Record quarterly production, a promising new project, and surging global demand for nuclear energy is injecting renewed excitement for the prospects of Paladin Energy.

-Paladin Energy posts record September quarter production
-Grades at Langer Heinrich set to step up
-World class asset in Patterson Lake South
-Green energy transition and AI growth driving nuclear demand

By Greg Peel

The price of uranium has endured a rollercoaster ride in the twenty-first century. From the depths of the post-Chernobyl era, the uranium price surged to over US$130/lb in 2007 as the world began to wake up to climate change and nuclear energy was seen as a great saviour.

It was a 'bubble' fit to burst, and a year later the price was back around US$30/lb. Another attempt to rally was then thwarted by the Fukushima disaster, which sent the price back down below US$20/lb, when nuclear was once again a dirty word.

Thereafter, another rally, led by financial entities stockpiling physical uranium, another bubble, and another burst. But, yet again, the uranium price has been on the rise in 2025, currently around US$82/lb.

The share price of Australian-listed uranium miner Paladin Energy ((PDN)) has tracked a similar path over the period. Historically, Paladin shares peaked at $10 back in 2007, but corrected for a 1-for-10 consolidation in 2024 historical charts now put that peak at the equivalent of $100.

The share price post consolidation is back near $10 today, but that is, effectively, still -90% down from the prior peak.

What is driving the uranium price and the share prices of uranium miners now?

Demand for uranium is likely to double over the next decade, Shaw and Partners points out. Nuclear reactors are being restarted, AI/data centre demand for energy is surging, governments around the world (with one notable exception) have realised nuclear is a vital part of decarbonising power grids, insatiable Chinese energy consumption is driving the fastest nuclear rollout in history, and the US has hit the nuclear accelerator to power its AI arms race with China.

On the supply-side, the world’s two largest uranium miners –-Canada’s Cameco and Kazakhstan’s Kazatomprom-– have recently lowered production guidance. At the same time, ramp-ups from mining juniors have simply not progressed as expected.

Amidst this demand/supply imbalance, and having to shutter its two producing mines post-Fukushima (ultimately selling one and selling a stake in the other), Paladin has re-emerged as a globally significant uranium producer.

Record Quarter

Paladin saw a solid operational September quarter result from its flagship Langer Heinrich mine in Namibia, achieving record U3O8 production of 1.07mlb, consistent with management guidance and consensus. Unit costs of US$41.6/lb were impressive, Ord Minnett suggests, though below consensus, as mining volumes increased 63% quarter on quarter to 5.3mt.

Sales volumes were the only blemish at 533klb, a big miss to consensus of 908klb, however, uranium sales are typically lumpy, Shaw notes, and a shipment delayed in the September quarter has been pushed into the December quarter. Paladin has also received a US$30m pre-payment for a shipment scheduled this quarter.

Paladin is beginning to demonstrate steady, reliable production at Langer Heinrich, Bell Potter suggests, which bodes well for building confidence in management’s forward guidance. Repeating the performance of the June quarter FY25 into the first half of FY26 creates a platform for the miner to hit the upper end of its 4.0-4.4mlbs production guidance, with increased mining rates expected over the second half.

The plant is continuing to be predominantly fed by the previously stockpiled ore with feed grade in the quarter of 477ppm, in line with the June quarter. Once the plant is fed with fresh ore in 2026, Shaw expects production to step up. Paladin is not disclosing the grade of the material it will be initially mining, but it should be higher than the current stockpiles, Shaw believes.

The Langer Heinrich plant recovery is continuing to run in the high 80%s (86% in the September quarter). The plant never ran this well historically, Shaw notes, with recoveries down in the 60s/70s. The better performance is due to the plant enhancements that were made as part of the post-Fukushima restart; particularly adding surge capacity between the front end and the leach circuit.

With the balance sheet bolstered in the wake of a September equity raise, the focus for UBS remains the ramp-up of Langer Heinrich to nameplate in FY27 as well as advancing Paladin’s Patterson Lake South (PLS) project through to FID (final investment decision) against an improved commodity backdrop.

