Paladin Energy in its update for the quarter ended 30 September 2020 says the Company continued restart planning activities at the globally significant Langer Heinrich Uranium mine during the quarter with activities focusing on advancing the critical-path elements of the Langer Heinrich Mine Restart Plan.
Cash expenditure for the quarter was US$1.9M. Paladin continues to focus on minimising expenditure whilst advancing restart work at the Langer Heinrich Mine
The Company held US$32.4M of cash and cash equivalents as at 30 September2020 (excluding restricted cash of $1M). The Company’s guidance for FY2021 total expenditure remains atUS$9.5M, a 44% reduction from FY2020.
The Company continues to engage with potential customers with an ultimate view towards securing Uranium term-price contracts with sufficient term and value to underpin the restart of the Langer Heinrich Mine.
LANGER HEINRICH MINE RESTART PLAN
The Company continues to advance the critical-path elements of the restart at the Langer Heinrich Mine (LHM), including:
- Detailed mine planning supporting the preparation of contract mining commercial documentation
- Commencement of a detailed “as-is” condition survey of the processing plant
- Appointment of key contractors to undertake the following mining and processing engineering work packages:
- Update the Ore Reserve model by utilising detailed drilling information to reduce the block model size
- Assign more physical characteristics to the model to improve the understanding of ore variability and blending strategy for feed to the plant
- Update the Ore Reserve Statement with the higher resolution mining model and the detailed mine plan
- Complete contract mining tender documentation
- AMC Consultants Pty Ltdhave been appointed to assist in and deliver the mining work package
- Complete a detailed “as-is”condition survey of the processing plant, optimise critical restart priorities and prepare commercial documentation in preparation for the award of remediation work programs
- Continue process improvement design work, analysing historical downtime issues, modification impacts, influence of various reagent combinations, and the impact of mine feed variability
- Elemental Engineering has been appointed for process modelling and Lycopodium Minerals has been appointed to complete the process design.
URANIUM MARKET UPDATE
The TradeTech weekly spot price average for the September2020 quarter was US$31.57/lb, down3.5% from the June quarter although 25% higher than for the same quarter in 2019. Spot prices have drifted lower over the past quarter due to a combination of reduced levels of producer purchasing and modest levels of utility demand.
Production suspensions resulting from COVID-19restrictions are now anticipated to remove almost 20Mlb from 2020 output. In addition, Kazatomprom announced plans to maintain a 20% production cut through2021 and2022which is expected to remove an additional 14Mlb from global production and further tighten future supply dynamics.
The Russian Suspension Agreement Extension Act of 2020 was introduced to the US Senate in late-September. The revised trade agreement will reduce Russia’s access to the US market over time. In particular, the uranium component of the Russian supply quota will fall from the current level of 9.7Mlbpa to about 6.4Mlbpa by 2023 and be maintained at 2-3Mlb pa through 2040.
Construction of an additional four reactors was approved by China’s State Council in early September. The two units approved at the Changjiang site are notable in that they will be operated by China Huaneng Group, resulting in it becoming the fourth licensed nuclear power plant operator in the country.