Salman Raises Target on MGA

PATRICK DONNELLY, Salman Partners Inc. (07/06/2010)
"We have removed the previously proposed resource tax from our Mega financial model and inputted our previous tax and royalty assumptions, which are as follows:
  • A federal tax rate of 30%
  • A Western Australia royalty (on gross uranium sales)of 2.5%.
After incorporating our tax and royalty assumptions into our financial model, our MGA NAV increases to CDN$1.27/share from $1.08. . .after rounding up, our new target price becomes CDN$1.30/share from CDN$1.10. We believe the revision of the proposed mineral resource tax is a very positive development for Mega Uranium, given that implementation of the previous version could have resulted in Mega's JV partners, JAURD and ITOCHU Corp., walking away from Lake Maitland. . .the change in the stance of the Australian government removes a significant hurdle to the project."

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