Weekly Reports | Dec 24 2024
This story features DEEP YELLOW LIMITED, and other companies. For more info SHARE ANALYSIS: DYL
The U308 spot price market faded last week with reticent buyers depressing the price for eager sellers. Activity levels remain subdued.
-Geo-politics and trade tensions are rising
-U308 spot market disconnect from term markets
-Uranium stocks remain undervalued, analysts assure
By Danielle Ecuyer
Geo-politics on the radar in 2025
There is growing concern geopolitics and “jurisdictional” issues could impact uranium supplies, reports industry consultant TradeTech.
Another delay in the loading and shipment of enriched uranium from the Russian St Petersburg port reaffirms the change in Russia’s export policy in November. All shipments of enriched uranium product to the US are banned without an export exception, requiring an exception license issued by the Russian Federal Service for Technical and Export Control.
Equally, uranium supplies outside the US could face import tariffs under the Trump administration. TradeTech points to the evolving price differences between uranium delivered to Orano in France and Cameco’s facility in Canada versus Honeywell’s ConverDyn facility in the US.
Spot price operating in a disconnected state
Despite the concerns and emerging price differentials, the TradeTech U3O8 spot price fell last week, dropping by -US$4.50/lb to US$72/lb, registering a decline of -13% in the last five weeks and down -20% over the last year.
Buyers were in the driver’s seat again during the past week. TradeTech noted one transaction at the start of the week at US$76/lb. Two days of no turnover followed, with sellers continuing to offer lower prices. Buyers entered the market on Thursday, and transactions were conducted at US$74/lb and US$73/lb, before the consultant’s indicated U3O8 spot price fell to US$72/lb with one final transaction for the week.
The TradeTech Mid-Term U3O8 price indicator stands at US$83/lb, and the Long-Term price indicator at US$82/lb.
The consultant observes more resilience in the long-term uranium price compared to the spot price, highlighting several utilities either considering or agreeing to purchase agreements out to 2030 and beyond.
One utility selected a supplier for material deliveries starting in 2029. A non-US utility seeking a load of enriched uranium for December or January delivery is still negotiating with suppliers.
Corporate News
In corporate news, Deep Yellow ((DYL)) announced an 18% increase in the Tumas Project ore reserve, as well as an extension of the life of its mine. The uplift results in a maximum production rate of 4.2mt per annum of 3.6mlbs U3O8.
Aura Energy ((AEE)) gained attention for increasing its proven and probable ore reserves by 49% to 33.6mlbs contained U3O8. This year’s drilling program confirmed 64% of the company’s production target is now within the proven and probable reserves, further reducing project risk.
A final investment decision is expected in 2025, with operations commencing in 2027.
“The updated ore reserve estimate is another strong validation of the robust nature of the Tiris Project. Building on the significant 55% increase in the mineral resource estimate announced in June 2024, the updated reserve estimate has increased by a further 49%,” stated Managing Director Andrew Grove.
Paladin Energy ((PDN)) received final regulatory clearance for the proposed acquisition of Fission Uranium under the Investment Canada Act. Canaccord Genuity notes the transaction will result in a combined entity possessing the third-largest resource (among globally listed companies) with a high-growth pipeline, lower cost of funding, and long-term optionality. The broker notes the outcome was anticipated and retains a target price of $15.20 with a Buy rating.
Citi views the decision as positive for Paladin, raising the target price to $13.50 from $11.50. The stock is believed to offer value at current levels. Morgan Stanley also views the approval positively, retaining a Buy-equivalent rating and a $10.50 target price.
Macquarie raised the life-of-mine forecast costs for Boss Energy‘s ((BOE)) Honeymoon project to US$27/lb from US$19/lb due to higher inflation across labour, power, and reagents, with the latter having the most significant impact, with circa 50% inflation factored in.
The broker highlights Honeymoon is running over the capex budget, with an estimated spend of -US$46m in FY25 and -US$32m in FY26, excluding Alta Mesa. Macquarie now forecasts a net loss in FY25 and lowers the FY26 net profit forecast by -16%. The target price decreases by -2% to $4.50. No change to the Buy-equivalent rating.
Goldman Sachs views a positive macro backdrop for nuclear energy with the contracting and planning stages of a nuclear renaissance, underpinned by growth in demand for low-carbon energy.
This broker’s US energy team highlights the three processes for uranium feed-stock supply: uranium production, uranium conversion, and uranium enrichment. Europe and the Americas supply 30% of production, have 56% of uranium conversion capacity, and 41% of uranium enrichment capacity. China, Russia, and Kazakhstan account for 46% of uranium supply, 44% of conversion, and 59% of enrichment capacity.
