Weekly Reports | May 14 2024
This story features NEXGEN ENERGY LIMITED. For more info SHARE ANALYSIS: NXG
NexGen Energy's convertible nuclear deal stole the show in a week that saw market enthusiasm evaporate by Friday.
By Rudi Filapek-Vandyck
Uranium is experiencing its second Grand Bull Market in thirty years, with the first one sizzling out post 2007.
To fully appreciate the ups and downs, and the gains enjoyed thus far into this second awakening, we've included an historical price chart from industry consultant TradeTech. FNArena's weekly price graphic near the bottom of this story only shows a limited flash-back.
Last week, TradeTech's weekly U3O8 spot price started off on firm footing as traders got excited about the US Senate -finally- passing the Prohibiting Russian Uranium Imports Act (H.R. 1042), which is aimed at barring uranium imports from Russia.
The bill was officially sent to the White House on May 9 and President Joe Biden is expected to sign off on the new law soon. The bill contains multiple softening waivers, plus there has been no retaliation from Russia, as some might have expected.
TradeTech reports initial enthusiasm saw spot U3O8 rise to US$93.95/lb but sentiment quickly soured and by the end of the week buyers and sellers settled for US$90.75/lb, down -US$1.40 from the week prior. At that price, market participants were able to reach agreement on 100,000 pounds U3O8 to be delivered at Comuhex's facility in France in July.
TradeTech also reports a purchase of 50,000 pounds at US$91/lb, also for delivery in July.
NexGen Energy's Convertible Deal
The week's eye-catching transaction was executed by NexGen Energy ((NXG)). The company, listed in Toronto, in New York and on the ASX, signed a binding agreement with MMCap International for the purchase of circa 2.7m pounds U3O8 for an aggregate purchase price of US$250m through unsecured convertible debentures that will be convertible at the holder's option into common shares of the company.
Excluding the NexGen Energy transaction, TradeTech reports the week's volume accumulated to 11 transactions totalling 1 million pounds U3O8. The consultant's mid-term price indicator currently sits on US$95/lb, with the long-term equivalent on US$80.00/lb.
Even though spot uranium peaked above US$100/lb in January, the average spot price thus far in 2024 at US$94.46 per pound U3O8 is still 55% above the 2023 average of US$60.88/lb.
TradeTech has compiled its own global Stockwatch selection of listed uranium companies and that list was up an average of 1.73% last week from the week prior. FNArena's selection, which is limited to ASX-listed stocks, shows a more negative bias, see below.
Some of FNArena's recent sector updates provide more details and background about the US's (intention of) boycotting nuclear fuel imports from Russia:
–https://fnarena.com/index.php/2024/05/07/uranium-week-finally-a-ban/
–https://fnarena.com/index.php/2024/04/30/uranium-week-nuclear-power-and-ai/
–https://fnarena.com/index.php/2024/04/23/uranium-week-from-russia-without-love/
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| 1AE | 13/05/2024 | 0.0800 |  -11.11% |
$0.19 | $0.05 | |||
| AGE | 13/05/2024 | 0.0600 | – 3.13% |
$0.08 | $0.03 | $0.100 |  66.7% |
|
| BKY | 13/05/2024 | 0.4000 | 23.29% |
$0.80 | $0.26 | |||
| BMN | 13/05/2024 | 4.3900 | – 4.05% |
$4.78 | $1.19 | $7.400 | 68.6% |
|
| BOE | 13/05/2024 | 5.6700 | 1.25% |
$6.12 | $2.58 | 57.7 | $5.425 | – 4.3% |
| DYL | 13/05/2024 | 1.6500 | – 0.60% |
$1.76 | $0.53 | $1.770 | 7.3% |
|
| EL8 | 13/05/2024 | 0.5200 | – 1.85% |
$0.68 | $0.27 | |||
| ERA | 13/05/2024 | 0.0500 | – 9.26% |
$0.08 | $0.03 | |||
| LOT | 13/05/2024 | 0.4500 | – 5.26% |
$0.48 | $0.17 | $0.660 | 46.7% |
|
| NXG | 13/05/2024 | 11.0300 | -17.42% |
$13.66 | $5.78 | $17.500 | 58.7% |
|
| PDN | 13/05/2024 | 16.3600 | – 2.89% |
$17.00 | $5.15 | -335.2 | $16.470 | 0.7% |
| PEN | 13/05/2024 | 0.1200 | – 4.17% |
$0.20 | $0.08 | $0.310 | 158.3% |
|
| SLX | 13/05/2024 | 6.0300 | 1.35% |
$6.24 | $2.92 | $7.600 | 26.0% |
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