Power Metal Resources is a diversified junior explorer with an exciting portfolio of global projects that spans ten metals including gold, lithium, tungsten, copper, PGMs, and Uranium.

Power’s strategy has been to build a diverse portfolio of assets and add value to each through internal exploration. They then seek to lock in this value through either bringing in a JV partner or disposing of the assets, possibly through an IPO.

Indeed, Power Metal Resources is currently preparing IPOs for subsidiaries Golden Metal Resources and First Development Resources.

These IPOs will of course provide an opportunity to lock in any value created at the projects, and have rightly been a main focus for the Power Metals team this year.

However, it was evident Power Metal Resources is already planning their next big move when Paul Johnson spoke at the UK Investor Magazine Summer Investor Evening 2022.

The Power Metals CEO made it clear they saw significant further growth in Uranium demand, and are aligning their portfolio accordingly.

“At Power Metal we see an opportunity to further build our uranium profile. This will be accomplished by undergoing exploration on our existing exploration portfolio, the acquisition of additional interests, as well as through investment holdings in new uranium focused entities that we can help to create,” Paul Johnson said in a recent update on their uranium activities.

Power Metal Resources & Uranium

Paul Johnson was clear in his views that nuclear would be central in meeting the world’s future cleaner energy demands. In addition, they have identified a potential shortfall between current levels of production capacity and forecast demand.

“Uranium prices sit far below the point of economic production for most miners of the yellow metal, so producers worldwide mothball their mines and instead buy uranium directly from the physical market at a lower cost,” Power Metal Resources said in their recent report on the Uranium market.

“Meanwhile, as we enter the 2020s, Covid-19 hits remaining production considerably and several nations begin to stockpile uranium as a matter of national security.”

“Suddenly, this previously oversupplied market is starting to look much tighter in the face of ongoing (albeit historically modest) demand. And with this, uranium prices once again begin to rise, hovering around the $27-32/lb range.”

To ensure Power Metal Resources captures any upside in Uranium prices, they have secured high-grade uranium mineralisation in the Athabasca Basin, Canada.

Power Metal Resources, through its wholly-owned Canadian subsidiary, controls a combined 41,196- hectares covering 7 project packages.

In addition to the Athabasca Basin, Power Metal’ subsidiary, First Development Resources, operates the Selta project in Australia.

The FTSE 100 moved higher on Thursday after Boris Johnson finally threw in towel on his time as Prime Minister.

Stocks in London rose in line with global equities as investors continued to pick up bargains after a period of heavy selling.

Commodities surge

Miners stormed ahead with Antofagasta rising over 8% at the time of writing, while Anglo American and Glencore added over 6%.

Shell and BP added a significant number of points to the FTSE 100 as they gained 3% and 4% respectively.

“This continued the recovery from a big sell-off at the start of the week and followed mixed trading in Asia. Resources stocks were in heavy demand with Shell releasing a teaser ahead of its second quarter results, which revealed just how well it has done out of the recent strength in energy prices,” said AJ Bell investment director Russ Mould.

However analysts pointed to potential risks to commodities companies given the backdrop of slowing growth and possibility of a recession.

“The big risk for Shell and BP going forward is that slowing economies could pull down the price of oil but for now there is an expectation that demand will keep outstripping supply,’’ said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.

Persimmon

Persimmon was one of the FTSE 100’s top fallers after the builder signalled it was starting to feel the impact of supply chain issues. The housebuilder fell over 5% as it also said planning application hold-ups were hindering its activity.

“Persimmon could be the canary in the coal mine for housebuilders, one of the last sectors holding on to post-pandemic euphoria. The group said that supply chain snarls were starting to eat into revenues as materials and labour shortages kept the group from delivering as many new homes as it expected,” said Laura Hoy, Equity Analyst at Hargreaves Lansdown.

“Planning holdups thanks to the pandemic were another issue as backlogs have kept some 1,500 sites due to open over the next 5 years in limbo. This is a Persimmon-specific problem given the group prefers to buy land without planning at a lower cost to boost profits.”