Weekly Reports | Jul 09 2024
This story features BOSS ENERGY LIMITED, and other companies. For more info SHARE ANALYSIS: BOE
The U308 market took a breather due to the midweek July 4th Independence Day holiday, and Australian brokers analysed production updates from Boss Energy and Paladin Energy.
-U308 spot unchanged on the week
-Nigeria changes the rules
-Broker updates on Aussie uranium producers
By Danielle Ecuyer
The US Independence Day holiday on July 4thunderpinned a quiet week in uranium markets.
Industry expert TradeTech highlighted participants remain involved with the waiver application process to the Department of Energy, due to the upcoming Russian uranium import ban on August 11.
Russian supplier Tenex’s July 15 cut-off date for orders is also looming, complicated by those seeking exemptions from the Department of Energy.
The U3O8 spot price remained unchanged on the week at US$85/lb. The Mid-Term U3O8 price stood at US$93/lb and the Long-term price is US$80/lb.
Politics never too far away
Checking in on industry news, TradeTech states GoviEx Uranium received correspondence from the Nigerian Minister of Mines, announcing it had lost the rights over the perimeter of the Madaouela mining permit as it is being returned to the public markets.
GoviEx Uranium which has finished a 650,000m drilling operation announced, “it reserves the right to challenge the decision”.
Production updates in Australia
Boss Energy ((BOE)) was in the limelight, reporting production of 57lbs of U3O8 from Honeymoon up to June 30.
Bell Potter believes the ramp up is on track but slightly slower than management expected and what it had forecast.
Boss Energy has retained production guidance of 850lbs from Honeymoon for the first full year and Bell Potter points to the first U3O8 shipment in July.
Adjusting for the slightly lower FY25 production estimate, the broker has reduced its forecast to 0.85mlbs from 1.16mlbs, including 1mlbs from Honeymoon and Alta Mesa.
The rise in production costs to $42.7/lb from $35.04/lb was highlighted.
Including a mark-to-market in the uranium price, Bell Potter lowers its EPS forecasts by -5% for FY24 and -38% in FY25, with a corresponding shift in the target price to $5.90 from $6.35. A Buy rating is unchanged.
Macquarie also adjusted earnings forecasts for the lower ramp up expectations for Honeymoon. With a change of analyst, the target price is lowered to $5 from $6 and an Outperform rating maintained.
Morgan Stanley retains a cautious stance on costs. Its target is moved to $4.55 from $4.65 with an Equal-weight rating. Industry View is Attractive.
Bell Potter also focused on Paladin Energy ((PDN)) and the expectations for the upcoming 4Q24 results.
The broker lifts the production forecasts in FY25 to 4.5mlbs versus management’s guidance at 4-4.5mlbs and sales of 3.9mlbs against management’s guidance of 3.8-4.1mlbs.
All-in-sustaining-costs are raised to US$37/lb in FY25 due to a lift in C1 (basic operational) costs.
No guideline on shipping information was provided in management’s recent update, and this could well result in volatile quarterly revenue results, Bell Potter states.
The most significant event for the analyst is the closure of the Fission Uranium deal, which is due in September.
Bell Potter has raised its target price to $16.10 from $15.70 and has an unchanged Buy rating on the back of FY25 EPS forecasts lifting 7%.
For more reading on uranium:
https://fnarena.com/index.php/2024/06/25/uranium-week-spot-goes-drop-dead-quiet/
https://fnarena.com/index.php/2024/06/20/all-aboard-for-the-nuclear-renaissance/
https://fnarena.com/index.php/2024/06/18/uranium-week-spot-price-hits-pause/
https://fnarena.com/index.php/2024/06/12/uranium-week-namibia-in-focus/
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| 1AE | 05/07/2024 | 0.0600 |  -14.29% |
$0.19 | $0.06 | |||
| AGE | 05/07/2024 | 0.0500 |  1.96% |
$0.08 | $0.03 | $0.100 | 100.0% |
|
| BKY | 05/07/2024 | 0.3450 | 1.47% |
$0.70 | $0.26 | |||
| BMN | 05/07/2024 | 3.1400 | – 4.00% |
$4.87 | $1.44 | $7.400 | 135.7% |
|
| BOE | 05/07/2024 | 3.7200 | – 6.14% |
$6.12 | $2.83 | 37.9 | $5.050 | 35.8% |
| DYL | 05/07/2024 | 1.3700 | 5.64% |
$1.83 | $0.65 | -100.4 | $1.770 | 29.2% |
| EL8 | 05/07/2024 | 0.3900 | – 2.56% |
$0.68 | $0.29 | |||
| ERA | 05/07/2024 | 0.0400 | 2.78% |
$0.08 | $0.03 | |||
| LOT | 05/07/2024 | 0.3300 | 0.00% | $0.49 | $0.18 | $0.660 | 100.0% |
|
| NXG | 05/07/2024 | 10.4200 | 1.74% |
$13.66 | $6.60 | $17.500 | 67.9% |
|
| PDN | 05/07/2024 | 12.8900 | 3.91% |
$17.98 | $7.25 | -235.6 | $16.287 | 26.4% |
| PEN | 05/07/2024 | 0.1100 | 5.00% |
$0.18 | $0.08 | 36.7 | $0.260 | 136.4% |
| SLX | 05/07/2024 | 5.0100 | – 0.39% |
$6.74 | $2.92 | $7.600 | 51.7% |
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