Mineweb reports on a "Uranium star masquerading as copper dotcom". Yes folks, "uranium's biggest secret may be a Zambian copper miner with big reserves of uranium effectively mined for free". Here is a short extract from the article:
"Equinox aims to produce an annualised 200,000 tons of copper a year by this time next year. Current price levels for the stock suggest a long-term copper price assumption of around $1.65 a pound, just more than half the current spot copper price. The sweet part of this story is that Equinox's uranium resource is essentially for free. The figures start with Equinox owning around 20m pounds of uranium, sitting within its Zambian copper ore bodies.
The uranium leg of the operation could be in business by 2010 for a capital cost of around $200m, and a fair-guess operating cost of less than $20 a pound. Using current spot uranium prices of around $125 a pound, and annual Equinox production of 1.5m pounds or uranium, "Equinox Uranium Corporation" would generate cash flows of some $150m a year.
Uranium producers such as Cameco and Energy Resources Australia trade on actual cash flow multiples of ten times and more. A couple of multiplications, and it can be argued that Equinox's entire market capitalisation of C$1.8bn can be justified on its potential uranium production. For those investors still bullish on copper, Equinox's projected annualised production of that metal would produce cash flow of close to $1bn over 12 months, given current spot copper prices.
The story is quite different to a good number of "hopeful glow-in-the-dark uranium developers", and takes on further promise considering that Zambia's copper belt comprises a huge brown fields copper rehabilitation site. Mining and civil infrastructure is already in place for a number of copper producers, a story enhanced in its own right by substantial re-developments underway across the border on the contiguous Democratic Republic of the Congo copper belt."