Weekly Reports | Oct 15 2024
This story features PALADIN ENERGY LIMITED, and other companies. For more info SHARE ANALYSIS: PDN
Technological innovation in nuclear energy power generation is the growing narrative behind a positive outlook on uranium.
-Sprott Physical Uranium Trust actively buying
-U308 companies top of the short positions in ASX200
-US administration pushes technological innovation
By Danielle Ecuyer
Spot market doing its thang
Last week’s spot market was characterised by “fluctuations” in the U308 price, industry consultants at TradeTech report, with spot pricing ending the week up US$0.50 to US$83lb.
This brings the recent rally over the previous four weeks to 5% or a 19% gain on a year earlier.
Volumes in the spot market remain “subdued” TradeTech highlights, although the Sprott Physical Uranium Trust has been in the market, acquiring 400k pounds of U308 in the last month. This includes 100k purchased last Friday, the consultants note.
TradeTech’s Mid-Term U308 price indicator stood at US$86lb and its Long-Term price indicator at US$82lb.
Short interests won’t budge
ASIC data on short positions in the Australian sharemarket show four out of the local Top 20 are uranium stocks. Paladin Energy ((PDN)) is sitting as the third largest short at 13.79%, up from 10.1% a month ago, and steady on a week earlier at 13.92%.
Boss Energy ((BOE)) shows the fourth largest short interest at 13.51% compared to 12.66% a week earlier and 9.35% four weeks previously.
Deep Yellow ((DYL)) is number eight in the top twenty at 9.88%, versus 9.86% a week ago and 8.45% a month earlier. Lotus Resources ((LOT)) comes in at number twelve with an 8.37% short interest.
Bell Potter highlighted this week Boss Energy is highly leveraged to the spot price as the company is largely uncontracted. The analyst recently visited the opening ceremony for the Alta Mesa site which is co-owned with enCore Energy under a 70/30 joint venture. Alta Mesa commenced production in June as an in-situ recovery style operation in South Texas.
The broker stressed execution at Honeymoon remains “critical”, retaining a Buy rating and $5.70 target price.
FNArena’s Short Report: https://fnarena.com/index.php/analysis-data/the-short-report/
Macro bullish narratives bubble up
In contrast to the short positions, RBC Capital has added Cameco to its Top 30 Global Ideas for 2024:
“We see long-term upside potential in the shares as we believe Cameco is well-positioned to benefit from positive uranium market fundamentals and a nuclear energy rebirth, as a Western-based producer with top-tier uranium mines and a significant ownership in the Westinghouse nuclear services business.”
There lays a more nuanced medium to longer term take on the uranium sector for one of the world’s largest uranium producers with capacity of 30m pounds annually and 485m pounds of proven and probable mineral reserves.
Technological Innovation in the fore
On the macro front, several events stacked up for the bullish longer-term nuclear energy backdrop.
In the past week, the Biden Administration’s Climate Adviser Ali Zaidi presented at Reuter’s Sustainability conference in New York with an emphasis on re-starting decommissioned nuclear power plants as a priority to increase energy supplies.
Two recent examples include Holtec’s Palisades Nuclear Power Plant in Michigan and a unit at Constellation Energy’s Three Mile Island plant in Pennsylvania.
TradeTech also refers to the US Department of Energy’s move to support the development of high-assay low-enriched uranium, referred to as HALEU which is required to support the evolution of more advanced reactors.
Six contracts were awarded to assist in the technological advancement of a US supply chain for these fuels. From a technical perspective, the contracts support the evolution of equipment and the like to “de-convert HALEU from uranium hexafluoride to uranium oxide or uranium metal forms”, TradeTech reports.
Centrus Energy, one of the company’s awarded a contract describes HALEU “uranium that has been enriched so that the concentration of the fissile isotope uranium-235 (U-235) is between 5% and 20% of the total uranium mass. This is higher than the 3-5% U-235 concentration found in traditional low-enriched uranium (LEU) fuel used in most current commercial nuclear reactors.
Google also joined the hyperscaler transition, following in Amazon, Microsoft and Oracle’s footsteps, to support technological innovation and offtake agreements for nuclear power.
The company has agreed to purchase power from Kairos Power, a developer of a small modular reactor called Hermes Low-Power Demonstration reactor which is backed by the US Department of Energy.
The technology is aiming to use molten fluoride salt instead of water as a coolant. Water is employed in traditional large-scale reactors.
