Weekly Reports | Mar 25 2025
This story features NEXGEN ENERGY LIMITED, and other companies. For more info SHARE ANALYSIS: NXG
A lift in the spot uranium price last week can’t detract from the lack of certainty around tariffs
-U308 markets continue to wallow on thin volumes
-Outlook for uranium clouded by the Trump Administration
-Kazatomprom, Deep Yellow & Paladin Energy in focus
By Danielle Ecuyer
Geo-politics and tariffs remain an overhang
With the world’s eyes focused on the reciprocal tariffs’ announcement on April 2, President Trump signed an executive order on March 20 to increase the domestic production of critical minerals.
The order is designed to prioritise mineral production for national security and the independence of energy, including gold, copper, potash, and uranium. The aim is reducing dependence on foreign imports and speeding up the permitting processes and mineral projects on federal lands.
Bloomberg reported the Defense Production Act as invoked by Trump is a 1950s law used by then-President Truman to increase steel production for the Korean War.
President Biden also invoked the law for the acceleration and support of critical minerals production including battery materials lithium, nickel, graphite, cobalt, and manganese.
Despite the announcement, uranium markets remain becalmed. Industry consultants TradeTech point to three transactions in the U308 spot price market last week: one for 50klbs at US$63.75/lb; one for 100klbs at US$64.50/lb; and the last deal of the week at US$64.10/lb.
The Sprott Physical Uranium Trust price advanced 7.6% over the course of the week, retreating from a 10% rally mid-week, while TradeTech U308 spot price indicator rose US$1.10/lb to US$64.10/lb.
The TradeTech Mid-Term Price indicator came in at US$71/lb and the Long-Term price indicator for U308 at US$80/lb.
Volumes remained subdued, some would say moribund, with no transaction and no new demand in the term U308 uranium market, conversion, or enrichment markets.
Outlook for the uranium market
On the question of the outlook for the uranium market, Morgan Stanley detailed some thoughts from a webinar with William Freebarn from the S&P Global Commodity Insights.
Key takeaways:
-Uranium is part of energy resources and minerals for possible tariffs of 10% on Canada, and the full price tariff impact is not priced into the US/Canadian price differential at this stage. There is a possibility Canadian uranium might be transported to Europe for enrichment before US delivery.
-US domestic production is not anticipated to be incentivised by tariffs, and Freebarn highlighted there are limited new uranium projects in North America apart from Canada’s Rook 1 project, NexGen Energy ((NXG)), and Wheeler River (Denison Mines).
-Regarding additional restarts or new additional nuclear reactors, there is viewed to be limited potential to come online by 2030. Into the next decade, a further increase in nuclear capacity is dependent on Small Modular Reactors (SMRs) becoming commercially feasible.
-The Trump Administration has moved away from decarbonisation and carbon abatement measures in the energy sector, which may result in less focus on nuclear energy investment. This was also highlighted as key for whether Big Tech continues the push for nuclear and clean energy regarding data centres.
-Freebarn noted the term price is trading at a premium to the U308 spot price, which he attributes to the likes of physical participants like the Sprott Investment Trust unwinding the buying in the spot price which saw the price move over US$100/lb in 1Q24. The difference also reflects the “inelastic” nature of utility demand, where a greater value is placed on the security and stability of supply rather than the cost, as fuel represents a relatively small overall cost.
Paladin has a water problem
It never rains and then it pours, or so goes the saying.
One can only feel for management at Paladin Energy ((PDN)) when it comes to the impact of water or the lack thereof on Langer Heinrich.
The company was impacted by water supply issues in the September quarter 2024, and last week a one-in-fifty-year wet weather event in Namibia resulted in operations at Langer Heinrich being suspended due to site access issues.
Canaccord Genuity notes Namibia typically receives 50-300mm of rainfall per annum, but the topography of the land can result in flooding events.
Kazatomprom’s 2024 earnings
The world’s number one producer of uranium, Kazatomprom announced attributable production of 32mlbs of U308 and group sales of 43mlbs. Canaccord Genuity highlighted last week the numbers are better than market expectations, albeit at the lower end of consensus.
Management retained production guidance for 65-69mlbs, while flagging Inkai is expected to lower production plans and could come in at the bottom end of guidance.
Canaccord explains capex and costs are above expectations and likely to impact on cash generation in 2025. The broker retains a Buy rating and target price of US$37.55.
Deep Yellow rallies over 12% last week
Macquarie observes Deep Yellow ((DYL)) appears to be meeting expectations for a Tumas final investment decision in the next few weeks, which the analyst views as a major “milestone.”
This would put the company on track to achieve initial production in early 2027.
