Atomic Eagle Ltd (ASX: AEU) isn't one of the better-known names in the ASX uranium sector, and there's a good reason for that.
The company in its current form only came into being in November last year via a reverse takeover, when GoviEx Uranium was folded into what was then Tombador Iron.
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African focus
Atomic Eagle's flagship project is the Muntanga uranium project in Zambia, which it released a feasibility study for in March.
That study included a maiden ore reserve of 39.6 million pounds of uranium and estimated the project had enough ore reserves to support a 12 year mine life.
It was estimated the mine would cost US$282 million to build and have a payback period of 3.5 years.
The company also said "resource growth will underpin an increased production throughput to significantly enhance the project's economic outcomes''.
To that end the company announced in April it had started a 30,000m drilling campaign across three priority target areas, designed to increase the mineable resource.
The company said it had multiple rigs working on the program.
Atomic Eagle Chief Executive Officer Phil Hoskins said at the time:
Having already demonstrated the success of our initial exploration program that saw the resource increase by 24% to 58.8Mlbs U3O8 within 3 months of owning the Project, we are excited to commence a 30,000 metre program where we will be testing several high priority exploration targets. Our strategy is to grow the resource to underpin a significantly larger mining operation than that contemplated in the previous feasibility study2. With two rigs drilling and numerous walk-up drill targets, we believe there is great potential to expand upon the existing resource.
Shares looking cheap
Shaw and Partners this month initiated coverage of Atomic Eagle with a buy recommendation.
They point out that the project is in a mining-friendly country.
Zambia has long been one of Africa's most established mining jurisdictions, underpinned by over a century of commercial copper production, a legal framework rooted in English common law, and a government that has consistently recognised mining as the cornerstone of economic development.
They also note that Atomic Eagle has expansion possibilities, with an option to buy the early-stage Sitwe project in the north east of Zambia.
They added:
Atomic Eagle also has a potential interest in the Madaouela Uranium Project in Niger which had its licence revoked in 2024. We do not include any value for the project in our Atomic Eagle price target of $1.40 per share. However, there is the possibility that Atomic Eagle and the Niger Government reach an agreement with the project returned.
Shaw and Partners' $1.40 target price is well above the current Atomic Eagle share price of 39 cents.
The company is valued at $152.8 million.
