Money Talks is Stockhead’s regular drill down into what stocks investors are looking at right now. We’ll tap our extensive list of experts to hear what’s hot, their top picks, and what they’re looking out for.
Today we hear from Samso chief executive officer Noel Ong. Samso provides market analysis and insights into ASX-listed companies and business trends.
What’s hot right now?
Ong’s eyes are focused on the uranium sector.
“There’s been a lot of talk about green energy and green metals, but the most misunderstood part of the uranium sector is that it has the lowest carbon footprint of the lot.
“The word ‘uranium’ strikes anxiety, stress, and hatred to the green movement but there is now scientific and industry evidence that it is the greenest of the lot.
“There has been a lot of conversations in the past two years about the rise of uranium, but I think 2022 will be the year it leaves the preparation platform. I am not sure if ‘lift-off’ is the word to use for the trend, but I think this is the year to position yourself in this sector.”
Anticipation of a rising uranium price has been showing a slow and steady rise, which is a good sign for sustainability, Ong says.
“The issues with metal extraction for uranium is no different than any other metals and the lag time from discovery to production or even resource to production will be lengthy.
“ESG will be a major component factoring the viability of projects and in some degree limit the number of potential projects, which will in turn create a supply limitation and can and most likely cause a rise in demand.”
Top picks
Stock picks are always a hard one to mention as there are so many factors that come into play for the viability of the project, Ong says.
“There are some that have all the bells and whistles but then fall over with regulations or funding or some environmental matter.
“Sometimes, like the recent tsunami in Japan, something outside the typical issues creates a negative theme.
“My strategy in this sector is to have a position in either nearly production or good exploration projects – it is all about leverage and upside.
“The producers will be safest but I like leverage.”
“In saying that, my money is with Vimy.
“I have liked Vimy for a very long time. In fact, I looked at their geology way back in 2010 and I thought it was credible.
“Over the years, that project has developed into a real player in this space.
“Don’t misunderstand, to get a uranium project to become viable is extremely hard, many participants in the uranium industry will attest to this statement.”
With all hard, major hurdles passed, Ong says Vimy are still “very cheap.”
“Recently, Deep Yellow offered to take over the company for a 10% premium of the then current price, which if my memory serves me well was $0.29.
“This offer was rejected and its market capitalisation at $0.24 cents is $232 million.”
What Ong likes about VAL is it’s in the Athabasca Basin.
“For those that don’t know, this is the Mecca of uranium deposits,” he said.
“They are finding float (rocks on the ground, meaning could come from anywhere) with good grades of U3O8 and that is a good thing but their issue is finding the source.
“What convinced me to put my money into this company was the acquisition of the Smitty Uranium Mine and the Lorado Uranium Mine.
“The name of the project was sufficient for me to feel there was more than just a good name.”
Then there is the Hook Lake project.
“When you look at the Hook Lake project, you see a multi element project with good uranium, silver, lead, REE and molybdenum,” he said.
“What that tells me is that there is some serious cooking happening but if they can define the source, the chances of a decent range of results is high.
“For investors, this will create excitement and who knows where the share price will go.”
The negative, he says, will be the higher market capitalisation value of $50m.
“Now this is not your typical $10m play but because they have potential, I can accept that figure.”
THR’s uranium-vanadium project is in the Uravan Mineral Belt in Utah-Colorado.
“This company is a sandstone paleo-channel play which will be a lot cheaper to process,” he said.
“A combination of uranium and vanadium which will be great when the time comes to valuing extra credits.
“And again, a place well known for uranium mining historically where Thor is planning a drilling program and as its paleo-channel, it will not be a costly exercise.”
The great part about the THOR project he says is that it has a strong history of uranium mining, so there won’t be any issues for future development.
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewee and do not represent the views of Stockhead.
Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.
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