Uranium Week: From Russia Without Love

Weekly Reports | Apr 23 2024

This story features BOSS ENERGY LIMITED, and other companies. For more info SHARE ANALYSIS: BOE

A global conference kept the uranium spot market quiet last week, but concerns continue to fester as to just when sanctions will be placed on Russian imports.

-Conference keeps uranium spot market quiet
-No new news from Kazakhstan
-Biden bemoans Russian imports
-Boss Energy produces first uranium

By Greg Peel

As anticipated, the uranium spot market was quiet last week as market participants attended the World Nuclear Fuel Cycle conference hosted by the World Nuclear Association and the Nuclear Energy Institute in Kazakhstan.

It was hoped the location would allow further detail on Kazatomprom’s production issues and perhaps more distinct production guidance for 2024 and 2025.

Kazakhstan produces some 40% of global uranium supply and Kazatomprom has been facing production issues. Back in February, Kazatomprom revealed it would likely miss its initial 2024 and 2025 production targets due to challenges with sulphuric acid deliveries and wellfield development.

It appears nothing new was learned on that front at the conference. Tumbleweeds rolled through the spot market, and industry consultant TradeTech’s weekly spot price indicator remained unchanged at US$90.00/lb.

In the meantime, last Friday President Biden, in his address at the IBEW Construction and Maintenance Conference, called out nuclear power as the biggest source of clean energy. He went on to say that “For too long, we’ve relied on imported uranium to power nuclear reactors — imports from places like Russia…”

These comments echo sentiments expressed by US Congressional members who have supported bipartisan legislation restricting future imports of Russian nuclear fuel into the US. Yet utilities in the US and around the world have been holding their breath waiting for such sanctions to be imposed ever since Russia invaded Ukraine over two years ago, and nothing has been forthcoming.

A fortnight ago the US Treasury issued an executive order prohibiting the import into the US of Russian copper, aluminium and nickel. Utilities remain concerned a ban on uranium must, eventually, follow.

Such a concern has for the past two years steeled utilities’ resolve to find alternative sources for uranium supply, and a rush to secure requirements has led to higher term market prices.

Last week saw one transaction completed in the term markets, for delivery of material in December at US$92.00/lb U3O8. In addition, two other off-market transactions were recorded for delivery outside the spot delivery window.

TradeTech’s term price indicators remain at US$95/lb (mid-term) and US$80/lb (long).

Who’s the Boss?

Australian uranium miner Boss Energy ((BOE)) last week announced it has produced its first drum of uranium at its Honeymoon mine in South Australia. Management noted the uranium concentrate grade produced is exceeding feasibility study estimates. The company also highlighted it is looking to accelerate plans to increase the production rate and mine life at Honeymoon.

While production has begun a few weeks later than previously flagged, analysts are none too concerned. All agree this is a key milestone for the company.

Production ramp-up at Honeymoon to 2.45mlbpa and 1.5mlb at its Alta Mesa project in Texas will see Boss Energy’s attributable production ramp up to 3.0mlb pa over the next three years. First production from Alta Mesa is expected in the first half of 2024. Boss also has strategic inventory of 1.25mlb which is valued at US$110m (at US$88/lb) and was purchased for US$37m in early 2021.

Brokers monitored by FNArena covering Boss Energy have three Buy or equivalent ratings on Boss Energy and two Hold – the two Holds largely being a short-term valuation call.

Another Australian miner soon to restart production – Paladin Energy – attracts six from six Buys.

In other news, mining giant BHP Group’s ((BHP)) March quarter production at its polymetallic Olympic Dam mine in South Australia included 2.2mlbs of U3O8, up close to 4% year on year.

Uranium companies listed on the ASX:

1AE 22/04/2024 0.0900 0.00% $0.19 $0.05
AGE 22/04/2024 0.0520 – 8.77% $0.08 $0.03 $0.100 92.3%
BKY 22/04/2024 0.3400 0.00% $0.80 $0.26
BMN 22/04/2024 3.7500 4.46% $4.16 $1.19 $7.400 97.3%
BOE 22/04/2024 4.7600 2.15% $6.12 $2.33 46.2 $5.422 13.9%
DYL 22/04/2024 1.3950 1.09% $1.76 $0.48 $1.770 26.9%
EL8 22/04/2024 0.4800 – 2.04% $0.68 $0.27
ERA 22/04/2024 0.0530 8.16% $0.08 $0.03
LOT 22/04/2024 0.4100 – 2.38% $0.46 $0.17 $0.610 48.8%
NXG 22/04/2024 12.0100 – 1.72% $13.66 $5.46 $17.500 45.7%
PDN 22/04/2024 14.0400 $15.970 13.7%
PEN 22/04/2024 0.1050 7.14% $0.20 $0.08 $0.310 195.2%
SLX 22/04/2024 4.8700 – 0.41% $5.78 $2.92 $7.600 56.1%

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