While PDN’s 1HFY25 revenue and cost of production was in line with our estimates, earnings result was weaker than we had expected with stockpile expensing and financing both higher than we had estimated. We have now updated our accounts model to fully integrate the Fission Uranium acquisition. A planned 12-day shutdown during the December quarter enabled PDN to address issues and make plant improvements. This pause in operations also enabled build-up of a water storage buffer. Regional water transfer infrastructure appears to be holding up well and further production interruptions seem unlikely. We maintain our Buy recommendation, although reduce our price target from A$11.50 to A$10.05. Our valuation impacted by a lower uranium spot price (US$69/lb U3O8) and weaker than expected first half result. The second half of FY25 presents PDN with the opportunity to regain investor confidence with a solid Langer Heinrich (75% PDN) production result. We consider the Fission Uranium acquisition value accretive and believe the market has still not given PDN full credit for the deal. Results from planned drilling at the Paterson Lake South and Michelin projects in Canada could ignite investor interest in PDN’s strengthened exploration and development portfolio.
To access the full report please log in under the Research Portal at the bottom of this page.
Argonaut’s Research Portal allows you to access Argonaut’s wealth of Research, as well as view descriptions of the Morning Note, Companies covered and the Team.
If you would like to access our research please contact us to create an account.
