From ImaraSPReid
The current JSE price of First Uranium, which is hardly traded locally, is very wide, and and, at the time of writing, was bid at 2000c and offered at 6000c!
We have therefore entered the Canadian price, translated at R6.95/CAD, of 5129c, which gives a value of Simmers' First Uranium stake of 396c. With Simmers trading at 434c the market is valuing its South African gold operations at 38c.
This contrasts with the value placed on it by the CPR (Minxcon) in May 2007 of R2.56bn (242c) using a long-term uranium price assumption of $50/lb against the current price of $105 which has fallen from over $130 in June - July 2007.
The CPR valuation of the South African gold operations (242c) and the market value of Simmers' First Uranium stake (396c) therefore amounts to 638c or 40% higher than the current Simmers's price of 434c. The CPR (by Scott Wilson in May 2007) of the South African gold operations assumed a price of $500/oz.
In both cases therefore the CPR valuations were at much lower gold and uranium prices implying higher value even after their corrections. The Simmers share price reflects current highly negative market sentiment which will take time to improve. On the fundamentals however the share price has more than discounted the lower uranium price and remains a BUY.
