Paladin Resources Ltd.

Paladin Resources Ltd.

August 01, 2006 09:20 ET

Paladin Resources Ltd Quarterly Report-To June 30, 2006

PERTH, WESTERN AUSTRALIA--(CCNMatthews - Aug. 1, 2006) - Paladin Resources Ltd ("Paladin" or "the Company") (TSX:PDN)(ASX:PDN) announces the Company's operational and financial results for the three months ended June 30, 2006.


- Langer Heinrich construction remains on schedule and on budget
- first drawdown of the US$71M bank project finance facility

- Kayelekera BFS and Environment Impact Assessment work on schedule

- Takeover offer for Valhalla Uranium Limited announced

- Uranium spot price continues to rise reaching US$45.50/lb U3O8 in
June (up US$5.00 for the quarter)


In Europe, the UK Government released its Energy Review Report which acknowledged the role nuclear power plays as an economically beneficial source of low carbon generation, and recommended that new nuclear power stations should be built by the private sector under a streamlined regulatory framework to be developed by the end of the year. In both Sweden and Spain, political parties which had held negative attitudes toward nuclear power announced changes towards a more favourable stance.

In the USA, significant developments emphasise the importance of nuclear power. NRG Energy announced plans to build two new 1,350 MWe nuclear power plants at the South Texas Project with construction to commence in early 2009 for completion by 2014. Elsewhere in the USA, several utility consortia are working towards filing license applications for up to 13 new reactors. The US government has demonstrated its strategic support of nuclear power, announcing a civil nuclear agreement with India, and entering advanced talks with Russia to pursue initiatives to support a new proliferation-resistant international civil nuclear fuel industry. The USA is accelerating work on their domestic spent fuel storage facility at Yucca Mountain in Nevada.

In Australia, the Federal Government signed a bilateral safeguards agreement with the People's Republic of China which paves the way for Australian uranium to be sold to fuel China's aggressive domestic nuclear power program. In June, the Prime Minister announced the formation of the Uranium Mining, Processing and Nuclear Energy Review Taskforce to undertake a comprehensive, objective and scientific review of the entire nuclear fuel cycle and its future possible application to Australia's energy requirements. Consistent with changing political attitudes noted above, the leader of the Federal Australian Labor Party (ALP) announced his intention to repeal the ALP's restrictive policy on uranium mining at the ALP National Conference in 2007, thereby removing an anomalous constraint on the development of new uranium mines under any future ALP federal government.

The uranium market continued to strengthen through the quarter. At the end of June, the uranium spot price was US$45.50/lb U3O8, and the long term price was US$46.50/lb U3O8, (up US$5.00 and US$4.50 respectively), with upwards pressure still apparent.


Project Construction

Project construction is tracking very well, on budget and on schedule for the staged September 2006 start of commissioning and as, scheduled, project completion and hand over from GRD Minproc the Project Managers on 22 December 2006.

By the end of June 2006, the total project was 83% complete, with on-site work at 62% completion.

The construction workforce of 603 people on site will peak between 750-800 people in the next month. Importantly, no lost time incidents have been reported, and the Langer Heinrich site achieved 500,000 lost time injury free man-hours in June.

Highlights of the recent quarter include:

- Major front end components comprising the crusher, apron feeder, and primary conveyors have been delivered and mechanically installed;

- The roof beam structure for the leach tanks have been completed, and pouring of the concrete roof sections is underway, and inner tank lining for the 4 leach tanks is in progress;

- Grade control drilling for the first 6 months of mining has been completed with strong correlation to the reserve model used in the BFS;

- The mining contractor has established site facilities and has commenced plant mobilization;

- Nampower have completed the high voltage switch yard with 10MVA transformers in place; and

- Namwater, which is constructing the 84km pipeline, is expected to complete this work end August with commissioning to follow.

In June, Paladin received formal Namibian government approval of the initial uranium sales contracts referred to in our last Quarterly Report.

Resource drilling east of Detail 1 area commenced in July. This is a approximately 4,000m RC programme expected to be completed end September after which an updated Mineral Resource will be estimated for the overall project (JORC and NI 43-101 compliant).

First Drawdown Under Bank Project Finance Facilities

The first drawdown under the US$71M bank project finance facilities was made on 30 June 2006.

The facilities are provided by Societe Generale Australia Branch (lead arranger), Nedbank Capital, and Standard Bank plc and comprise a 7 year project Finance Facility of US$65M and a standby cost overrun facility of US$6M.


