(MENAFN- ProactiveInvestors)
() remains the subject of a buy recommendation with speculative risk and a price target of $0.25 from Canada-based investment bank Dundee Capital Markets.
Shares in AEK are currently trading at $0.08.
Last week the company received strong results from metallurgical test work on core material from its Temrezli uranium deposit in Turkey
The following is an extract from the report.
announced a significant senior management appointment that we believe is a meaningful de-risking event.
Tom Young former VP of Operations at Cameco USA was appointed as Chief Operating Officer. He will oversee development of the company's flagship Temrezli ISR project in Turkey.
We have long highlighted the lack of uranium experience in Turkey as a risk for AEK but yesterday's appointment certainly goes a long way in starting to ease those concerns.
Mr. Young has experience in both development and operations of ISR uranium mines through his responsibilities managing Cameco's Smith Ranch-Highland and Crowe Butte mines in the U.S.
He already has familiarity with Temrezli through his role at TetraTech overseeing the ongoing PFS study.
His appointment is certainly a strong endorsement and part of the ongoing slew of de-risking events as of late from AEK on both the operational and technical fronts.
Encouraging metallurgical results
Test work from MTA laboratory in Ankara (Turkey) demonstrates potential for up to 84.9% recovery in a short leach time from Temrezli core.
The improved recoveries will be implemented in an upcoming PFS (69% used in PEA).
This should make a meaningful impact on plant and well field design with potential for cost and recovery benefits.
This follows recent positive hydrogeological test results that could see 26% better flow rates meaning better productivity per well and potential for increased spacing between wells which could lower operating costs.
Temrezli is close to infrastructure and otherwise appears to be comparable to those of its US peers suggesting this low cost project could be competitive.
Valuation unchanged
Both metallurgical and hydrogeological results have potential to meaningfully impact economics.
Probably as important but difficult to quantify is the appointment of a COO with extensive ISR experience.
Temrezli total cash costs at US$23/lb should be first quartile.
We maintain conservatism and maintain our costs despite the met and hydro advances.
Capex is fairly low at ~US$40 MM for a ten year 1 MM lbs pa operation.
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