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Assessing poor performers – Peninsula Energy (PEN)

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    Assessing poor performers – Peninsula Energy (PEN)

    Hi MM team, tuned into the midweek webinar on “Assessing poor performers”. Thanks for the great update, really enjoyed your commentary! Talking about poor performers … you have in the past provided some comments on Peninsula Energy (PEN). They have been hammered over past 18 months but are now so close to an operational restart. The news this week was of a cost overrun on Processing Plant expansion but given they are almost ready to restart production surely the project is now all but de-risked? MM are bullish on the uranium play, given the location of the company and the recent news of Russia’s ban on uranium exports to the U.S this must be great tailwinds for them or am I missing something? What are your thoughts on their current state of operations? Any thoughts on the MD (Wayne Heili) resignation to make way one for someone to take company forward now that production restart is imminent? Thanks for the update Steve

    Answer

    Hi Steve,

    Unfortunately, in the same manner as Paladin, PEN has recently delivered a production downgrade and this is not a forgiving market – note Paladin (PDN) and Boss Energy (BOE) are two of the most shorted stocks on the ASX as bearish bets swing from lithium to uranium, all good in theory until one day! PEN is now a junior $170mn miner bordering on the “penny dreadful” having fallen from 9.5c to 5.3c this month, a savage 44% negative re-rate.

    Whilst the slower ramp-up is disappointing, we remain bullish on the outlook for the uranium market and Peninsula’s advantage of being one of the few US based uranium producers holds it in good stead.

    • Whilst the news from Peninsula was disappointing, in our view the market has over-reacted to short term issues which have not materially impacted the valuation of the company, though we do prefer PDN at current levels.

    When the sector turns locally, PEN could be the first to punch 25-50% but from where is the million dollar question.

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    Peninsula Energy Ltd (PEN)
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