3 nuclear stocks: Our analyst team deep dive into nuclear
Welcome to Under the Radar Report. It’s so exciting because we’re going to be talking all things nuclear with our nuclear expert, mining analyst extraordinaire, Peter Chilton.
It’s great to be talking commodities because we’re going to get right into three stocks in particular. I think nuclear really has been one area where I think you’ve excelled even your high expectations, Peter, when you picked Paladin (ASX: PDN) back in early 2021 at 43 cents! It went up well above $16. Now it’s less than half that at over $6.
Is it time to buy nuclear and Paladin $PDN in May 2025?
Peter Chilton thinks it is. The global nuclear industry is having a bit of a resurgence. It has been a fairly mature industry, but it’s now going through a big resurgence because of the energy transition and the need for increased power with AI. So you’re getting all sorts of countries in Europe now moving towards nuclear, committing to nuclear and extensions of the existing lives of nuclear power stations as well.
Is Paladin $PDN now a buying opportunity, Peter? I think it is.
Where is the uranium price?
And we’re starting to see some increase in the uranium price. The uranium spot price increased and it fell back again, but the term price has remained pretty firm at around $80 a pound, which is a very attractive price for many of the producers. And that’s well above where the prices were back in 2024. So there’s a lot of room for improvement.
Is uranium investing risky?
This is one area where there is a lot of risk. We’ve seen that with the big rise and decline of uranium stocks in particular, even at the quality end of the uranium stocks. When it comes to nuclear, as I said, you want to be limiting your exposure, in terms of the percentage of your portfolio but you want to be buy the high quality ASX uranium companies. And these stocks can really make a huge difference to your portfolio’s returns.
Nuclear energy is used globally
Nuclear is global and it’s very much a global industry. And as an energy source it is pretty much in every continent, probably except Australia. Nuclear provides proven baseload power, which once your’ve paid for the project and it is established is very cheap. And it’s absolutely reliable. And we’re starting to see more and more interest across Europe and in the US.
3 Australian Uranium Stocks
Stock 1: Paladin $PDN
One that I just mentioned before is a flag bearer on the ASX. Why is that such a quality uranium producer in your view?
Paladin is basically a reopening of an existing successful project. It’s brownfields, a product that’s already well known by the utilities. It’s now ramping up to quite a large production rate of six million pounds a year. The projects in Namibia, which is a proven uranium jurisdiction. And they’ve also just bought into a new project in Canada, again, in a known uranium jurisdiction.
So with this new project, that would propel them into well over 12 million pounds a year, generating strong production growth.
But where does it fit in? Like Cameco is the biggest listed producer. Cameco is probably about 30 million pounds a year. Cameco is an exceptional one. It’s also got a number of joint ventures as well.
Whereas would Paladin be bigger than most of the others or? It’s certainly of a scale that’s attractive to investors. Paladin is obviously quality.
Stock 2: Boss Energy $BOE
One uranium stock that also has growth potential that Under the Radar Report likes is Boss Energy. Well, the beauty of Boss for many investors is it’s in Australia. So that sort of reduces some of the risk for, you know, in some investors’ minds. It’s based in South Australia. And it’s also reopened a mine, Honeymoon, which has had a proven track record.
How big is Boss Energy compared to Paladin?
Roughly half the size. And Boss has already got a project in a joint venture in Texas as well. The fact they’ve got some US exposure is potentially positive for the longer term, because the US wants to build its nuclear power capacity – to expand it. And, you know, there’s all sorts of opportunities that may emerge for Boss in the States, in joint ventures in the future, once you’re there.
Would you prefer Paladin or Boss Energy?
I’d probably prefer Paladin.
They did have those issues, though, didn’t they?
Yes, they did have flooding – but this was atypical, and they seem to recover from it quite quickly.
So even though Boss don’t have those problems, they’re slightly not quite as good value?
Paladin’s ramping up fairly quickly, whereas Boss is ramping up over three years.
Stock 3: Silex Systems $SLX
Let’s move on to a stock that’s outside of pure uranium production, Silex Systems. That’s a fascinating company.
Can you tell us a bit about Silex Systems?
It’s got this technology, which is an enrichment technology.
When you produce uranium from a mine, it then has to be enriched to produce a fuel, which can be used in the power stations. And then that fuel can be of certain types, but it’s the high-grade fuel that can be used in the new technologies, including the small modular reactors.
So it’s very important that when you’re enriching uranium, you’ve got the capability to go to the higher quality. Now, the technology which Silex has got, and it’s a joint venture with Campico – with the big Canadian group, which obviously provides greater comfort, is that this new technology is not only expected to be more efficient and lower cost than the existing technologies, but can also produce those other alternatives of the high-grade enriched uranium.
What part does the US government have to play?
The US government wants to become self-sufficient in enriched uranium, especially with breaking away from Russian supply. About 70% of the enriched uranium comes from Russia.
So Silex is one of actually six companies tendering or providing their technology with the view that the US will establish several, not just one, but several enrichment facilities to avoid importing it anymore.
About 70% of enriched uranium comes from Russia”.
In terms of their financials, how long can Silex Systems last without raising money?
They’ve got sufficient cash at the moment. Plus the backing of Campico in that joint venture. But once they reach certain milestones, they’re going to get funding from the US government. So there’s government funding available. In fact, there’s about US$ 3.4 billion, among six different companies which is pretty big.
So would you put them as higher risk than Paladin and Boss Energy?
It’s higher risk in the sense that there’s absolutely no certainty that that will be the technology that will be adopted.
The other thing that Silex has, is that they then would go into production. There’s some tailings, which would then be reprocessing.
So Silex ultimately would become a producer of uranium and those different enriched grades.
This would give them direct interest in that enriched uranium, but also royalties on the use of that technology globally. So longer-term, a lot of interest. That’s a low capital, big returning business once it gets going.
Silex is a longer-term, low capital, big returning business once it gets going.
Commodities Series
Peter’s done a great report on nuclear and uranium for Under the Radar Report Small Cap Members’ and if you’re interested in investing in nuclear and need to go into more depth, you’ve got to read it. As well, if you want to get into the stock specifics, login to our member dashboard. We cover six or seven uranium nuclear stocks. They’re all worth checking out.
We also have a recent report on ASX Gas. So we’re going to continue this commodity series and talk about other niche areas that you won’t hear about anywhere else.
650th Small Cap Report
What we’ve also got coming up this week is very exciting. In our 650th issue in small caps, we’ve got a new stock. We’ve got a new stock that we’re very excited about. And we’ve also got a portfolio management series. Like our portfolio manager has really outperformed the market over a long period. That is only accelerating with the market eruptions that we’ve seen because we do have very consistent performance in our small cap fund.
So it was great being a part of Commodities Corner once again with Peter Chilton. And I look forward to talking to you again soon.
