Weekly Reports | 10:00 AM
The U308 spot market takes a breather for summer, while US utilities and states look to restart nuclear facilities, and Paladin and Boss Energy report quarterly updates.
-Higher costs take the shine off Aussie producers
-U308 trading floats in a band
-IEA forecasts robust demand for energy
By Danielle Ecuyer
Even if summer holidays and the ongoing uncertainty around the Russian importation waivers have sapped activity levels from the U308 spot market, news on the uranium and nuclear front continues.
Quarter activity reports for Paladin and Boss Energy
Paladin Energy ((PDN)) was back in the spotlight last week post its 4Q FY24 report which revealed higher than expected operating costs, with Macquarie pointing towards to the one-off nature of the Langer Heinrich restart.
Citi noted U308 production of 517,597lbs up to June 30 which was above its own forecast and also better than Morgan Stanley's estimate at 0.48mlbs.
FNArena's daily monitored brokers all highlighted the July 12 first customer shipment of 0.32mlbs of uranium with some 0.7mlbs expected to be shipped in the September quarter.
Bell Potter pointed to management guiding to stronger production in the 2H25 of between 4.0-4.5mlbs.
Canaccord Genuity viewed the results as coming in below its forecasts, although production guidance exceeded the definitive feasibility study.
The average share price target for the FNArena daily monitored brokers is $16.288 with three Buy and one Overweight rating (effectively 4x Buys).
Boss Energy ((BOE)) also announced its 4Q FY24 activities report, with U308 production of 57,364lbs, including 28,844lbs from its Honeymoon project.
Macquarie observed lower-than-expected cash balances which the broker surmised was a result of higher than previously anticipated capex at Honeymoon.
Morgan Stanley also emphasised the lower-than-forecast cash balance of $67.12m which it also attributed to higher mine development costs.
Looking at the FNArena daily monitored brokers, the average target price for Boss Energy stands at $5.013 with one Buy rating, one Outperform rating and one Equal-weight rating.
Boss was also commented on in media reports it had been in discussions with Energy Resources Australia ((ERA)) regarding Jabiluka.
The company confirmed recent negotiations including a highly conditional offer to acquire the Jabiluka uranium site in the Northern Territory. Post the Federal Government's announcement late last week to end the mineral lease on Jabiluka, Boss has since withdrawn its conditional offer and discussions have ended.
Shaw and Partners highlighted post Bannerman Energy's ((BMN)) 4Q FY24 activities report this company's expected final investment decision around the Etango-8 uranium project is due by the end of the current calendar year.
Northern Hemisphere updates
The U308 spot market concluded last week with one single transaction and was described by industry consultant TradeTech as "extremely quiet".
With a lack of buying interest, sellers were persuaded to lower the price for U308 to US$82lb, representing a -US$2lb decline on the week.
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