Paladin Energy Ltd
TSX : PDN
ASX : PDN

Paladin Energy Ltd

February 14, 2011 09:19 ET

Paladin Energy Ltd: Financial Report for the Six Months Ended 31 December 2010

PERTH, WESTERN AUSTRALIA--(Marketwire - Feb. 14, 2011) - Paladin Energy Ltd ("Paladin" or "the Company") (TSX:PDN)(ASX:PDN) announces the release of its Financial Report for the six months ended 31 December 2010. The Financial Report is appended to this News Release.

Results

References to 2010 and 2009 refer to the equivalent six months ended 31 December 2010 and 2009 respectively.

  • Increased U3O8 production by 63% from 1,731,000lb in 2009 to 2,829,000lb for the 2010 half year.
  • Langer Heinrich Mine:

    • December 2010 half year U3O8 production increased to 1,832,000lb from 1,496,000lb in 2009, a 22% increase. The Langer Heinrich Mine has now achieved a full years' production at the expanded design capacity of 3.7M lb.
    • Stage 3 construction, to increase annual production to 5.2M lb, is tracking commissioning start-up in late March 2011.
    • Feasibility Study underway for Stage 4 expansion targeting annual production of 10M lb, with completion expected by end calendar 2011.
  • Kayelekera Mine:

    • December 2010 half year U3O8 production of 997,000lb versus 235,000lb in 2009.
    • KM process plant now operating at design capacity for extended periods of time.
    • Study commenced on design of the plant expansion to 3.8M lb pa.
    • Bankers' completion test extended due to power disruption, but expected to be successfully finalised within the required time frame.
  • Overall production guidance revised from 7M lb to 6.0 – 6.3M lb for FY 2011.
  • Langer Heinrich Mine cost of sales (C1) for the half year ended 31 December 2010 remained at US$26/lb, despite a 7% appreciation of the Namibian Dollar. Kayelekera Mine cost of sales (C1) of US$51/lb expected to reduce as production increases.
  • Total sales volume for December 2010 half year of 2,317,000lb U3O8, a 29% increase compared to the same period in 2009. The average realised uranium sales price for the half year was US$50/lb U3O8. Subsequent to the period end spot and term prices have increased to US$73/lb.
  • Successfully completed acquisition of the Aurora uranium assets adding 83.8M lb U3O8 of Measured and Indicated Resources at a grade of 0.09% and 53.0M lb U3O8 of Inferred Resources at a grade of 0.08%. Aurora represents a major addition to Paladin's project development pipeline.
  • Completion of the takeover of NGM Resources Ltd. This represents a significant addition to Paladin's portfolio of uranium exploration projects and establishes a presence in Niger, a major under explored uranium province.
  • Successfully raised US$300M via the issue of 5 year convertible bonds expiring November 2015. Existing US$250M convertible bonds expiring December 2011 bought back.
  • Investment of US$9.4M in exploration expenditure over past six months resulted in resource upgrades:

    • Valhalla: Measured and Indicated Resources were increased by 5.6% to 63.4M lb U3O8 and total Resources were increased from 69.9M lb to 76.2M lb U3O8.
    • Odin adds an Inferred Mineral Resource of 10.3M lb U3O8 at 0.06% to the Mount Isa projects' inventory. 
  • Paladin settled its dispute with Areva NC (Australia) Pty Ltd (Areva).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 projects' sales and marketing rights.
  • Positive cash flow of US$35.6M generated by LHM and KM operations for the 2010 half year before US$65.3M investment in working capital, mainly inventory, to support higher production and sales levels. For the December 2010 quarter LHM and KM generated US$19.4M positive cash flow before US$44.8M increase in working capital.
  • Profit and Loss
  3 months to
31 Dec 2010
US$M
    3 months to
31 Dec 2009
US$M
    6 months to
31 Dec 2010
US$M
    6 months to
31 Dec 2009
US$M
 
Revenue 66.7     62.6     115.8     101.2  
Gross profit 11.0     14.7     21.0     29.6  
Exploration (4.2 )   (4.4 )   (9.4 )   (9.5 )
Corporate costs (14.3 )   (11.2 )   (25.0 )   (18.6 )
Non-recurring income & expenses (2.3 )   7.2     (8.3 )   6.0  
Finance costs (20.6 )   (5.6 )   (33.7 )   (10.8 )
Loss before income tax (30.4 )   0.7     (55.4 )   (3.3 )
Income tax benefit/(expense) 6.4     (0.1 )   21.6     (16.1 )
Loss after income tax (24.0 )   0.6     (33.8 )   (19.4 )
Non-controlling interests 2.7     (0.2 )   4.3     0.4  
Net loss after tax (21.3 )   0.4     (29.5 )   (19.0 )
  • Revenue increased US$14.6M for the December 2010 half year and US$4.1M for the December 2010 quarter by comparison to the previous corresponding periods due to increased uranium sales volumes.
  • Corporate costs increased due to the acquisition of NGM Resources Ltd and the Aurora uranium assets, and expenses associated with expanded operations.
  • Increased finance costs for 2010 (quarter and half year) reflect the cessation of the capitalisation of costs with the Kayelekera Mine entering commercial production on 1 July 2010 and $6.3M related to the buyback of the convertible bond.
  • Strong balance sheet at 31 December 2010 with US$251.8M in cash invested with Australian banks with a minimum AA Standard & Poor's credit rating.

The documents comprising the Appendix 4D – Financial Report for the six months ending 31 December 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, Thursday 17 February 2011. 18:00 Toronto, Wednesday 16 February 2011 and 23:00 London, Wednesday 16 February 2011.

Details were included in a separate news release made on 1 February 2011.

ACN 061 681 098

To view the Half-Year Report, please visit the following link: http://media3.marketwire.com/docs/PDNHYR.pdf.

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