At current share price levels, Macquarie highlights the market is imputing a US$57/lb uranium price for Tumas and Mulga Rock’s valuation, and US$49/lb if some value is included for additional assets such as Alligator River (NT), Omahola, and Tubas (Namibia).
The broker estimates greenfield incentive pricing in the US$80-US$85/lb range. Currently, the in-house price forecast is US$85/lb. Outperform rating unchanged. Target price slips to $1.90, down -5%.
Short interest remains elevated
As at March 18, the latest data available, Boss Energy ((BOE)) retained the highest short position on the Australian market at 23.66%, followed by Paladin in second position at 17.42%, and Deep Yellow coming in fifth at 11.83%.
Post the rally in the Deep Yellow share price last week, if will be interesting to see if shorters lowered their exposure.
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| 1AE | 21/03/2025 | 0.0500 |  25.00% |
$0.12 | $0.03 | |||
| AEE | 21/03/2025 | 0.1400 | 26.09% |
$0.20 | $0.10 | |||
| AGE | 21/03/2025 | 0.0300 | 29.63% |
$0.07 | $0.03 | $0.100 | 233.3% |
|
| AKN | 21/03/2025 | 0.0100 | 0.00% | $0.04 | $0.01 | |||
| ASN | 21/03/2025 | 0.0500 |  – 3.70% |
$0.17 | $0.05 | |||
| BKY | 21/03/2025 | 0.4700 | 9.41% |
$0.47 | $0.27 | |||
| BMN | 21/03/2025 | 2.4100 | 19.43% |
$4.87 | $1.90 | $7.400 | 207.1% |
|
| BOE | 21/03/2025 | 2.7800 | 20.50% |
$5.99 | $1.99 | 49.7 | $3.979 | 43.1% |
| BSN | 21/03/2025 | 0.0160 | 14.29% |
$0.14 | $0.01 | |||
| C29 | 21/03/2025 | 0.0600 | 20.00% |
$0.13 | $0.03 | |||
| CXO | 21/03/2025 | 0.0800 | 0.00% | $0.17 | $0.07 | $0.090 | 12.5% |
|
| CXU | 21/03/2025 | 0.0100 | 0.00% | $0.05 | $0.01 | |||
| DEV | 21/03/2025 | 0.1000 | 7.95% |
$0.45 | $0.07 | |||
| DYL | 21/03/2025 | 1.1000 | 14.65% |
$1.83 | $0.91 | -3390.0 | $1.777 | 61.5% |
| EL8 | 21/03/2025 | 0.2300 | 20.00% |
$0.62 | $0.19 | |||
| ERA | 21/03/2025 | 0.0020 | 50.00% |
$0.06 | $0.00 | |||
| GLA | 21/03/2025 | 0.0100 | 0.00% | $0.03 | $0.01 | |||
| GTR | 21/03/2025 | 0.0030 | 0.00% | $0.01 | $0.00 | |||
| GUE | 21/03/2025 | 0.0700 | 0.00% | $0.13 | $0.05 | |||
| HAR | 21/03/2025 | 0.0560 | 30.23% |
$0.14 | $0.03 | |||
| I88 | 21/03/2025 | 0.2800 | 3.70% |
$1.03 | $0.14 | |||
| KOB | 21/03/2025 | 0.0600 | 0.00% | $0.18 | $0.05 | |||
| LAM | 21/03/2025 | 0.7200 | 2.86% |
$1.04 | $0.48 | |||
| LOT | 21/03/2025 | 0.2000 | 14.29% |
$0.49 | $0.16 | $0.450 | 125.0% |
|
| MEU | 21/03/2025 | 0.0500 | 11.11% |
$0.06 | $0.04 | |||
| NXG | 21/03/2025 | 7.8700 | 9.64% |
$13.66 | $7.16 | $15.700 | 99.5% |
|
| ORP | 21/03/2025 | 0.0300 | 0.00% | $0.12 | $0.03 | |||
| PDN | 21/03/2025 | 6.5600 | – 1.50% |
$17.98 | $5.91 | 156.0 | $11.171 | 70.3% |
| PEN | 21/03/2025 | 0.7300 | 13.85% |
$2.70 | $0.63 | $4.810 | 558.9% |
|
| SLX | 21/03/2025 | 4.0900 | 6.89% |
$6.74 | $3.35 | $6.900 | 68.7% |
|
| TOE | 21/03/2025 | 0.1900 | 8.57% |
$0.52 | $0.17 | |||
| WCN | 21/03/2025 | 0.0200 | 17.65% |
$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: NXG - NEXGEN ENERGY LIMITED
For more info SHARE ANALYSIS: PDN - PALADIN ENERGY LIMITED