Weekly Reports | Jan 28 2025
This story features PALADIN ENERGY LIMITED, and other companies. For more info SHARE ANALYSIS: PDN
Tariff threats overhang the U308 spot market, while Paladin Energy delivers a strong quarter update
-Tariff uncertainty casts a shadow over U308 spot market
-Paladin Energy comes up trumps for 2Q25
-Australia and a nuclear future, what’s on the cards?
By Danielle Ecuyer
U308 spot market softens
Industry consultants TradeTech spotted conflicted market sentiment in the U308 spot market last week.
Multiple narratives and potential actions from Trump 2.0 are creating uncertainty. The consultants noted Russia was threatened with more tariffs and sanctions if actions were not taken soon to stop the Ukraine fighting.
The President stated he would “have no other choice” but to impose tariffs, taxes and sanctions on “anything being sold by Russia to the United States, and various other participating countries”.
Simultaneously, the consultants explain, the Trump administration has promised deregulation and streamlined approval processes for the development of new nuclear plants. Trump also announced the Stargate project starting at US$100bn and up to US$500bn for the development of AI infrastructure with corporfate partners SoftBank, Oracle and OpenAI.
At the Davos Economic Forum, TradeTech highlights feedback from International Atomic Energy Agency Director, Rafael Mariano Grossi who detailed global leadership was needed to address the challenges the industry is facing.
“Big tech needs nuclear to power energy-intensive AI data centres”, Grossi is quoted.
Amidst all these macro backdrops, the TradeTech spot U308 price declined by -US$2.60lb to US$71.15lb on thin trading volumes.
One transaction was conducted on Tuesday at US$74lb with sellers lowering their offer prices into the end of the week. A second transaction at US$72.75lb for delivery of 50,000lbs of U308 in March was undertaken on Thursday.
By Friday, several transactions took place ar US$71lb and one at US$71.25lb. The last transaction was priced at US$71.50lb.
TradeTech’s Mid-Term Price Indicator sits at US$78lb and the Long-Term Price Indicator at US$82lb.
At the current level, the TradeTech weekly spot price is down -28.9% from a year ago and down -6.4% for 2025 year-to-date.
The consultants explain utilities have adopted a “wait-and-see” approach in the term uranium market until further clarity arises on Trump tariffs across several countries including Russia and Canada. US utilities are reported as waiting until February 1 for more announcements.
Outside of the US, utilities are looking to lock in commitments with potential sellers.
In corporate news, NextEra Energy has progressed with plans for the potential restart of the Duane Arnold Nuclear Power Plant in Iowa.
The CEO said at the earnings call, discussions with regional grid operators had started and a request to the US Nuclear Regulatory Commission to reinstate the plant’s operating license had been submitted to accommodate increased energy demand from data centres, including two proposed developments.
The plant was closed in 2020 and could be ready for restart by the end of 2028.
Cameco announced its partner Kazatomprom had confirmed production has resumed at the Inkai joint venture project and both parties are working to establish the impact of the production suspension on 2025 production plans.
Broker updates on Paladin Energy
Morgan Stanley summed up Paladin Energy’s ((PDN)) quarterly activities report as “pleasingly” better production with plant recovery at Langer Heinrich improving to 88% following the November works; this was better than expected.
Production came in at 638klb with 309klb in 2Q25. Shaw and Partners notes Paladin is on track to achieve management’s FY25 production guidance of 3-3.6mlb.
Citi points slightly lower than expected sales over the December quarter due to a delay in U308 delivery until January 2025.
The broker highlights water issues have been resolved and water storage levels increased as a future buffer for Langer Heinrich.
Post the completion of the Fission acquisition, UBS points to estimated free cash flow around US$10m in 1H25 and cash on hand of US166m, which should allay concerns around debt levels and cash flow generation.
Canaccord Genuity explains the quality of stockpile grades have been less short lived than originally anticipated. Management believes once mining starts in July, the stock pile issues will be resolved. Although some consideration is being given to bringing forth mining to blend the ore and offset some of the grade issues. The broker retains a target price of $15.20.
FNArena’s daily monitored brokers have an average target price of $11.558 with two Hold-equivalent ratings and four Buy-equivalent ratings. Paladin remains the preferred uranium stock on the ASX for Shaw and Partners.
The broker also notes the share price tends to track the U3O8 spot price. The analyst believes a better indicator of industry fundamentals is the contracting price, which stands above US$100/lb.
Boss Energy ((BOE)) is due to report its December quarterly activities on January 29. Canaccord Genuity forecasts production of around 180klbs, a rise of 100% on the previous quarter. This analyst expects cash costs of circa US$40lb and highlights a downward trend as increased capacity is brought online.
Production guidance stands at 850klbs and an estimated 580klbs will need to be generated in 2H25 to meet management’s guide.
Canaccord retains a Speculative Buy rating with a target price of $5.75.
A nuclear Australia?