The PLS project is a world class asset, which adds an additional 11mlb U3O8 on Ord Minnett’s numbers by FY33. But it does face risks (eg lengthy approvals and high capex).

Pricing

In Macquarie’s view, the marginal greenfield projects in the current market are the lower grade pre-FID Namibian projects Tumas and Etango.

Macquarie believes these projects may require US$85/lb floor pricing in market-related contracts, which was the broker’s prior long-term price assumption, still needing to lift beyond the current US$70-75/lb level indicated by industry.

Macquarie has raised its long-term uranium price forecast to US$95/lb, a level that allows for an adequate rate of return for investors in these marginal projects when all costs are considered.

Nuclear's expanding role in global energy and the AI race will require significant investment in new uranium mines, Macquarie notes. With a largely exhausted restart queue and production challenges at major producers, contract floors should lift to incentive levels for the two new Namibian projects.

It would be remiss to ignore the increased focus placed on western critical minerals availability (such as rare earths), UBS suggests, and ask whether uranium should be included in this basket of commodities,  acknowledging the supply concentration into less accessible jurisdictions uranium exhibits, as well as (Western) conversion/enrichment bottlenecks.

While there is perhaps more work as it relates to this particular thematic, UBS is still incrementally positive on the commodity outlook from a traditional demand-supply perspective, with increased US/Western policy support for nuclear combining with continued supply disappointments.

One Bad Apple

Of the seven brokers monitored daily by FNArena covering Paladin Energy, all bar one have a Buy or equivalent rating on the stock, chorusing a preferred sector exposure.

Ord Minnett retains a view that Paladin is perhaps the highest-quality ASX-listed uranium stock for long-term capital growth linked to future nuclear energy demand. But despite the stock’s more than 100% rally in the past six months, spot uranium prices have only risen from US$67/lb to US$82/lb (22%).

Term prices have lifted even less so, by 4% to US$83/lb. Ord Minnett estimates the movement in the spot price may only translate to an 8% gain on Langer Heinrich’s average realised price (from US$65/lb to US$70/lb). In the broker’s view, this does not warrant a doubling of the share price.

Ord Minnett considers Paladin’s recent $300m capital raise to accelerate the development of PLS may have excited investors given some of its common features with NexGen Energy’s ((NXG)) Rook I project. Hence, the higher multiple.

Ord Minnett considers investors must be prepared to take a much longer than twelve-month investment horizon to capture the value of this project, and invest at these higher prices, and has cut its target price to $7.50 from $7.60, downgrading to Sell from Hold.

The next lowest target among the six brokers rating Buy is $9.00 (Citi and UBS). The highest is Bell Potter’s $11.35, up from $$10.30 prior to the quarterly report.

The consensus target price among the seven brokers is $9.71. Ex-Ord Minnett, that rises to $10.08.

Outside of the seven, Canaccord Genuity has a Buy rating and $12.50 target.

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FNArena is proud about its track record and past achievements: Ten Years On

Junior miner Pantoro Gold has repaired its balance sheet, swung to positive cash flow and offers compelling reserve and grade upside at its Norseman project. But is it too late to invest?

-Pantoro Gold swings to cash flow positive in FY25
-Balance sheet fixed and capital structure simplified
-Norseman offers above-guidance upside in reserves and grade
-Gold mining stocks have run hard in recent months

By Greg Peel

Pantoro Gold ((PNR)) operates its 100%-owned, high-grade Norseman Gold Project, located 180km south of Kalgoorlie in Australia’s premier mining jurisdiction.

A proven gold province with 5.5Moz of historical production since 1935, Norseman currently hosts multiple open-pit and underground operations, alongside numerous high-grade lodes yet to be mined at depth and along strike.

Pantoro reported an FY25 financial result last month that delivered substantial year on year growth across all key financial metrics, including a $112m turnaround from a -$46m loss in FY24 to $66m profit in FY25. Compared with Bell Potter’s forecasts, revenue was slightly lower on the treatment of gold call option deliveries; in-line for earnings, and lower for profit on the broker’s under-estimation of D&A and corporate costs.

