Paladin Energy has reported a net loss after tax of $22.9 million for the six months to 31 December 2015, which is a 66% improvement on its loss of $67.2 million a year earlier. As well as announcing its half-year and quarterly results yesterday, the Perth-based, African-focused uranium miner said it had appointed Alexander Molyneux as CEO following his six-month stint as interim head.
Total revenue for the period of $101.6 million was slightly lower year-on-year on a fall in sales, but Paladin said this had been almost entirely offset by an 18% increase in realised uranium prices. The company received $40.5 per pound of uranium oxide (U3O8), compared to the weekly spot price average for the six months of $36.26/lb and the average price received in the first-half of 2015 of $34.3/lb. According to the company's presentation to analysts, a consensus of 15 analyst forecasts expects the uranium price to average $62/lb in 2020, up from $42/lb this year.
Paladin's cash flow at the end of December stood at $136.8 million and the company estimates a funding gap to refinance 2017 convertible bonds of between $140 million and $165 million.
Paladin has two mines in Africa - Langer Heinrich Mine and Kayelekera.
Langer Heinrich Uranium Ltd, a member of the Paladin Energy Ltd group of companies, holds the group's 100% interest in Langer Heinrich. The mine is located at the foot of the Langer Heinrich Mountain in the Namib Desert in western Namibia. Kayelekera, located in northern Malawi, was put on care and maintenance due to sustained low uranium prices, in February 2014. The mine is operated by Paladin subsidiary Paladin Africa Limited, in which the government of Malawi holds a 15% interest.
The company's list of highlights for the three months ended 31 December included a 16% increase in production at Langer Heinrich of 1.259Mlb U3O8 compared with the September 2015 quarter. The C1 unit cash cost of production for the December 2015 quarter of $25.38/lb decreased 9% from $27.82/lb in the September 2015 quarter. A record monthly C1 cash cost was achieved during the month of December of $23.73/lb and continuation of a low C1 cash cost running rate last month of $24.36/lb.
During the conference call to analysts, Molyneux said: "We are a global uranium leader and we are the largest investable pure-play uranium miner. We have fully built capacity that includes our Kayelekera mine on care and maintenance which when restarted would immediately increase our production by 40%. And our global resource inventory is almost 400 pounds, which gives us a substantial pool of assets on which to draw future growth from in addition to our current operating Langer Heinrich Mine."
He added: "Langer Heinrich is undisputedly a world class asset. We have said it many times. And this is in terms of its key features, scale, mine life and production cost. Cost at the moment is where this mine is coming to its own. It’s moving well into the first quartile of global cash costs."
The company achieved a sales revenue of $64.4 million for the three months ended 31 December, selling 1.699Mlb U3O8. The average realised uranium sales price for the quarter was $37.90/lb compared to the average TradeTech weekly spot price for the quarter of $36.03/lb.
The company expects Langer Heinrich C1 cash costs in the range of $24/lb to $26/lb - a reduction of $1/lb versus the previous range of $25/lb to $27/lb). Lower C1 cash costs at LHM combined with non-Langer Heinrich costs "being within guidance" is resulting in reduced 'all in' cash expenditure levels for the company. The running rate for the second half of the 2016 financial year is expected to be in the range of $35/lb to $37/lb, which would result in a full-year range of $38/lb to $40/lb – versus a previously presented range of $39/lb to $41/lb.
Paladin said it "continues to be on track" to be cash flow neutral on an 'all in' basis at current spot uranium price and foreign exchange rates excluding one-off restructuring costs and capital management or strategic initiatives for the 2016 financial year.
For the first quarter of 2016, the company projects uranium sales in a range of 450,000 to 650,000 lb.
Molyneux became Paladin's interim chief when the company's founder, John Borshoff, agreed to step down as managing director and CEO. Molyneux to joined Paladin from Azgara Resources Group, a private banking and investment firm focused on the minerals sector.
Researched and written
by World Nuclear News