Skys,

We're both bullish and I appreciate the positive exchange of ideas.

I think the current (emphasis on current) cash flow valuation for a mining company (granted, we're thinking way into the future) is a trap. Miners are never fairly valued by current cash flow because the resource can be depleted at different rates.

If you had a 5 million pound resource and pulled it out of the ground at a rate of 1 million pounds per year, your current cash flow would be far higher than if you pulled it out of the ground at 500,000 pounds per year, yet the underlying value of the company would be similar (not the same) because you have only 5 million pounds to work with.

Current cash flow valuations are really the pitfall of many retail investors when they look at the mining industry. What you should really be looking at is a net present value of future cash flow calculation that takes into consideration the total resource, the cost to mine, the rate of return you could earn if your money were otherwise invested, potential for resource expansion, and risk associated with a change in market price for the underlying resource. Do a google search for a net present value calculator and you'll see what I mean.

Also, I highly doubt the estimate of 20% of pipes returning mineable grades of uranium. I am guilty of posting this myself in the past (you can see it in some of my earlier posts) but upon closer evaluation I find that the 20% refers to pipes that are drilled, not all pipes that exist. The US Geological survey which once went on record as saying that Breccia pipes would be a major source of future uranium mined in the US stated that only 4% of all pipes had a mineable resource.

Is it 4%? Is it 20%? I think that the idea here is that with 300 pipes, 12 are going to be mines. But you might have to examine 60 via drilling to find those 12. Briscoe and company claim that they can find them very efficiently, so maybe they can drill only 24 to find 12, who knows? 

But, if each pipe has 5 or 6 million pounds it doesn't really matter what the yearly (or daily) cash flow is from mining; the company will be valued on the total resource using a method close to what I describe above. Of course the market is a speculative machine and may 'bet' that more pipes will be found, or that the price of uranium will rise, or... etc, etc, but established mining companies are still valued using NPV of future cash flow, not present cash flow.

Take 12 producing pipes that we likely have but still must find, and you have a resource of 60 million pounds, give or take. Nothing to sneeze at. What are those pounds worth? Depends on all the factors I note above, and only when they are fully delineated with drilling and the costs are known.

I'm posting a link to the 4% I refer to above. Note that the USGS says that only 1% of all pipes have significant uranium mineralization, but in the Arizon Strip area this is considered to be 4%.  http://dirxploration.com/kaibab.html

Granting that the majority of the identified pipe-type surface structural anomalies are actually pipe-related, it is critical to understand that the breccia pipe exploration work of the 1980s showed that not all of the collapse breccia pipes located by the initial structural analysis work of geologists contain uranium mineralization. Throughout all of northern Arizona, the USGS estimates that only about 1% of the Arizona breccia pipes contain significant uranium mineralization. Within the 2500 square mile highest potential exploration area, however, this percentage is already -- based on the results of the 1970s and 1980s uranium exploration period -- up to nearly 4%.