Bankable Feasibility Study Progress

Work on the Bankable Feasibility Study continues under the management of Minproc, the BFS Manager. Metallurgical testwork has demonstrated and confirmed that a blend of arkose/mudstone hosted uranium mineralisation can be treated with greater than 90% recovery.

The Environmental Impact Assessment (EIA) process is now underway. Public participation meetings involving the first formal community consultations were successfully conducted in May with senior representatives of the Company participating in each meeting.

Considerable progress has been made in discussions with representatives of the Government of Malawi to finalise the terms of the Development Agreement within the next quarter.


Takeover Of Valhalla Uranium Limited

On 10 July, Paladin announced a takeover offer for all of the shares in Valhalla Uranium Limited (VUL) in consideration for 1 Paladin share for each 3.16 Valhalla share offered. The takeover documentation was filed with the ASX and ASIC on 24 July and may be inspected on Paladin's website ( Successful completion of the Valhalla takeover will significantly augment Paladin's uranium resource base in Australia.

Summit Resources (Aust) Pty Ltd (Summit Resources) (VUL 50% joint venture partner on the Mt Isa Uranium Properties), announced on 28 July 2006 that they are seeking through the Supreme Court to determine whether Resolute Limited (Resolute) and/or Mt Isa Uranium Pty Ltd (a wholly owned subsidiary of VUL) are in material breach of the Isa Uranium Joint Venture Agreement.

Paladin advised the market on the same day that it remains confident that none of the mentioned companies have been party to any material breach of its obligations under the Isa Uranium Joint Venture Agreement. Paladin noted that its off-market takeover bid for all the ordinary shares in Valhalla announced in respect of which its bidder's statement is conditional on, amongst other things, there being no breach by any party to the Isa Uranium Joint Venture Agreement of the terms of that agreement.

Paladin will continue to closely monitor developments in the allegations made by Summit and will keep the market informed if and when Paladin becomes aware of further material information in relation to this matter.

Executive Team Expansion

Paladin has continued to add to its experienced management team to facilitate the Company's rapidly growing activities.

Mr Dave Marsh joined the Company in June to assume the position of General Manager - New Business Development, based in Perth. Mr Marsh holds a Bachelor of Science (Engineering) degree from Leeds University in the UK, graduating with Honours as a Processing Engineer in 1980. He has 25 years experience in the mining and metallurgical processing sector, including a large part of his career in African projects. Mr Marsh has held senior technical and management positions with GRD Minproc Johannesburg, and Fluor South Africa. His most recent position was Manager Metallurgy and Process Development for Barrick Gold.

Mr Brendan O'Hara will join the Paladin management team in August as General Manager - Special Projects, also based in Perth. Mr O'Hara graduated with a Bachelor of Laws and Jurisprudence (First Class Honours) from the University of Western Australia in 1988, before joining a national law firm where he specialised in mergers and acquisitions, fundraising, securities law, and corporate regulation. Mr O'Hara then spent 13 years the Australian Stock Exchange in various roles including Manager, Companies (WA), and as State Director.

Paladin is gratified that it has attracted executives with the outstanding qualifications and experience of Mr Marsh and Mr O'Hara, which adds confidence to the Company's ambitious plans to establish itself as a premier uranium producer.

MSCI World Standard Index

Effective 1 June 2006 Paladin Resources Ltd, was added to the prestigious Morgan Stanley Capital International Inc (MSCI) World Standard Index Series for Australia in the Energy Industry Group sector.

MSCI is a leading global benchmark provider of equity (International and US), fixed income and hedge fund indices. MSCI provides global equity indices, which, over the last 30+ years, have become the most widely used international equity benchmarks by institutional investors.

Detailed financial results will be available shortly with the Company's other documents filed on Sedar ( as well as through the Company's website (

Paladin Resources Ltd is an Australian uranium exploration and development company listed on the Australian Stock Exchange ("PDN") and the Toronto Stock Exchange ("PDN"). Paladin is involved in the mineral resource sector with projects both in Australia and Africa. With the Langer Heinrich Uranium Project in Namibia currently under construction, the Kayelekera Project in Malawi undergoing a Bankable Feasibility Study, Paladin is well placed to become a major supplier of primary uranium to world markets.

A.C.N. 061 681 098

Contact Information