Weekly Reports | Oct 24 2023
This story features PALADIN ENERGY LIMITED. For more info SHARE ANALYSIS: PDN
After a brief hiatus, the spot uranium price rose strongly last week.
-Uranium buyers return ahead of a seminar
-EU increases purchases, shunning Russia
-Paladin Energy takes its next step
By Greg Peel
Three weeks ago the spot uranium price finally hit a blow-off top and retreated after a stellar run. Buyers remained reluctant two weeks ago, but that all changed last week.
Traders, utilities and speculators moved in to take industry consultant TradeTech’s weekly spot price indicator up US$3.50 to US$73.00/lb.
TradeTech puts the renewed interest down to a scramble ahead of this week’s International Uranium Fuel Seminar being held by the Nuclear Energy Institute in Charlotte, North Carolina.
It is typical for activity to pick up ahead of such a gathering – and for the nuclear industry there are several throughout each year – before going quiet during the gathering and picking up pace again thereafter.
Last week, buyers displayed interest in securing material over the next several months and stretching beyond the spot window into the March quarter 2024. Sellers responded to the new demand by raising offer prices for each successive sales opportunity. As a result, prices for material in both the spot and mid-term delivery windows rose.
Several transactions calling for delivery in the March quarter were concluded last week. Prices in these transactions ranged from US$70.75 to US$72.00/lb U3O8.
TradeTech will update its term price indicators at month’s end which for now sit at US$73.50/lb (mid) and US$62.00/lb (long).
Europe Steps Up Purchases
The Euratom Supply Agency recently published its Annual Report for 2022, which examines trends in nuclear fuel production, requirements, and contracting in the EU. The latest edition forecasts a 2% increase in gross annual average natural uranium requirements over the next ten years compared to the outlook in last year’s report.
TradeTech notes EU inventories have declined by -21% since 2018, however EU utilities purchased more material in 2022 than the total quantity loaded into reactors, reversing a long-standing trend.
The increase was accompanied by a notable shift in origin of supply. Imports from Russia declined -16%.
Imports of uranium from Canada into the EU climbed 50% in 2022 compared to 2021, while imports from Kazakhstan, the world’s leading uranium producer for the past several years, increased by 14%. Imports from Uzbekistan, the world's fifth largest producer, increased 171%.
Paladin Eyes The Future
Australian-listed Paladin Energy ((PDN)) last week announced the restart of its Langer Heinrich uranium mine in Namibia is 80% complete, on time for the March quarter 2024 and on budget. The company also has plenty of cash.
With Langer Heinrich set to be up and running shortly, and offtake agreements already in place, what’s next for Paladin?
The company has announced it has moved to 100% ownership of the Michelin Uranium Project in Labrador, Canada. This now clears the way for Paladin to advance the project and stockbroker Shaw and Partners expects the company to move relatively quickly.
After re-engaging with First Nations groups, the first step is likely to be a refresh of the 2009 Preliminary Economic Assessment in the form of an updated Pre-Feasibility Study to be released in early 2024.
Michelin is likely to become a key growth asset, the broker suggests.
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| 1AE | 20/10/2023 | 0.1100 |  20.00% |
$0.24 | $0.05 | |||
| AGE | 20/10/2023 | 0.0500 | 0.00% | $0.07 | $0.03 | $0.080 | 60.0% |
|
| BKY | 20/10/2023 | 0.3500 | 3.03% |
$0.80 | $0.26 | |||
| BMN | 20/10/2023 | 2.7600 | 6.23% |
$3.05 | $1.19 | $3.200 | 15.9% |
|
| BOE | 20/10/2023 | 4.4700 | 3.49% |
$4.98 | $1.97 | 49.5 | $4.543 | 1.6% |
| DYL | 20/10/2023 | 1.3900 | 8.24% |
$1.41 | $0.48 | $1.840 | 32.4% |
|
| EL8 | 20/10/2023 | 0.4200 | 2.44% |
$0.59 | $0.27 | |||
| ERA | 20/10/2023 | 0.0330 | 0.00% | $0.30 | $0.03 | |||
| LOT | 20/10/2023 | 0.2100 | 4.88% |
$0.29 | $0.15 | $0.530 | 152.4% |
|
| NXG | 20/10/2023 | 8.9500 | 3.89% |
$10.40 | $5.11 | |||
| PDN | 20/10/2023 | 0.9500 | 1.56% |
$1.15 | $0.52 | 158.0 | $1.165 | 22.6% |
| PEN | 20/10/2023 | 0.1200 | 4.35% |
$0.20 | $0.09 | $0.270 | 125.0% |
|
| SLX | 20/10/2023 | 3.2200 | 0.64% |
$5.32 | $2.56 | $5.800 | 80.1% |
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