Weekly Reports | Jun 06 2023
This story features PALADIN ENERGY LIMITED. For more info SHARE ANALYSIS: PDN
While transaction volume remains low, spot, mid-term and long-term uranium prices all continue to move higher.
-Uranium term prices take a leg up
-US aspires to nuclear leadership
-Paladin’s false alarm
By Greg Peel
As uranium has in past years become a financial investment as well as a source of energy, last week the spot uranium price gained a financial boost from the resolution of the US debt ceiling, along with stock and other commodity markets.
Volumes were again minimal nonetheless. TradeTech’s weekly spot price indicator rose US$1.10 to US$55.60/lb.
The increase occurred on transactions concluded in the first two days of June. TradeTech’s price indicator as at end-May remained at US$54.50/lb, up from $53.75/lb as at end-April.
Expectations for additional demand to emerge from the financial sector have been coupled with predictions of a rise in the uranium spot price, TradeTech notes. However what has materialised is a subdued spot market characterised by lower transaction volumes and a relatively minor price increase.
Still, heightened concerns among market participants around jurisdictional risk appear to be setting the stage for increased spot market activity in the future, and are already creating ripples throughout the rest of the nuclear fuel cycle.
TradeTech's mid- and long-term price indicators for uranium, conversion, and enrichment all saw upticks in May, as a result of higher demand and concerns centered largely around evolving legislation aimed at banning Russian nuclear exports into the US after 2028.
TradeTech’s mid-term price indicator has risen to US$59.00/lb from US$54.00/lb at end-April and its long-term indicator to US$55.00/lb from US$54.00/lb.
Aspiration
Last week the US Senate Environment and Public Works Committee passed legislation that would help position the US as the “undisputed international leader for nuclear energy technologies”.
The Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy Act of 2023 aims to facilitate American nuclear leadership, advance new nuclear technologies while preserving existing capacity, and improve US Nuclear Regulatory Commission efficiency.
The Americans had allowed the Russians and Chinese to get ahead.
Paladin Energy
Paladin Energy ((PDN)) is considered by brokers to be one of the best Australian-listed investments for an anticipated upswing for the uranium price over time as demand exceeds supply. The company’s 75%-owned Langer Heinrich mine in Namibia is on track for restart in the March quarter 2024.
Last week brought news the Namibian government is considering taking minority stakes in mining projects in the country. The result was a rapid de-rating of shares in Paladin of some -20%.
Paladin management initially announced it had not learned of any legislative changes in Namibia, and brokers pointed out any such move on the government’s part would not involve existing projects. The stock rallied, and rallied again on the government’s subsequent clarification, to regain all losses.
“…the government has no intention to seize any stake from existing mineral or petroleum licence holders and remain committed to uphold the sanctity of contract.”
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| AGE | 05/06/2023 | 0.0360 |  12.50% |
$0.08 | $0.03 | |||
| BKY | 05/06/2023 | 0.4350 |  – 8.42% |
$0.50 | $0.25 | |||
| BMN | 05/06/2023 | 1.4100 | 11.02% |
$2.49 | $0.21 | |||
| BOE | 05/06/2023 | 3.0900 | 10.75% |
$3.11 | $1.61 | $3.310 | 7.1% |
|
| DYL | 05/06/2023 | 0.6800 | 17.24% |
$1.25 | $0.48 | $1.040 | 52.9% |
|
| EL8 | 05/06/2023 | 0.3300 | 13.79% |
$0.64 | $0.27 | |||
| ERA | 05/06/2023 | 0.0300 | – 3.23% |
$0.30 | $0.03 | |||
| LOT | 05/06/2023 | 0.1950 | 14.71% |
$0.30 | $0.15 | $0.350 | 79.5% |
|
| NXG | 05/06/2023 | 6.7000 | 13.56% |
$7.33 | $0.00 | |||
| PDN | 05/06/2023 | 0.6700 | 25.23% |
$0.96 | $0.52 | -19.7 | $1.097 | 63.7% |
| PEN | 05/06/2023 | 0.1850 | 19.35% |
$0.22 | $0.12 | $0.340 | 83.8% |
|
| SLX | 05/06/2023 | 4.1000 | 9.92% |
$5.32 | $1.55 | $5.000 | 22.0% |
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