Paladin Energy Shares Leap Again After Uranium Firm Confirms Langer Heinrich Project Readiness

PALADIN Energy CEO, Ian Purdy, said the company was waiting “for the right uranium price” before pressing the button on production at its re-developed Heinrich Langer mine in Namibia.
“The improving structural outlook for uranium markets and Paladin’s opportunity to positively contribute to the decarbonisation of global electricity generation provides the platform for an exciting period,” he said in an update today.
In terms of an update of the project published today, Paladin said it was now considering project enhancements including the production of vanadium and the processing of low-grade uranium stockpiles. The company was also considering producing uranium at a lower cut-off grade.
The $81m capital cost estimate of a previous study was confirmed for a 17 year life of mine, supported by ore reserves of 84.8 million tons. Life of mine production was increased in the update plan to 77.4 million pounds of uranium oxide from 76.1 million pounds previously. Cash costs also increased over previous estimates to $27.40 per pound from $26.90/lb owing to increased estimated contract mining rates, the company said.
Shares in Paladin Energy gained 12% on the Australian Securities Exchange on Thursday taking gains over 12 months to 683%.
Paladin also confirmed an estimated it would take 18 months for first production from project commencement, with full production expected after a further 15 months. Interestingly, Paladin was investigating self-funding the early works of the mine construction.
The uranium market is beginning to stir again as the mineral’s potential to provide low carbon energy becomes more attractive, especially as the cost of other so-called decarbonising minerals such as copper and nickel increase.
In September, the price of uranium surged to its highest level since 2014 owing to buying pressure exerted by Sprott Inc, an investment firm. According to a report by Bloomberg News, the fund was trying to corner the physical market.
Sprott, which launched its Physical Uranium Trust earlier this year, built up stock totalling 24 million pounds of uranium. It bought more than 500,000 pounds in a single day. For comparison, total spot volume for 2020 was 92.2 million pounds.
Paladin said continued to seek uranium “offtake contracts with sufficient duration and value” to underpin the Langer Heinrich project. “The company notes an increase in market queries from utilities and an increase in long term market pricing,” it said.