Paladin Energy pulled the uranium sector up by its bootstraps on Wednesday. Pic: Getty Images
Resources Top 5: Paladin level up sends uranium stocks higher
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- Paladin performance lifts uranium stocks
- Patagonia catches the eye with Argentine lithium resource
- TechGen and Eastern Resources up on WA project updates
Your standout small cap resources for Wednesday, January 22, 2025.
PALADIN ENERGY (ASX:PDN) and BOSS ENERGY (ASX:BOE)
Shorters beware, ASX uranium stocks are coming back with a vengeance.
Having recently displaced big ASX lithium miners as the most shorted companies on the bourse, a major turnaround in performance from the industry’s local bellwether Paladin will have other current and future yellowcake producers dreaming of a short covering rally.
Paladin delivered 638,409lb of uranium oxide in the December quarter, but close to half of that came in the final month of the year alone, as its Langer Heinrich mine in Namibia churned out 308,604lb with an average plant recovery of 88%.
The company also said supplies of water, a key constraint during a difficult ramp-up period, had improved after a plant shutdown in November.
“It was pleasing to see benefits from the planned plant shutdown and other operational initiatives positively impact production from the LHM,” PDN boss Ian Purdy said.
“We continue to de-risk the operation, but recognise the LHM is still ramping up to full production and patience is required as our local team steadily achieves their goals.
“The completion of the Fission acquisition and the addition of 2 the PLS project during the quarter provides decades of future development opportunities for Paladin Canada.
“We are creating a leading Canadian development hub for the uranium sector, with exploration upside across all our properties in the Athabasca Basin and in Newfoundland and Labrador. Shareholders now benefit from Paladin’s increased scale, with a combined Mineral Resource that is one of the largest in pure play uranium companies globally.”
Paladin finished the quarter with US$117.1m in cash and US$48.7m in short term investments. Costs clocked in at US$42.3/lb, similar to the US$41.9/lb in the previous quarter, with average sale prices dropping from US$70.3/lb to US$66.9/lb. But the production rate puts PDN in a position to hit its revised production guidance for FY25 of 3-3.6Mlb.
That inspired an 10% run in its shares and over 14% for Boss.
Boss, the most shorted stock on the ASX, will be the next uranium producer to report its quarterly results on Jan 29, and this week saw major global asset manager State Street lift its stake from 10.21% to 11.24%.
Paladin’s result removes some of the sector-wide negativity that has weighed on Boss, which is ramping up its Honeymoon uranium mine in South Australia as well as the 30% owned Alta Mesa project in Texas operated by TSX-listed enCore Energy.
Boss drummed 89,516lb of U3O8 in the September quarter at Honeymoon, maintaining production guidance for FY25 of 850,000lb.
PATAGONIA LITHIUM (ASX:PL3)
It’s not easy to find positivity in lithium these days, yet Argentina is one jurisdiction that has driven interest in the battery metal.
The jurisdiction, where tax breaks for major projects announced by the pro-free market Milei government have drawn big investors, has been placed under the spotlight after Rio Tinto announced its $10bn takeover of Arcadium Lithium last year.
That was followed by a pledge to build a multi-billion dollar brine project called Rincon which will use next generation direct lithium extraction technology.
While the brine resources found in Argentina and elsewhere in South America’s so-called Lithium Triangle, have historically been slow to develop and water intensive, the processing innovation promises to make lower grade resources cheaper, quicker and more environmentally sustainable to produce.
Given the M&A activity attracted by Arcadium and smaller players like Galan Lithium (ASX:GLN) and Lithium Energy (ASX:LEL), it’s fair to say an established resource in the hot exploration domain holds market relevance.
The latest junior to post one of those is Patagonia, which announced a maiden JORC inferred mineral resource estimate at the Formentera project of 3.816Mt lithium carbonate equivalent – around 717,000t of lithium metal.
173,000t of that LCE resource is in ‘free flowing and capillary areas’, which could underpin a 15-year mine life for a 10,000tpa lithium carbonate operation, the company said.
The initial resource is contained within a 1952 hectare area at the Jujuy Province project with high porosity zones next to a demonstration plant location.
Upgrades are likely from the Cilon concession, where sub-surface samples grading up to 1122ppm Li have been collected.
PL3 exec chair Phil Thomas said the resource announcement confirms Formentera, where the high porosity zone runs at 461.6mg/L Li and 945.7mg/L magnesium, as “one of the best undeveloped project in Argentina”.
“This maiden resource exceeds our expectations both in terms of total volume, specific yield (Sy) and also in terms of the high concentration of lithium, leading us to believe Patagonia has a valuable project to be developed,” Thomas said.
“We have the added benefit of proven Ekosolve DLE (Direct Lithium Extraction) technology that has a short construction time and already proven extraction of more than 92% lithium, minimising pond construction risks with water table damage and K and Mg concentration risks.
“Considering we have drilled only four wells, there is still significant exploration and resource upside potential to expand this resource as we continue to drill out the high porosity zone and the Cilon concession.”
The next stage of planning will involve submitting an application to permit a 1000t Ekosolve demo plant, a fifth exploration well and the planning of production wells post borehole magnetic resonance surveys.
TECHGEN METALS (ASX:TG1)
TechGen lifted early before paring its gains after announcing it had uncovered a 200m deep bedrock conductor prospective for copper and gold at its Blue Devil project in WA.
A string of rock chips grading over 1% copper or 1g/t gold have been collected across the interpreted strike of the project, while an intrusion has been modelled 100-400m immediately below three EM conductor plates with airborne magnetics, interpreted as a potential source for mineralising fluids.
A number of mineral deposit types are related to these ‘intrusions’ including modern finds like De Grey Mining’s 11.5Moz Hemi deposit.
“It is exceptionally pleasing to bring these high calibre exploration targets to the market, representing the most promising prospects we’ve identified to date,” TechGen MD Ashley Hood said.
“These targets are supported by multiple layers of geophysics, favourable geology with well-defined structural controls, and proximity to known copper and gold mineralisation from historical surveys along strike.
“While the terrain is challenging, it is precisely in these environments – often described as exploration ‘elephant fields’ –where significant mineral systems can be found.
“The Company is in a unique and fortunate position to test the Blue Devil Project with Australia’s most advanced technology (Expert EM) as a very first mover with the TargetEM 12.5 Hz system.
“This cutting-edge technology provides faster, deeper and more accurate data, allowing the Company to optimise exploration efficiency and precision in modelling these strong and priority AEM anomalies.”
Located near the Kimberley town of Halls Creek, the site of WA’s first gold rush in 1885, Hood says the three AEM conductors have never been tested until now, with TechGen completing advanced geophysics over the area which has long been recommended by government geologists.
EASTERN RESOURCES (ASX:EFE)
Lepidolite doesn’t have the best name in Australia, largely associated with lower-grade deposits in China and Africa eating into Australia’s spodumene producers’ share of the lithium market.
But we have some lepidolite resources in WA as well, with Eastern up close to 20% after flotation tests on high-grade samples from its Lepidolite Hill project near Coolgardie showed it could achieve 80.5% lithia recoveries reporting to a 3.75% Li2O concentrate.
EFE said it also contained a low level of contaminants at 0.07% iron oxide.
A lepidolite and petalite mine in the early 1970s, Lepidolite Hill is located 18km south-southwest of Coolgardie and 32km west of the Mt Marion lithium mine.
