Shares in Energy Resources of Australia (ERA) lost more than 48 per cent of their value – the death spiral?

ERA shares in death spiral as prospects slashed, SMH, June 15, 20 Peter Ker The uranium miner operating beside Kakadu National Park may have zero chance of restarting mining at the site, according to UBS analyst Glyn Lawcock.

Speaking after shares in Energy Resources of Australia (ERA) lost more than 48 per cent of their value on Friday, Mr Lawcock said the decision to abandon plans for an expansion of the Ranger mine warranted a downgrading of the stock to a “sell” rating.

Many ERA shareholders were doing just that on Monday, with the stock falling a further 25.4 per cent or 17¢ to close at 50¢.

ERA shares were worth $1.29 at market close on Thursday, prior to ERA announcing that it would not go ahead with an underground expansion at the Ranger mine. That expansion, called “Ranger 3 Deeps”, was the only chance of future mining at Ranger, where mining of the third pit ceased in 2011……

Rio Tinto has offered to cover the shortage of funds to complete the rehabilitation, but it is believed that offer is conditional on ERA ruling out any further development at Ranger, something ERA is not yet willing to do……

The funding shortfall for the rehabilitation is believed to be close to $200 million, although Mr Drew speculated it could be as high as $500 million.

Uranium prices have been depressed since the Fukushima nuclear meltdown in March 2011, and that weakness was one of the major reasons why the underground expansion was abandoned….http://www.smh.com.au/business/mining-and-resources/era-shares-in-death-spiral-as-prospects-slashed-20150615-gho6jg.html

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