Uranium miner PDN has raised $200m at 72c (plus another $15m via a retail entitlement) with the funds being used to restart production, the big question being whether the 8.8% discount is exciting enough considering the stock was trading at 64c only a few weeks ago. MM feels that Paladin is the stand-out in the uranium sector on a risk-reward basis with the pathway to production for Langer Heinrich being well-defined / low risk and underpinned by a quality resource. Importantly PDN has all of the necessary permits and licences to restart the mine hence we have been in and out of the stock in our Emerging Companies Portfolio through the year looking for optimum position location.
We had a few emails flow in after our last sale of PDN which was into weakness on the day when Russia had targeted a nuclear power plant in Ukraine. We don’t generally like selling into such events however we did this from a risk perspective with the understanding that we would likely get another opportunity in this volatile stock. In that instance we took a 2.7% loss on the position, however worth also noting that we took a 98% profit on our position in September last year having bought at 48c before selling out at 95c.
MM likes PDN around 72c and below
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