Perth, Australia — MININGREVIEW.COM — 17 March 2009 – Paladin Energy Limited – the Australian company mining uranium in Namibia and Malawi – is reported to have become an attractive acquisition target for larger producers such as Cameco Corporation and Areva SA.
Revealing this in a report released here, JPMorgan Chase and Company said the Perth-based company’s share price reflected little value for its undeveloped uranium resources and prospects, meaning the company could be targeted by larger companies looking for un-contracted material for delivery to customers, or for their own use.
Citing RBC Capital Markets analyst Fraser Phillips, Canada’s National Post reported that Cameco – the world’s largest uranium producer – was highly likely to make an acquisition. Prices for uranium, used to make nuclear fuel, have slumped more than 30% in the past six months, weighing on Paladin stock.
“We believe that now is the ideal time for long-term uranium players such as Cameco and Areva to be acquiring what we see as under-priced assets,” JPMorgan analysts led by Melbourne-based Brendan James said in the report. “We believe potential acquirers would be looking quite closely at Paladin’s project pipeline and exploration potential.”
Quoting the Royal Bank of Scotland, Bloomberg News reports that Paladin shares should rally in the lead-up to the Queensland state election on 21 March, given that the latest polls show a lead for the opposition Liberal National Party, which is likely to overturn the state’s ban on uranium mining.