Shaw and Partners has released a research report on two Africa-focused uranium companies, with very bullish share price targets for each.
And for one, as you'll soon see, that share price target could be just the beginning.
Let's have a look at what they're saying.
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Atomic Eagle Ltd (ASX: AEU)
This company's main focus at the moment is the Muntanga uranium project in Zambia.
Atomic Eagle released the results of a feasibility study into the project in March, which outlined a US$282 million, 2.2 million pound per year open-pit mining operation with a 12-year mine life.
Shaw and Partners said the company kicked off a 30,000m drilling program at Muntanga in April, which was "the most significant exploration campaign at Muntanga in nearly 20 years''.
They added:
The objective is to double the current 58.8Mlb resource to underpin a significantly larger 4–5Mlbpa development scenario that would materially improve project economics through economies of scale.
Shaw and Partners said further drilling results at the Chisebuka target showed that it could be as large as 15 million pounds, "which would make it a handy satellite deposit to the main Muntanga and Dibbwi East deposits''.
And while Muntanga is the main game at the moment, the company also owns the Madaouela deposit in Niger, which hosts about 120 million pounds of uranium at an average grade of 1,400ppm, "making it one of the highest-grade undeveloped uranium deposits globally".
Shaw and Partners added:
We currently have zero value for Madaouela in our $1.40 Atomic Eagle valuation, but if Atomic Eagle successfully negotiates a return of the project, then it could result in a substantial uplift in our valuation.
Atomic Eagle shares are changing hands for 42.5 cents at the time of writing.
Bannerman Energy Ltd (ASX: BMN)
This uranium company recently released an update about construction works at its Etango uranium project in Namibia.
Shaw and Partners said the early works were tracking to budget and on schedule.
They added:
Etango is on-track to be in production in 2028, which looks like to be perfect timing for the coming uranium super cycle. The Etango Uranium Project is one of the few greenfield uranium projects that will be in production this decade. The project is fully funded and has one of the best offtake agreements ever negotiated in the sector with its JV partner CNNC.
Shaw and Partners said a final investment decision for the project was "now a formality with the last remaining conditions precedent for completion of the JV with CNNC to be completed''.
Shaw and Partners has a $6.50 price target on Bannerman shares compared to $3.15 at the time of writing.
