Paladin Energy Ltd (ASX: PDN),an Australia based uranium mine operator and developer, made an announcement on 23rd April 2019, to address the capital raising speculation in the market. In the announcement, the company mentioned that the speculation in the market about the company’s consideration of an equity raising to fund a buyback of its 2023 Secured Notes is a counterfeit.
Paladin mentioned that the company does not hold any such intention of the early redemption of its 2023 Secured Notes. In the announcement the company made it clear that it is not planning to partially/ fully buy back the Secured Notes. As per the company, there are currently no repayment obligations at the Secured Notes, and it will consider all available options to obtain the capital to repay the Notes by their maturity in 2023.
Paladin announced its quarterly activity for the period ended 31st March 2019 on 18th April 2019, in which the company mentioned that there were no uranium sales in the March quarter.
Langer Heinrich Mine (LHM):
The company placed the mine on maintenance amid low spot uranium prices in past years, and as per the company, the Langer Heinrich Mine (LHM) is expected to be on maintenance until the high uranium prices emerge in the global market and support the mine to restart its business on a sustainable basis.
The uranium prices slipped from the level of $29.80 (Day’s high on 13th December 2018) to the level of $24.45 (Day’s low on 28th March 2019). However, the prices slightly improved from the level of $24.45 to the present level of $25.90 amid a rapid shift in economies towards a zero-emission economy, and their stance to curb the carbon emission in line with the Euro 6 emission standards.
Paladin identified multiple options to reduce the operating costs of the mine and to improve the uranium process reliability and potentially recover a saleable vanadium product, from a concept study and started a two-stage Pre-Feasibility Study (PFS) in March 2019 to restart the mine.
As per the company, the first stage of the PFS is planned to evaluate a rapid/economical restart and is estimated to be completed in September 2019. It aims to identify improvements to encounter the known issues in the processing of the LHM.
Paladin mentioned that the second PFS involves in-depth evaluation including process optimisation, which will further target the average life of mine all-in cost for the mine of US$30/lb. The optimisation study will reduce the operational cost by US$6/lb of U3O8. The second stage is expected to be completed by March 2020.
As per the company, during the quarter it only meets minimum tenement commitments.
Paladin holds cash and cash equivalent of US$29.9 million (as on 31st March 2019), down by US$3.1 million as compared to the cash and cash equivalent of US$33.0 million in the previous quarter of December 2018. The cash of US$29.9 million excludes the restricted cash of US$11.2 million.
The stock of the company closed at A$0.125 (as on 23rd April 2019), unchanged as compared to its previous close. Today, 24 April, the stock is trading 13.6% up at A$0.142 (As at 12:15 PM AEST).
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