Uranium Week: U3O8 Renaissance Meets Tariffs

Weekly Reports | Apr 01 2025

This story features PALADIN ENERGY LIMITED, and other companies. For more info SHARE ANALYSIS: PDN

Trump’s tariffs remain a thorn in the side of uranium markets, without cooling longer term prospects for the industry.

-Tariff tensions cloud uranium outlook as spot prices slips
-Boss Energy leads on production and cost control
-Paladin and Lotus Resources in focus

By Danielle Ecuyer

Inertia and uncertainty remain

At the risk of sounding like a broken record, the U3O8 spot market continues to be in hibernation mode over tariff concerns.

The nuclear fuel supply chain is not immune from the potential reciprocal tariffs to be announced this week on April 2, depending on how and if the Trump Administration structures tariffs around uranium imports from both Canada and Europe.

General concern relates to the 25% tariff imposition inside the automotive industry and to what extent a similar size of tariff will or won’t be extended to America’s largest nuclear fuel trading partners.

A sizeable volume of UF6 and enriched uranium product is sourced and imported from Europe into the US, while Canada remains the largest exporter of U3O8 to the USA, after Kazakhstan.

Two U3O8 transactions were recorded in the spot market last week with the price slipping by -US$0.10 to US$64.00/lb, according to industry consultants TradeTech.

This brings the decline in the U3O8 spot price year-to-date to -15.7% and to -25.8% from a year ago. Both buyers and sellers remained on the sidelines awaiting further clarity around the impact of tariffs.

The TradeTech Mid-Term U3O8 Price Indicator came in at US$71/lb and the Long-Term Price Indicator at US$80/lb.

In other macro news, the US Department of Energy re-issued available funding of US$900m for proposals and applications to support the development and evolution of Generation III Plus small modular reactors (SMRs) in the US.

The funding is structured with US$800m to support two teams including utilities, reactor suppliers, construction companies, and end-users for the SMRs, and US$100m for looking at some of the challenges which are delaying growth in the US domestic nuclear industry across design, licensing, supply chains, and site preparation.

The US Secretary of Energy Chris Wright reaffirmed, “America’s nuclear energy renaissance starts now.”

Corporate news 

Ord Minnett re-asserted the commentary from Australian uranium companies as they presented at the March 19 Mining Conference whereby Paladin Energy ((PDN)), Boss Energy ((BOE)) and Lotus Resources ((LOT)) provided updates and thoughts on the market.

Uncertainty over tariffs has resulted in a fall in the U3O8 spot price and a “lull” in activity for long-term contracting by utilities. The question marks around tariffs include which party will be liable, the miner or utility, and where the tariff and counter-tariffs will be imposed.

Several FNArena daily monitored brokers attended a site visit to Boss’s Honeymoon project with consensus observation the mine operations are performing well.

Citi even went as far as to be impressed with the ongoing ramp-up, pointing to production and costs being on track to meet guidance at 850klbs (volume) and $37-$41/lb (cost), respectively.

Ord Minnett views the mine ramp-up as “not aggressive,” allowing the company to undertake an orderly development of Wellfield, and with rising flows, it can bring on stream more IX columns.

Boss is the top uranium stock pick for Ord Minnett with a $4.70 target price and Buy rating.

Macquarie explains Wellfield B2 (wellfield is a network of injection and extraction wells used to recover uranium from underground ore bodies without excavation) is outperforming with a faster recovery of uranium at over 40% versus the assumed total recovery of 70%.

Wellfield B3 is on schedule for June production, and Wellfield B4 and B5 are coming on stream in the September and December quarters respectively, backed up by B6 and East Killaroo in March 2026 quarter.

Furthermore, Macquarie details IX column 1 and 2 are running at capacity, and column 3 is due to be operating at full capacity in the June quarter. Although there have been some drying issues, Macquarie observes management’s guidance for drummed FY25 U3O8 of 270-290klbs, which infers June quarter production of 330-350klbs to meet FY25 guidance.

Post the site visit, the broker expects Boss to achieve an upgraded U3O8 production forecast of 892klbs. Ther shares are Buy-equivalent rated with a $4.50 target price, with the report highlighting the company has countered the industry trends around restarting dried uranium and is outperforming its peers.

Consensus target price for Boss sits at $3.857 with six Buy ratings and one Hold-equivalent.

Paladin suffers more water issues

Like rubbing more salt in the Paladin wound, management’s latest update on the effects of the flood at Langer Heinrich was to withdraw FY25 production guidance for reaching maximum sustainable capacity.

Canaccord Genuity accordingly lowered FY25 production forecasts to 2.6Mlbs from 3.3Mlbs and FY26 estimate to 4.5Mlbs from 5.4Mlbs.

The forecast all-in-sustaining costs also rose on lower production.

The broker lowered its target price to $13.35 from $14.80 with a Buy rating retained.

Macquarie has chosen to look through the near-term travails of a 1-in-50-year wet weather event and instead focusses on the acquisition of Patterson Lake South via the Fission Energy deal.

The quality of assets has improved, and the fall in the share price alongside the discount in value relative to its peers allowed for an upgrade to Buy-equivalent from Neutral by Macquarie. Target price set at $8.25.

