This past week has been eventful – not just globally – but here in SA too. Today, I’m going to share three events that involve the JSE, nuclear and gold that caught my eye and what they mean for you.
The JSE welcomes a new junior miner!
While all eyes were on the Trump-Ramaphosa meeting, the JSE welcomed a new IPO – Shuka Minerals (JSE: SKA).
Shuka is a junior African mining group that is listed on the AIM in London (and now the JSE). Its main asset is the Rukwa coal mine in the Mkomolo district in Tanzania, which has been in care and maintenance for the past year.
The mine historically produced only 4,000 tons per month (tpm) due to a lack of funds as well as weather conditions.
With funds now available, management is planning a production ramp up between June and September 2025 with a target of 5,000tpm by the end of 2026/beginning of 2027.
They anticipate an internal rate of return (IRR) of 80% on the staged ramp-up of the mine, which is bold. But I wouldn’t hold my breath as junior miners typically struggle to hit their targeted IRR. I’m happy to be proven wrong.
In addition to coal, Shuka is keen to take over the Kabwe zinc mine in Zambia. Previously operated by Anglo American and later Zambia Consolidated Copper Mines (ZCCM), the mine is ranked as one of the world’s highest-grade lead and zinc mining operations. So, that sounds exciting.
Of course, mining is hard – especially for junior miners. So, I’m sure investor will take a “wait-and-see approach” before taking a punt on Shuka.
Nevertheless, it’s great to see the JSE’s relevance still intact by attracting new listings. Hopefully, there are many more to come.
Nuclear/Uranium stocks remind investors they still exist!
After a quiet year, nuclear/uranium-related stocks caught investors’ attention after soaring!
Some examples include:
• Centrus Energy – +23%
• Uranium Energy Corp – 25%
• Energy Fuels – 20%
• Boss Energy – 19%
So, what happened?
Last week Thursday, news dropped that President Trump would sign a series of executive orders. They are designed to quadruple US nuclear power output by 2050. Over the weekend, that happened.
I don’t want to bore you with all the details. But one of the bolder executive orders that got my attention directs the Energy Department’s Loan Programs Office to provide funds for restarting shuttered nuclear plants and building new reactors. The goal is for 5GW power updates to existing nuclear reactors and 10 large reactors under construction by 2030.
It’s a very ambitious plan. Nuclear developments are usually never on time or budget. Nevertheless, Trump’s executive orders are huge wins for nuclear.
And it’s not just Trump.
Germany recently surrendered to France by allowing nuclear to be designated ‘green energy’ under EU laws. Nuclear can now compete against wind and solar on a level playing field.
Belgium and Denmark also announced they’re unwinding nuclear bans too.
Simply put – the “Nuclear Renaissance” is alive and well!
The ECB warns gold markets pose a financial stability risk?!
In one of the strangest reports I’ve come across, the European Central Bank (ECB) warned that the Eurozone’s financial stability is in danger due to gold.
Why?
Well, as you know, gold continued to surge this year – up +27% – as demand for the safe-haven soared. Those who bought want delivery of their gold.
However, the ECB insists that too much demand for physical delivery could trigger stress across the system.
“Vulnerabilities have arisen because commodity markets tend to be concentrated among a few large firms, often involve leverage and have a high degree of opacity deriving from the use of OTC derivatives.”
That’s not really a gold problem. That’s a counterparty problem. And it tells you everything about where the real risk lies.
If one of more of these firm suffer a margin call, it would force them to unwind leveraged positions. This could ultimately cause a liquidity shock through the wider financial system.
The ECB also warned that “…disruptions in the physical gold market could increase the risk of a squeeze”. In other words, if investors/traders find out there’s not enough physical gold available for delivery, it would send gold prices MUCH higher.
So, don’t be surprised if gold breaks another all-time high this year.
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