Pantoro finished FY25 with $176m in cash and bullion, no debt and minimal hedging in place (6% of forecast FY26 production). FY26 guidance is unchanged 100-110koz at cost of $1,950-2,250/oz, which implies higher production and lower costs compared with FY25 (84.6koz at $2,261/oz).

Based on the USD gold price and AUDUSD exchange rate at the time of writing, the AUD gold price was $5882.90.

The highlight of the result, in Bell Potter’s view, was Pantoro’s improved financial performance, strengthening of its balance sheet and simplification of its capital structure. This included the closure of its US$12.5m convertible debt facility and a 1:17 share consolidation.

Pantoro delivered substantial earnings margin expansion, lifting from 11% in FY24 to 55% in FY25. Bell Potter forecasts this to increase to 65% in FY26.

Free cash flow turned from a -$12m outflow in FY24 to $78m cash generation in FY25. Pantoro continues to guide to a medium-term aspirational production target of 200kozpa-plus, predicated on filling the mill to 1.4Mtpa with high grade ore of 4.5g/t Au.

Reserves

Last month Pantoro released its annual Mineral Resources & Ore Reserves (MROR) estimates.

Group inventory has remained broadly unchanged year on year, Moelis notes, once adjusted for the miner’s divestment of its Halls Creek asset. The uplift in gold price assumptions (A$1,400/oz above last year) has served to partially offset depletion.

While the net outcome from the release is effectively neutral, Moelis notes Pantoro hasn't really had the opportunity (yet) to significantly drill across the portfolio with the specific intention of resource conversion.

Moelis sees material opportunity to progressively convert the company’s sizeable underground resource base into reserves, but this will require both time and capital, with the prospect of a meaningful lift in reserve grades (and ultimately feed grades) further down the track.

Moelis would hope to see a step change in the MROR update in 12 months' time following a material uplift in exploration spend/activity. 

Compelling

Morgans has calculated a base case net asset value for Pantoro of $1,638m based on assumed production growth delivered via an uplift in head grade. The broker expects Pantoro may beat its FY26 production forecasts as mining rates and grade increase.

Norseman has the ingredients for a lucrative future, Morgans suggests, being infrastructure rich and cashflow positive. This broker models average annual earnings of $267m and an earnings margin in excess of 50% over the next eight years.

Following a ramp-up of operations, Pantoro is beginning to hit its straps operationally, Morgans believes. Given the historical production head grade, high grade resource inventory and encouraging drilling, this broker’s base case assumes an ongoing lift in head grade to 3.5g/t Au by FY29 -- growing production to more than 150kozpa.

The company’s debt has been extinguished, ownership consolidated, and cash reserves are building, which Morgans thinks materially de-risks a balance sheet that historically has been a challenge for the business.

Shut the Gate?

By end-September, the USD gold price had risen 11% for the month and 47% in 2025 to date. Investors are typically slow to get onto a commodity price-based rally, but have recently rushed into gold mining stocks as the gold price has continued to soar. The issue is as to whether valuations have now overshot.

Moelis recently downgraded its investment view on Pantoro to a Hold rating from Buy on valuation grounds following the stock’s 73% rally in just three months. While the business is in solid shape, a rating upgrade would require either greater conviction in the peak production profile or a sustained further leg-up in gold prices, Moelis suggests.

On the broker’s numbers, spot pricing implies a valuation of $5.80/share, suggesting the stock is fully valued at current levels, while under the same scenario (spot) peers retain upside.

Bell Potter last month upgraded its rating on Pantoro to Hold from Sell and raised its price target to $5.35 from $4.40, but qualified that while operational delivery is improving and the pathway to this objective is becoming clearer, there is a risk the market is pricing some of this growth in ahead of time.

In initiating coverage of Pantoro Gold, Morgans has set a Hold rating with a discounted cash flow-based price target of $5.33. With the Norseman gold project wholly consolidated, and with no hedging or debt, Morgans thinks Pantoro is positioned to realise solid free cash flow while establishing access to high grade mining areas.

 Pantoro appears to have turned a corner operationally and Morgans sees upside to FY26 guidance given recent performance. However, in Morgans’ view, the recent stock price rally has somewhat diminished short-term upside.

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FNArena is proud about its track record and past achievements: Ten Years On