The spooks at the UK’s foreign secret service MI6 have a better chance than anyone else of divining the factors behind the trouncing of Minerals 260’s (ASX:MI6) market value following the release of its Bullabulling gold project pre-feasibility study.

In the two days after the release, MI6 shares fell by 21% to 60c for a market value loss of $363 million to $1.36 billion. The rest of the gold sector was weak all right on the gold price, but there was nowhere near the pain MI6 endured.

It was head-scratching stuff because there was no glaring trip-up for Bullabulling exposed in the PFS. There were some in the market that didn’t like capex coming in higher than they expected, or the lower initial annual production forecast of 150,000oz.

There was also commentary about MI6 now being cum-raise, a line of chatter that ignored its cash holding of more than $200 million to see it through to the bankable feasibility study stage when it will establish an equity:debt funding package, weighted towards debt given the $A3,000-plus an ounce margins at Bullabulling, based on forecast AISC and the current gold price.

Perhaps it was simply a case that as MI6’s share price had run hard from March while all others have been in retreat because of the slide in gold prices from US$4,800/oz to around the $US4,000/oz level, MI6 was overdue a fall back to earth.

Maybe so.

But the reality is that analysts who have followed the stock on its merry rise from being a $30 million company when it acquired Bullabulling in April last year all increased their price targets on the stock in the wake of the PFS, acknowledging, from their perspective, both PFS shortcomings and PFS positives.

Euroz Hartleys increased its price target from $1.13 to $1.16. Bell Potter raised its PT from $1.35 to $1.40 while Argonaut raised its PT from $1.30 to $1.40.

MI6 now needs to hit the road and make its case.

It has already done that with Franco-Nevada, the $30 billion gold royalty creation of Pierre Lasonde that ran a fine tooth comb over Bullabulling earlier in the year when it kicked $210m into MI6 for an increased Bullabulling royalty and a 4.9% equity position in the company.

Meanwhile, it is safe to suggest the UK’s MI6 spooks haven ‘t been spending time on whether Regis (ASX:RRL) will come back with an increased offer for Vault (ASX:VAU) after its first-mover bid was gate-crashed by Raleigh Finalyson’s Genesis (ASX:GMD) with a higher and endorsed offer.

It is a possibility but considered most unlikely given the $1.5 billion in synergies unique to a Genesis-Vault combination due mainly to the co-Leonora location of their major operations.

Just a suggestion, maybe Regis could run the ruler over MI6, the company.  

URANIUM:

Unlike the price of gold, uranium continues to tick higher, with the long-term or contract price hitting (nominal) record levels in June of $US95.50/lb.

The last time the all-important long-term price was at these levels was in 2007 when it got to US$95/lb on a supply shock out of Canada. At that time, the spot price, which is really only of interest to speculators, spiked to US$136/lb.

The spot price last month averaged $US85/lb, which was a shade higher than the average for May.

While it is not important as the long-term contract price struck between the uranium producers and the nuclear power plant owners, the spot price does have a lot to do with investment sentiment in the uranium equities space.

It is for that reason that the despite the steady advance in long-term prices to record (nominal) levels, uranium equities have performed poorly in recent months. The broader risk-off sentiment pervading equity markets has not helped.

Still, it has got to be thought that the dam wall will break once the long-term price cracks US$100 a tonne and heads off to who knows where. We’re kind of there already.

As Canaccord noted this week, there is a disconnect in the reported term price  compared with what leading Canadian producers have said is being achieved behind closed doors.

It noted that Denison Mines in its Q1 reporting said base escalated values in excess of US$100/lb, and Cameco noted market related contracts available at US$115-120/lb with floors in the mid-US$70/lb and ceilings up to US$160/lb.

That fits with a forecast from Bloomberg’s strategic research arm BloombergNEF that nuclear capacity is set to climb 44% over the next decade after years of tepid growth, spurred by growing demand for electricity and aggressive efforts to build reactors in China and India.

“The world may have as much as 535 gigawatts of installed nuclear power by 2036, up from 372 last year,” it said.

The uranium to support the growth has to come from somewhere.

On that score, it was interesting on Thursday to have India’s Prime Minster Narendra Modi in Australia to formalise a 2014 agreement allowing uranium sales to India which was not previously acted on because India is not party to the nuclear non-proliferation treaty.

“Australia’s huge uranium reserves are directly connected to India’s nuclear journey,” Modi said in Melbourne ahead of a later meeting Australian Prime Minister Anthony Albanese.

How that pans out remains to be seen as all states other South Australia and the Northern Territory continue to ban uranium mining. Unless those bans are lifted, the heavy lifting on supplies to India will fall on BHP from Olympic Dam in South Australia, and the production that comes from the smaller SA operations owned by Boss Energy and US group Heathgate.

As an aside, the Canaccord note on uranium referred to earlier came up with the gem that BHP has been staking claims just outside the home of Canadian uranium production, the Athabasca Basin.

“While we aren’t sure of BHP’s motivations, we are encouraged by the signal being sent related to BHP’s potential interest in uranium (in Canada),” Canaccord said.

POWERHAUS URANIUM:

Take all of the above and it is good time to be bringing forward a uranium explorer.

That’s what a bunch of uranium executives ex-Extract Resources and 92 Energy are doing with Powerhaus Energy.

It will be nicely leveraged to exploration success and the unfolding bull market in uranium too as at the issue price of 20c a share in the IPO it will have a market cap of about $17 million.

The finishing touches are being put to the IPO which has raised $9 million to advance exploration programs in Argentina and the Athabasca Basin in Canada.

While the Athabasca Basin is a known uranium province, Powerhaus’ ground in Argentina covers an emerging and under-explored uranium province, with past work pointing to the potential for multiple styles of uranium, most notably Kazakhstan-style roll fronts systems which account for 40% of global production.

Argentina’s President Javier Milieu has thrown down the welcome to foreign investment in the country’s resources sector through the Regime for Large Investments with its concessional tax rates and other breaks for large-scale investments.

BHP and Rio Tinto have already availed themselves of its goodies for their respective copper/gold and lithium projects in the country.

Argentina currently has three nuclear power plants generating about 7% of the country’s electricity needs. Being the libertarian that he is, Milei has said he wants to partially privatise the state-owned industry, as well as expand capacity to fuel AI/data centre demand.

Tetragon Energy:

Talking about leveraged positions to energy requirements, the Philippines oil and gas-focussed Tetragon Energy (ASX:TET) debuted on the ASX on Thursday, with its 20c shares from its IPO closing at 25c.

Tetragon was spun out of ASX-listed and Perth Basin-focussed Triangle Energy (ASX:TEG), with Triangle shareholders receiving 1 Tetragon share for every 113 Triangle shares held, with Tetragon also raising $4 million as part of the IPO. So with 39.7m shares on issue upon listing, it is now a $9.3m company.

Like other countries in the south-east Asian region, the Philippines has been particularly spooked by events in the Middle East and is keen to grow its domestic production for greater energy independence.

Domestic gas pricing matching international pricing is part of the government’s incentive program to build out its oil and gas sector.

Tetragon is now kicking off the exploration program which will focus on the two offshore permits in the Sulu Sea in which it has a 37.5% interest and is operator.

Both come with sizeable gas resources but the idea is to grow the upside story through technical studies and bring in a farm-in partner with deeper pockets to capture the upside in drilling campaigns – the fun part for lightly-capitalised juniors in the oil and gas space.