Given the long lead times to develop uranium enrichment capacity, over 10 years, Goldman Sachs envisages potential supply shortages, particularly with Russian export restrictions.
As of December 16, Paladin Energy remained the most shorted stock on the ASX at 16.45%, with Boss Energy second at 16.4%, compared to 16.03% and 14.24% one week prior.
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| 1AE | 20/12/2024 | 0.0500 | 0.00% | $0.19 | $0.03 | |||
| AEE | 20/12/2024 | 0.1400 |  – 9.68% |
$0.31 | $0.11 | |||
| AGE | 20/12/2024 | 0.0300 | -10.81% |
$0.08 | $0.03 | $0.100 |  233.3% |
|
| AKN | 20/12/2024 | 0.0100 | 0.00% | $0.05 | $0.01 | |||
| ASN | 20/12/2024 | 0.0600 | – 3.51% |
$0.17 | $0.05 | |||
| BKY | 20/12/2024 | 0.3500 | 9.38% |
$0.45 | $0.26 | |||
| BMN | 20/12/2024 | 2.6900 | – 7.67% |
$4.87 | $1.90 | $7.400 | 175.1% |
|
| BOE | 20/12/2024 | 2.3200 | – 5.00% |
$6.12 | $2.21 | 22.4 | $3.825 | 64.9% |
| BSN | 20/12/2024 | 0.0160 | 6.67% |
$0.21 | $0.02 | |||
| C29 | 20/12/2024 | 0.0900 | 0.00% | $0.13 | $0.06 | |||
| CXO | 20/12/2024 | 0.0800 | – 1.20% |
$0.27 | $0.08 | $0.090 | 12.5% |
|
| CXU | 20/12/2024 | 0.0100 | 0.00% | $0.06 | $0.01 | |||
| DEV | 20/12/2024 | 0.0890 | – 2.20% |
$0.45 | $0.09 | |||
| DYL | 20/12/2024 | 1.1300 | -12.60% |
$1.83 | $0.91 | -59.7 | $1.900 | 68.1% |
| EL8 | 20/12/2024 | 0.2600 | – 3.57% |
$0.68 | $0.23 | |||
| ERA | 20/12/2024 | 0.0020 | -33.33% |
$0.08 | $0.00 | |||
| GLA | 20/12/2024 | 0.0100 | 0.00% | $0.04 | $0.01 | |||
| GTR | 20/12/2024 | 0.0030 | 0.00% | $0.02 | $0.00 | |||
| GUE | 20/12/2024 | 0.0600 | 0.00% | $0.18 | $0.05 | |||
| HAR | 20/12/2024 | 0.0400 | 0.00% | $0.28 | $0.03 | |||
| I88 | 20/12/2024 | 0.6100 | 30.61% |
$1.03 | $0.14 | |||
| KOB | 20/12/2024 | 0.0800 | 0.00% | $0.18 | $0.07 | |||
| LAM | 20/12/2024 | 0.7700 | 0.00% | $1.04 | $0.48 | |||
| LOT | 20/12/2024 | 0.1800 | – 7.69% |
$0.49 | $0.17 | $0.547 | 203.7% |
|
| MEU | 20/12/2024 | 0.0400 | – 2.63% |
$0.06 | $0.04 | |||
| NXG | 20/12/2024 | 11.2400 | – 6.26% |
$13.66 | $7.89 | $16.600 | 47.7% |
|
| OAR | 20/12/2024 | 0.0400 | 0.00% | $0.04 | $0.01 | |||
| ORP | 20/12/2024 | 0.0400 | 0.00% | $0.12 | $0.03 | |||
| PDN | 20/12/2024 | 7.9100 | 1.84% |
$17.98 | $6.83 | 39.4 | $11.880 | 50.2% |
| PEN | 20/12/2024 | 1.2500 | 14.55% |
$1.26 | $0.05 | $4.800 | 284.0% |
|
| SLX | 20/12/2024 | 4.8300 | – 9.54% |
$6.74 | $3.35 | $7.200 | 49.1% |
|
| TOE | 20/12/2024 | 0.2200 | 0.00% | $0.70 | $0.19 | |||
| WCN | 20/12/2024 | 0.0200 | 17.65% |
$0.03 | $0.01 |
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For more info SHARE ANALYSIS: AEE - AURA ENERGY LIMITED
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