With a goal of 2030 for activation for the first reactor with more coming on stream by 2035, adding 500MWs of power to the grid, Google exemplifies the evolving relationship between the world’s largest technology companies and the evolution of nuclear power.
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| 1AE | 11/10/2024 | 0.0500 | 0.00% | $0.19 | $0.03 | |||
| AEE | 11/10/2024 | 0.1500 | 0.00% | $0.33 | $0.11 | |||
| AGE | 11/10/2024 | 0.0500 |  – 2.13% |
$0.08 | $0.03 | $0.100 |  100.0% |
|
| AKN | 11/10/2024 | 0.0100 | 0.00% | $0.07 | $0.01 | |||
| ASN | 11/10/2024 | 0.0800 | 0.00% | $0.20 | $0.07 | |||
| BKY | 11/10/2024 | 0.3400 | 4.62% |
$0.45 | $0.26 | |||
| BMN | 11/10/2024 | 3.2900 | 0.31% |
$4.87 | $1.90 | $7.400 | 124.9% |
|
| BOE | 11/10/2024 | 3.4200 | 0.88% |
$6.12 | $2.38 | 24.4 | $4.280 | 25.1% |
| BSN | 11/10/2024 | 0.0300 | – 3.13% |
$0.21 | $0.02 | |||
| C29 | 11/10/2024 | 0.0700 | 0.00% | $0.12 | $0.06 | |||
| CXO | 11/10/2024 | 0.1200 | – 4.00% |
$0.40 | $0.08 | $0.090 | -25.0% |
|
| CXU | 11/10/2024 | 0.0200 | 0.00% | $0.06 | $0.01 | |||
| DEV | 11/10/2024 | 0.1400 | 0.00% | $0.45 | $0.11 | |||
| DYL | 11/10/2024 | 1.4300 | – 1.73% |
$1.83 | $0.91 | -79.4 | $1.900 | 32.9% |
| EL8 | 11/10/2024 | 0.3800 | – 7.32% |
$0.68 | $0.26 | |||
| ERA | 11/10/2024 | 0.0100 | -18.18% |
$0.08 | $0.00 | |||
| GLA | 11/10/2024 | 0.0100 | 0.00% | $0.04 | $0.01 | |||
| GTR | 11/10/2024 | 0.0100 | 0.00% | $0.02 | $0.00 | |||
| GUE | 11/10/2024 | 0.0800 | 0.00% | $0.18 | $0.05 | |||
| HAR | 11/10/2024 | 0.0400 | 0.00% | $0.28 | $0.03 | |||
| I88 | 11/10/2024 | 0.5100 | 6.00% |
$1.03 | $0.14 | |||
| KOB | 11/10/2024 | 0.1200 | -21.43% |
$0.18 | $0.07 | |||
| LAM | 11/10/2024 | 0.7550 | 4.14% |
$1.04 | $0.48 | |||
| LOT | 11/10/2024 | 0.2700 | 5.77% |
$0.49 | $0.20 | $0.540 | 100.0% |
|
| MEU | 11/10/2024 | 0.0400 | 2.78% |
$0.06 | $0.03 | |||
| NXG | 11/10/2024 | 10.4300 | 5.19% |
$13.66 | $7.89 | $16.200 | 55.3% |
|
| ORP | 11/10/2024 | 0.0400 | -20.00% |
$0.12 | $0.04 | |||
| PDN | 11/10/2024 | 11.9100 | 0.68% |
$17.98 | $8.15 | 23.8 | $14.160 | 18.9% |
| PEN | 11/10/2024 | 0.1000 | – 1.01% |
$0.15 | $0.07 | 33.3 | $0.260 | 160.0% |
| PNX | 11/10/2024 | 0.0040 | 0.00% | $0.01 | $0.00 | |||
| SLX | 11/10/2024 | 4.4600 | – 3.88% |
$6.74 | $3.01 | $7.200 | 61.4% |
|
| TOE | 11/10/2024 | 0.2700 | – 5.45% |
$0.70 | $0.01 | |||
| WCN | 11/10/2024 | 0.0300 | 20.00% |
$0.03 | $0.01 |
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CHARTS
For more info SHARE ANALYSIS: BOE - BOSS ENERGY LIMITED
For more info SHARE ANALYSIS: DYL - DEEP YELLOW LIMITED
For more info SHARE ANALYSIS: LOT - LOTUS RESOURCES LIMITED
For more info SHARE ANALYSIS: PDN - PALADIN ENERGY LIMITED