Paladin Energy Ltd
TSX : PDN
ASX : PDN

Paladin Energy Ltd

November 12, 2010 08:16 ET

Paladin Energy: Financial Report for the Three Months Ending 30 September 2010

PERTH, WESTERN AUSTRALIA--(Marketwire - Nov. 12, 2010) - Paladin Energy Ltd ("Paladin" or "the Company") (TSX:PDN)(ASX:PDN) announces the release of its Financial Report for the three months ending 30 September 2010. The documents comprising the complete Financial Report for the three months ending 30 September 2010, including the Report to Shareholders, Management Discussion and Analysis, Financial Statements and Certifications, are available on the Company's website (www.paladinenergy.com.au) and will be filed with the Company's other documents on Sedar (www.sedar.com).

SUMMARY

References to 2010 and 2009 refer to the equivalent three months ended 30 September 2010 and 2009 respectively.

  • Total U3O8 production of 1,363,000lb for the September 2010 quarter compared to 744,000lb for the 30 September 2009 quarter. An 83% increase over the same period last year. 
  • Langer Heinrich Mine:
    • September 2010 quarterly production of 900,000lb U3O8 vs. 654,000lb U3O8 in 2009. A 38% increase over the same period last year.
    • Stage 3 construction to expand capacity to 5.2Mlb pa is tracking early 2011 mechanical completion and start-up of commissioning.
    • Reserve increase of 104% to 134.1Mlb, underpinning Stage 4 expansion studies targeting annual production of 10Mlb pa.
  • Kayelekera Mine is more consistently achieving nameplate design performance:
    • September 2010 quarterly production of 463,000lb U3O8 vs 90,000lb U3O8 in 2009. A 414% increase over the same period last year.
    • KM process plant throughput has advanced significantly since mid-September and this performance has continued through November.
    • A reserve upgrade is expected late in the December quarter.
    • Bankers completion test commenced on 1 November 2010, running for three months.
  • Langer Heinrich Mine cost of sales (C1) for 2010 remained at US$26/lb (despite a 7% appreciation of the Rand in the quarter). Kayelekera Mine cost of sales (C1) decreased from US$59.50/lb in the year ended 30 June 2010 to US$50/lb in the September 2010 quarter, as nameplate was not achieved for the entire period; although significant improvements have been recognised since mid-September.
  • Total sales volume for September 2010 of 1,043,000lb U3O8.  A 48% increase compared to the same period in 2009. Langer Heinrich Mine sold 943,000lb and Kayelekera Mine sold 100,000lb. The average realised uranium sales price for 2010 was US$46.44/lb compared to US$54.48lb for 2009, reflecting the predominance of spot sales in the quarter.
  • Successful acquisition of more than 90% of the issued share capital of NGM Resources Ltd via an off-market scrip takeover offer. Compulsory acquisition of all remaining shares is underway. This represents a significant addition to Paladin's portfolio of uranium exploration projects and will establish a presence in Niger, a major underexplored uranium province.
  • A successful global issue of US$300M in convertible bonds announced on 28 October 2010. Proceeds will be used to fund the announced tender of US$250M December 2011 convertible bonds and fund other growth opportunities.
  • Expensed exploration of US$5.2M. Resource upgrades during the quarter:
    • Valhalla: Measured and Indicated Resources were increased by 5.6% to 63.4Mlb U3O8 and total Resources were increased from 69.9Mlb to 76.2Mlb U3O8.
  • Paladin has reached an agreement to resolve its dispute with Areva NC (Australia) Pty Ltd (Areva) as announced on 29 October 2010. The settlement paves the way for Paladin and Areva to work co-operatively as shareholders of Summit Resources Ltd and ensures that Paladin controls, amongst other things, the Mount Isa Project sales and marketing rights.
  • Profit and Loss
                  30 Sept 2010 US$M     30 Sept 2009 US$M  
Revenue from sales of uranium oxide   Up   26 %   to   48.4     38.3  
Loss after tax attributable to members   Down   58 %   to   8.2     19.4  
Loss per share (US cents)                 (1.1 )   (3.0 )
             
             
    3 months to 30 Sept 2010 US$M     3 months to 30 Sept 2009 US$M  
Revenue   49.1     38.6  
Gross profit   10.0     14.9  
Exploration and evaluation expenses   (5.2 )   (5.1 )
Corporate and other   (16.6 )   (8.6 )
Finance costs   (13.1 )   (5.2 )
Loss before income tax expense   (24.9 )   (4.0 )
Income tax benefit/(expense)   15.1     (16.0 )
Loss after income tax (expense)/benefit   (9.8 )   (20.0 )
Non-controlling interests   1.6     0.6  
Net loss after tax   (8.2 )   (19.4 )
  • Revenue increased US$10.5M as a result of increased sales of uranium. Total sales volume for the quarter to 30 Sept 2010 was 1,043,000lb U3O8 compared to 703,000lb U3O8 for the comparative period.
  • Corporate costs for 2010 include a non-recurring foreign exchange loss of US$3M and a non-recurring inventory impairment expense of US$3M due to lower production values early in the quarter at KM. Increased finance costs for 2010 reflect the cessation of capitalisation of costs with KM entering commercial production on 1 July 2010.
  • Net loss after tax for 2010 narrowed to US$8.2M from US$19.4M for 2009.
  • Strong balance sheet at 30 September 2010 with US$275.2M in cash invested with Australian banks with a minimum AA Standard & Poor's credit rating.

The documents comprising the Financial Report for the three months ending 30 September 2010, including the Report to Shareholders, Management Discussion and Analysis, Financial Statements and Certifications are attached and will be filed with the Company's other documents on Sedar (sedar.com) and on the Company's website (paladinenergy.com.au).

Conference Call

Conference Call and Investor Update scheduled for 07:00 Perth & Hong Kong, Tuesday 16 November 2010.

18:00 Toronto, Monday 15 November 2010 and 23:00 London, Monday 15 November 2010. 

Details were included in a separate news release made on 9 November 2010.

ACN 061 681 098

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