MoneyTalks: Shaw and Partners' Felicity Thomas names 4 stocks about to bask in a glowing year for uranium

MoneyTalks is Stockhead’s regular drill down into what stocks investors are looking at right now. We’ll tap our extensive list of experts to hear what’s hot, their top picks, and what they’re looking out for.

Today we hear from Shaw and Partners senior private wealth adviser Felicity Thomas.

What’s hot right now?

Thomas believes uranium’s defensive characteristics offers a ‘safe haven’ in times of volatility and reckons the commodity will benefit from the coming flight to real assets.

“We believe that nuclear will drive social change as it is superior to other clean and intermittent energies in terms of social footprint, employment, and income,” she says.

“The Russia-Ukraine conflict will amplify supply deficits with western utilities reluctant to take on Russian supply, even before the imposition of sanctions.

“Western uranium markets are bifurcating and the gap between established production and utility requirements will widen out to 2040.”

Contrary to market perception, Thomas explains the term market exhibited its third busiest year in 2022 since 2001, with 120Mlbs sold, the highest since 2012.

“2023 is set to exceed that level with 50Mlbs already contracted in the March quarter,” she says.

“For our clients we have a few key ideas that we have been invested in for the last couple of years and have a position in for the long-term uranium pricing trending upwards.”

Top picks

PENINSULA ENERGY (ASX:PEN)

PEN is re-starting the Lance Project in Wyoming with first sales of new production scheduled for the fourth quarter of 2023.

According to Thomas, the company has a cash balance of $25m which is sufficient for the Lance project re-start.

“Lance will be the first US project to use low pH ini-situ recoveries, placing project costs in the lowest quartile of producers globally,” she says.

Shaw and Partners has a 12-month price target of 0.34c on this stock.

DEEP YELLOW (ASX:DYL)

Deep Yellow hopes to become a tier-1 uranium producer with a developed portfolio of geographically diverse exploration, early stage and advanced uranium projects.

“The company is positioned as one of the few uranium companies globally able to execute to development and production, with credible multi-mine asset exposure,” Thomas explains.

Its flagship Tumas project tin Namibia has 3.6Mlbpa and a potential 30+ year Life of Mine (LoM).

Once in production DYL will be the largest pure-play uranium producer on the ASX with the potential production capacity +7mlbs.

Shaw and Partners has a 12-month price target of 0.92c on this stock.

NEXGEN ENERGY (ASX:NXG)

NexGen is a dual listed company developing the Rook 1 uranium mine in Saskatchewan’s southwestern Athabasca Basin, the largest development-stage project in Canada.

“Unlike Cigar Lake, the deposit is entirely contained in basement rock with no surface water,” Thomas says.

“A 2021 Feasibility Study outlined an initial 11-year life producing 29Mlbs at AISC US$10/lb for US$1.3bn capex (11 month payback) making it the lowest cost uranium mine in the world.

“The company is now progressing to through the permitting and detailed engineering phase.”

Shaw and Partners has a 12-month price target of $10.75 on this stock.

SILEX SYSTEMS (ASX:SLX)

Silex is focused on the development and commercialisation of the SILEX laser isotope separation technology.

The primary commercial application of the technology is the production of different grades of fuel for the nuclear power industry, licensed to GLE (49% Cameco, 51% Silex).

“GLE is a likely beneficiary of funding through the US inflation reduction act and its path to market is through the Paducah Laser Enrichment Facility in Kentucky,” Thomas says.

Shaw and Partners has a 12-month Price target of $5.00 on this stock.

Uranium picks share prices today:

The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.