Commodities: Uranium
The Sprott Physical Uranium Trust is now trading at what we estimate to be around ~6% discount to the value of it’s Uranium assets which, from what we can tell is the largest discount it has traded at. We are bullish this volatile commodity and we intend to use weakness to add to our position, funded by selling our 5% holding in the ACDC ETF…
Uranium stocks have surged in 2021 and we remain bullish into 2022 as the clean energy theme gathers momentum. However, I now ponder what the next big winner / mover might be, as we’ve alluded to over previous weeks MM feels gold might be the surprise package of the next 6-months while Uranium consolidates it’s explosive move of the last few months.
We are buying back into Paladin (PDN) if the stocks trades into the mid 70c region today. We are bullish Uranium however appreciate the sector is extremely volatile.
PDN +22%: Uranium stocks roared today, Paladin (PDN) up ~20% as the Uranium price starts to move higher. Spot uranium is at US$37/lb, its highest level since early 2016.
PEN is another WA based uranium business, it is the smallest of the 3 with a market cap of just $107m in our view Peninsula Energy’s flagship Lance Projects in Wyoming, USA, requires low upfront capital and can rapidly restart. PEN is the only ASX company with direct exposure to US Government initiatives which are pro-domestic mine development. Also the business is term debt free with an unrestricted net cash balance of US$8m (end Dec20q).
BOE is now an almost a $280m play following the stocks rapid appreciation in 2021, it owns the fully permitted Honeymoon project in South Australia which requires low upfront capital and only 12 months to restart
The last 24-hours has seen uranium miner Paladin Energy (PDN) take advantage of a great rally over the last 3-months to raise almost $220m at 37c, an almost 19% discount to the stocks last traded price. To put things in perspective the companies market cap prior to the raising was just under $1bn hence it was clearly a major relative dip into fund managers ample liquidity stream. At Shaw, we were involved in the raise yesterday and bids from institutions were very strong.
Peninsula Energy (PEN) is a uranium development company. The Company has exploring activities in Wyoming, Karoo South Africa, as well as Western Australia.
