How many mines do they have? Are they in production ? Is it a good Uranium Play. What is your Outlook on world going Nuclear Energy
Is EFR a BUY Thank you RAK
EFR is a decent small cap uranium company, trading at a cheap valuation of 12X earnings. It has $125M cash. The revenue base is fairly low ($43M this year) but its has developing assets and good potential within the sector. It now has production from three mines, but we need to make sure new mines' ramp ups go well. Cash flow has been negative, and based on 12-month cash burn it has about 3 years' cash. But it will likely raise capital in the next 18 months, depending on how cash flow develops. Insiders own 3%. EFR has one producing uranium facility, two in pre-production (just started this week) and one on standby. It produces rare earths in Utah and has a rare earth development project in Brazil. We think the outlook for uranium remains decent overall. The sector has been hot and may consolidate a period of time, but the underlying demand/supply scenario remains positive. We would consider it a decent sector name, but should be considered higher risk.