Malawi uranium project nears start-up

22 January 2009

Australia's Paladin Energy is on schedule to begin commissioning of its Kayelekera uranium project in Malawi in January, with production ramp-up scheduled later within the first quarter of 2009. The company has signed a second sales contract for uranium from the mine.

Kayelekera (Paladin)
Plant construction at Kayelekera (Image: Paladin)
In a quarterly report to the Australian stock exchange, Paladin said that several key project milestones and achievements were successfully completed during the fourth quarter of 2008. The most significant highlights, it said, were the successful running of the semi-autogenous grinding (SAG) mill and all front-end equipment components during December, followed by the introduction of waste rock during early January. The company added that "many major plant areas are now complete and the project has now entered the commissioning phase."
Paladin said that the 3.3 million pounds U3O8 (1500 tonnes U3O8) per year Kayelekera project is currently 90% complete and remaining on budget. It said that all key plant areas remain scheduled for completion during the first quarter of 2009, with "the primary focus on all operational buildings including product drying/packing, elution and precipitation areas." The company added that the plant for producing sulphuric acid is on schedule for commissioning in April.
Paladin also announced that it is finalizing a second sales contract for uranium to be produced at the Kayelekera project. Under the agreement, more than 1 million pounds U3O8 (455 tonnes U3O8) from Kayelekera will be delivered to a North American utility between 2011 and 2013 "at specified sales prices which are reflective of the current term uranium price."
Revised JORC-compliant resource estimates for Kayelekera were reported in November. The mineral resources at Kayelekera have been increased by 27% with almost all the deposit reporting as measured and indicated resources, Paladin said. At a 300 parts per million (PPM) U3O8 cut-off limit, measured and indicated resources amount to 22.2 million tonnes grading at 0.08% U3O8, compared with previously reported resources of 15.3 million tonnes grading at 0.09% U3O8.
Langer Heinrich expansion
Meanwhile, Paladin reported that operations at its Langer Heinrich uranium project in Namibia exceeded nameplate design production for the second consecutive quarter during the fourth quarter of 2008. It said that "this places the operations in a good state of readiness to accept the integration of Stage II expansion and commence the increasing of annual production capacity to 3.7 million pounds U3O8 (1680 tonnes U3O8) from 2.6 million pounds U3O8 (1180 tonnes U3O8)."
The company stated that the new design production target of 3.7 million pounds U3O8 per year is expected to be achieved during the second quarter of 2009.
Paladin said that the construction phase of the Stage II expansion is "well advanced with all bulk earthworks and 80% of the civil foundations completed." However, it said that the project is "running about two months behind schedule."
"Although the commissioning and ramp-up of the two newly constructed operations will have its challenges," Paladin said, "the company is at this stage hopeful it can achieve its stated production of 3.35 million pounds U3O8 (1520 tonnes U3O8) for the current fiscal year," ending 30 June.