Other FNArena daily monitored brokers also inked production downgrades for FY25 with Ord Minnett expecting Paladin to rely on lower-grade stockpiles in the interim and Morgan Stanley stating maximum sustainable production is not expected to be reached until the end of 2025.

Consensus target price sits at $10.654 with all eight FNArena daily monitored brokers ascribing a Buy or equivalent rating.

Lotus Resources highlighted at the Ord Minnett mining conference mine production is due in the September quarter 2025 and management is seeking regulatory approval by May. The company is targeting sales to be secured with contracts and not in the U3O8 spot market. Ideally, some 30% would be fixed-price contracts.

The broker emphasises Lotus has a higher commitment to Letlhakane than previously viewed. The stock is ascribed a Speculative Buy rating and 20c target price.

Short interest remains elevated

As at March 25, the latest data available, Boss Energy ((BOE)) retained the highest short position on the Australian market at 24.46%, followed by Paladin in second position at 15.72%, and Deep Yellow dropped down the table to seventh from fifth at 11.63%.

For an explanation on Boss’s uranium mining, extraction and processing see details below:

-Mining (Wellfields):
Uranium is dissolved underground using a leaching solution. The uranium-rich solution (known as pregnant liquor) is pumped to the surface.

-Processing (IX Columns):
The solution is passed through ion exchange (IX) columns, where resin beads capture the uranium.

-Stripping & Precipitation:
Uranium is stripped from the resin and then chemically treated to form a precipitate, this is a concentrated uranium slurry.

-Drying:
The uranium slurry is dried in special drying and packaging units, converting it into solid U3O8 powder, this is what is meant by “dried uranium” or “drummed U3O8”.

-Drumming:
The dried uranium is sealed in steel drums (usually 200-litre size) for transport and sale. Each drum contains a measured quantity of uranium oxide, often referred to in pounds (e.g. 290,000 lbs or 290klbs).

Uranium companies listed on the ASX:

ASX CODE DATE LAST PRICE WEEKLY % MOVE 52WK HIGH 52WK LOW P/E CONSENSUS TARGET UPSIDE/DOWNSIDE
1AE 28/03/2025 0.0500 0.00% $0.12 $0.03
AEE 28/03/2025 0.1400 pup 3.45% $0.20 $0.10
AGE 28/03/2025 0.0300 pdown-11.43% $0.07 $0.03 $0.100 pup233.3%
AKN 28/03/2025 0.0100 0.00% $0.04 $0.01
ASN 28/03/2025 0.0600 pup19.23% $0.17 $0.05
BKY 28/03/2025 0.5400 pup 8.00% $0.62 $0.28
BMN 28/03/2025 2.3600 pdown– 0.83% $4.87 $1.90 $7.400 pup213.6%
BOE 28/03/2025 2.4600 pdown-11.87% $5.99 $1.99 79.8 $3.857 pup56.8%
BSN 28/03/2025 0.0150 pdown– 6.25% $0.14 $0.01
C29 28/03/2025 0.0500 pdown-16.67% $0.13 $0.03
CXO 28/03/2025 0.0800 pup 4.00% $0.17 $0.07 $0.090 pup12.5%
CXU 28/03/2025 0.0100 0.00% $0.05 $0.01
DEV 28/03/2025 0.1000 0.00% $0.45 $0.07
DYL 28/03/2025 1.0200 pdown– 8.07% $1.83 $0.91 -3090.0 $1.777 pup74.2%
EL8 28/03/2025 0.2200 pdown-12.50% $0.62 $0.19
ERA 28/03/2025 0.0020 0.00% $0.06 $0.00
GLA 28/03/2025 0.0100 0.00% $0.03 $0.01
GTR 28/03/2025 0.0030 0.00% $0.01 $0.00
GUE 28/03/2025 0.0700 0.00% $0.13 $0.05
HAR 28/03/2025 0.0600 pup16.07% $0.14 $0.03
I88 28/03/2025 0.1700 pdown-32.14% $1.03 $0.14
KOB 28/03/2025 0.0600 0.00% $0.18 $0.05
LAM 28/03/2025 0.7200 0.00% $1.04 $0.48
LOT 28/03/2025 0.1700 pdown-15.38% $0.49 $0.16 $0.450 pup164.7%
MEU 28/03/2025 0.0400 pdown– 6.67% $0.06 $0.04
NXG 28/03/2025 7.2300 pdown– 0.38% $13.66 $7.16 $15.700 pup117.2%
ORP 28/03/2025 0.0300 0.00% $0.12 $0.03
PDN 28/03/2025 5.2300 pdown-17.25% $17.98 $5.21 -130.7 $10.564 pup102.0%
PEN 28/03/2025 0.7100 pdown– 5.52% $2.70 $0.63 $4.810 pup577.5%
SLX 28/03/2025 3.6300 pdown– 8.27% $6.74 $3.35 $6.900 pup90.1%
TOE 28/03/2025 0.1900 pup 5.56% $0.52 $0.17
WCN 28/03/2025 0.0200 pdown-15.00% $0.03 $0.01

wp market price history u3o8

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