Jarden’s deep dive into whether nuclear energy could assist in the rate of decarbonisation of Australia is fraught with major challenges including major amendments in domestic legislation and the high costs of establishing nuclear plants.
Dissecting the Coalition’s plans for developing nuclear plants, costed at around $331bn, Jarden envisages major upside risks to the estimated cost proposal, particularly given Australia’s lack of experience in large scale nuclear energy and an experienced work force.
Australia possesses around one-third of global uranium resources, so if the bans were to be removed supply is not deemed to be an issue. Australia is currently the fourth largest U308 producer behind Kazakhstan, Canada and Namibia.
The broker concludes adding nuclear energy to the mix could be a positive, but near term economic and environmental benefits would be very “limited”.
Nuclear energy is seen as a complement to Australia’s potential energy mix, not an alternative to renewables. Given the cost differentials, development timelines, waste and reliability, the analyst does not view comparisons as viable.
Jarden proposes nuclear energy in Australia could boost non-carbon electricity production with the benefits evident after 2050. The analyst states nuclear power is unlikely to “do little to accelerate the energy transition towards net zero within the next 10-15 years.”
Also, a nuclear energy expansion proposition would likely require coal generation for longer.
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| 1AE | 24/01/2025 | 0.0600 | 0.00% | $0.19 | $0.03 | |||
| AEE | 24/01/2025 | 0.1450 |  3.57% |
$0.31 | $0.11 | |||
| AGE | 24/01/2025 | 0.0380 | 0.00% | $0.08 | $0.03 | $0.100 | 163.2% |
|
| AKN | 24/01/2025 | 0.0100 | 0.00% | $0.04 | $0.01 | |||
| ASN | 24/01/2025 | 0.0630 |  – 7.35% |
$0.17 | $0.05 | |||
| BKY | 24/01/2025 | 0.3400 | 3.03% |
$0.45 | $0.27 | |||
| BMN | 24/01/2025 | 3.1800 | 0.32% |
$4.87 | $1.90 | $7.400 | 132.7% |
|
| BOE | 24/01/2025 | 3.1700 | 10.84% |
$6.12 | $2.21 | 30.0 | $3.817 | 20.4% |
| BSN | 24/01/2025 | 0.0180 | 0.00% | $0.21 | $0.02 | |||
| C29 | 24/01/2025 | 0.0400 | 0.00% | $0.13 | $0.03 | |||
| CXO | 24/01/2025 | 0.0920 | – 1.08% |
$0.26 | $0.08 | $0.090 | – 2.2% |
|
| CXU | 24/01/2025 | 0.0100 | 0.00% | $0.06 | $0.01 | |||
| DEV | 24/01/2025 | 0.0920 | 6.98% |
$0.45 | $0.08 | |||
| DYL | 24/01/2025 | 1.4550 | 12.36% |
$1.83 | $0.91 | -363.8 | $1.850 | 27.1% |
| EL8 | 24/01/2025 | 0.3000 | 3.45% |
$0.68 | $0.23 | |||
| ERA | 24/01/2025 | 0.0020 | 0.00% | $0.07 | $0.00 | |||
| GLA | 24/01/2025 | 0.0100 | 0.00% | $0.03 | $0.01 | |||
| GTR | 24/01/2025 | 0.0030 | 0.00% | $0.01 | $0.00 | |||
| GUE | 24/01/2025 | 0.0800 | 14.29% |
$0.15 | $0.05 | |||
| HAR | 24/01/2025 | 0.0400 | 0.00% | $0.26 | $0.03 | |||
| I88 | 24/01/2025 | 0.7100 | 14.52% |
$1.03 | $0.14 | |||
| KOB | 24/01/2025 | 0.0700 | 0.00% | $0.18 | $0.07 | |||
| LAM | 24/01/2025 | 0.7600 | 8.57% |
$1.04 | $0.48 | |||
| LOT | 24/01/2025 | 0.2550 | 8.51% |
$0.49 | $0.17 | $0.540 | 111.8% |
|
| MEU | 24/01/2025 | 0.0610 | 7.02% |
$0.06 | $0.04 | |||
| NXG | 24/01/2025 | 11.7400 | 8.50% |
$13.66 | $7.89 | $16.600 | 41.4% |
|
| ORP | 24/01/2025 | 0.0400 | 0.00% | $0.12 | $0.03 | |||
| PDN | 24/01/2025 | 9.0000 | 4.29% |
$17.98 | $6.83 | 63.0 | $11.558 | 28.4% |
| PEN | 24/01/2025 | 1.5300 | 5.52% |
$2.90 | $1.02 | $4.810 | 214.4% |
|
| SLX | 24/01/2025 | 6.5400 | 9.18% |
$6.74 | $3.35 | $7.200 | 10.1% |
|
| TOE | 24/01/2025 | 0.2200 | 0.00% | $0.52 | $0.19 | |||
| WCN | 24/01/2025 | 0.0200 | 0.00% | $0.03 | $0.01 |
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