate the industry further, he declined to make any changes to the status quo at the time. It had been widely reported that Uranium supply contracts to US companies (such as nuclear power plant operators requiring uranium) had all been on hold awaiting that decision and the uranium price had remained very low also due to the uncertainty. Trump's decision was widely welcomed by Australian uranium explorers and developers such as Vimy (VMY) and Boss Resources (BOE). However, the uranium price still remains very low, below the cost of production for most wannabe-uranium-miners like VMY. They need a higher uranium price before their projects become economically viable. Many companies globally that had previously produced uranium have mothballed their mines and plants (put them on "care & maintenance") due to the low uranium price, and aren't interested in starting up those operations unless the price rises materially, which many expected it would have by now - but it hasn't. Most believe it's just a matter of time. However, being right but too early is the same as being wrong in this game. As the old saying goes, the market can stay irrational longer than you can stay solvent. For that reason, my "punt" on VMY (which is a rare exception to my usual rule of avoiding such companies) is for a small holding with a relatively small amount of money (relative to my investments in investable - i.e. profitable - companies). I also view that holding as a trade rather than an investment, so I will quickly sell those shares at a profit on a share price spike on the back of improved sentiment around uranium. That's what I've done previously, and there is money to be made occasionally that way. However, it certainly doesn't always work out that way. High risk!
Mike Young is impressive and I've followed him for years. He has been involved in other companies also - such as Cassini Resources (ASX:CZI), and was previously the MD of BC Iron where he took them from first drill-hole to first iron shore shipment in under 4 years. When he left BC Iron in May 2013, they had a market cap of $500 million. VMY is currently my only uranium exposure and the holding that I would consider to be the riskiest in my main trading portfolio, but it's a small position, and if it went to zero, it would be unfortunate, but not particularly material to me. I like VMY because they never miss an opportunity to promote themselves, and they do it all on a very small budget (smell of an oily rag sort of company). They have a volatile share price, but that can work in your favour with a trading stock. VMY is certainly NOT investment grade however.
18 July 2019: Vimy presentation at Noosa Mining Conference