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Uranium could be set to go nuclear in Australia

You might not never know it but us green-talking Australians have been involved in matters of nuclear importance ever since some idiot split an atom (reports *).

7th July 2022

We’ve been having a few power problems of our own lately.

There’s some big conversations happening and not a heap of really gripping solutions that don’t smack of madness, fraud or dreamy dreams.

According to *’s Emma Davies, International Atomic Energy Agency’s (IAEA) Uranium Production Specialist Dr Adrienne Hanly has flagged that uranium inventories are precariously low.

At the recent World Nuclear Fuel Cycle conference in London, Dr Hanly said uranium fuel inventory levels for US nuclear utilities are at just 16 months of requirements – below the recommended 2+ years minimum.

The nuclear fuel has a new lease on life as a mooted solution to the issue of providing firming electricity to accompany the expanding rollout of wind and solar as Western governments try (though at this point they seem to be largely failing) to wean themselves off fossil fuels.

And as Josh Chiat, also from *, pointed out last week, spot prices may have fallen from above US$60/lb a couple months ago to US$47.50/lb, but that makes the sector a whole lot more investable now than it did five years ago, when prices of US$18/lb made turning a profit in the field a nigh-on-impossible task.

*’s Reuben Adams wrote that only last year the famed mining investor, president and founder of Rule Investment Media, Mr Rick Rule of no fixed address, said the easy money in uranium had been made.

Onya Rick, thanks.

But as Reuben points out, things change, and the uranium price is doing some rather interesting things in 2022.

Uranium stocks have mirrored movements in the spot price like last month’s 11-year high of US$65/pound – the magic number often touted by uranium players that would push them to get into production – and the subsequent plunge back below $US50/lb.

So while the tide of public opinion turns, the demand and supply cycle spins, and energy investors start picking sides, here are some ASX uranium businesses which Rick and the rest reckon still have a case to make.

Boss Energy (ASX:BOE) recently announced it would restart the Honeymoon uranium mine over in South Australia after nine years in mothballs.

Boss flagged the final investment decision in March with a $125 million share placement which, along with a strategic uranium stockpile of 1.25Mlb worth an estimated US$59.38m, should help fund it into production.

The 2.45Mlb per annum yellowcake mine, which will cost around $113 million to construct and refurbish, will be just the third operating in Australia alongside BHP’s (ASX:BHP) Olympic Dam and the privately owned Beverley mine, also in SA.

Boss plans to be in production by the fourth quarter of 2023 with a three-year ramp-up to its full production rate, timed for a looming nuclear supply shortage expected from 2024.

Honeymoon is set to operate for an initial life of 11 years, with an IRR of 47% at a uranium price of US$60/lb.

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