Uranium and Lithium Stocks Shine Despite Market Challenges

Your go-to update for standout small-cap resources on January 22, 2025.

Uranium Stocks Surge with Paladin’s Strong Performance

Short sellers, take heed—ASX uranium stocks are making a robust comeback. Recently, uranium stocks have bypassed major ASX lithium miners as the most shorted entities on the exchange. A significant turnaround in performance from industry leader Paladin has many current and prospective yellowcake producers hoping for a rally in share prices.

During the December quarter, Paladin produced 638,409 pounds of uranium oxide, with nearly half of that output occurring in the last month of 2024. The Langer Heinrich mine in Namibia alone contributed 308,604 pounds, boasting an impressive average plant recovery rate of 88%. Additionally, water supply, which had posed challenges during the ramp-up phase, has improved following a planned plant shutdown in November.

Ian Purdy, Paladin’s CEO, expressed satisfaction over the positive impact of operational improvements on production. He acknowledged that while the LHM is ramping up to full capacity, patience remains essential as the local team works toward their objectives. Moreover, the recent completions, including the acquisition of Fission and the addition of the PLS project, promise decades of future development opportunities for Paladin Canada.

Boss Energy and Sector Impacts

Paladin’s impressive results have alleviated some negative sentiment surrounding the sector, particularly benefiting Boss Energy, currently the most shorted stock on the ASX. Boss is set to reveal its quarterly results on January 29, and noteworthy investments have emerged from global asset manager State Street, which increased its stake from 10.21% to 11.24% this week.

Boss’s Honeymoon uranium mine in South Australia continues to ramp up production alongside its 30% owned Alta Mesa project in Texas, managed by TSX-listed enCore Energy. In its last quarterly report, Boss achieved production of 89,516 pounds of U3O8 at Honeymoon, keeping its production guidance for FY25 at 850,000 pounds.

Focus on Lithium Resources in Argentina

While the lithium market faces challenges, Argentina has emerged as a key player in driving interest in the battery metal. The pro-free market policies of the Milei government, including tax incentives for major projects, have attracted significant investment, notably after Rio Tinto’s impressive $10 billion acquisition of Arcadium Lithium last year. Following this, the pledge to develop a multi-billion dollar brine project called Rincon, utilizing next-generation direct lithium extraction technology, has further spotlighted Argentina’s potential.

In particular, the recent resource announcement from Patagonia has captured attention, showcasing a maiden JORC inferred resource estimate of 3.816 million tons of lithium carbonate equivalent—approximately 717,000 tons of lithium metal—at the Formentera project. This estimate points to a promising future for Patagonia, especially given that 173,000 tons of the resource lies in ‘free flowing and capillary areas,’ potentially supporting a 15-year lithium carbonate operation.

TechGen Uncovers Promising Copper and Gold Targets

Shifting focus to Western Australia, TechGen Resources experienced a surge in interest after unveiling the discovery of a significant 200-meter deep bedrock conductor at its Blue Devil project, indicating potential for copper and gold deposits. The identification of rock chip samples containing over 1% copper or 1g/t gold has piqued interest as the company models an intrusion believed to be situated below multiple electromagnetic conductor plates.

According to TechGen Managing Director Ashley Hood, the availability of multiple geophysical data layers supports the identification of these significant exploration targets. The Blue Devil Project has never been tested before, and its proximity to known mineralization makes it a strong prospect for future development.

Eastern Resources Leverages Lepidolite Potential

On another front, Eastern Resources is gaining traction with its Lepidolite Hill project near Coolgardie, where successful flotation tests on high-grade samples indicated it could achieve an impressive 80.5% lithia recoveries, yielding a 3.75% Li2O concentrate. Given the project’s historical lepidolite and petalite production from the early 1970s, this recent outcome demonstrates the potential to revitalize lepidolite resources in Australia.

Conclusion

In summary, the small-cap resources landscape is witnessing notable developments, particularly with uranium and lithium stocks gaining traction amid varying market conditions. The impressive performance of companies like Paladin and Patagonia is drawing attention, while TechGen’s exploration prospects provide optimism for near-term discoveries. This dynamic environment suggests continued opportunities and challenges for resource investors in the coming months.