Paladin to restart uranium mine in Namibia
Paladin Energy Limited has announced the results of the Langer Heinrich Mine Restart Plan. The Restart Plan marks the completion of an extensive work package aimed at delivering a reliable mine into production under the right Uranium pricing environment.
HIGHLIGHTS
- The Restart Plan is now complete confirming restart capital, costs and operational performance;
- Langer Heinrich can be brought back into production for US$81M of pre-production cash expenditure, allocated as (a) operational readiness (US$34M) required to mobilise the workforce, undertake maintenance and provide the working capital requirements to commence production; and (b) discretionary capital (US$47M) specifically aimed at improving process plant availability and reliability to lift production capacity by more than 10%.
- Low restart capital intensity (US$14/lb) and competitive C1 Cost of Production (US$27/lb) confirms Langer Heinrich is well positioned alongside other Tier 1 operations to deliver product into a recovering Uranium market;
- The Restart Plan has confirmed a 17-year mine life for Langer Heinrich with peak production of 5.9Mlb U3O8 per annum for 7 years;
- The Life of Mine Plan outlines three distinct operational phases being Ramp-up (year 1), Mining (year 2-8) and Stockpile (year 9-17). The utilisation of stockpile material in the Ramp-up phase greatly reduces operational start-up risk and provides a strong platform for the operation to move toward nameplate capacity within a 12-month period;
- Langer Heinrich remains fully permitted to resume mining and Uranium exports; and
- Paladin’s cash position of US$35M provides financial flexibility and the Company will only consider a restart when it secures an appropriate term-price contract with sufficient tenor and value to deliver an appropriate return to all stakeholders.
Paladin CEO, Ian Purdy said “The completion of the Langer Heinrich Mine Restart Plan is a significant step forward for the Company and completes the vast amount of study work undertaken over the past 18 months.
“The operational and economic parameters identified in the chosen restart plan show the strategic significance of the Langer Heinrich asset and highlight the potential economic returns that can be delivered under the right Uranium price environment.”
“Paladin will continue to refine and progress work packages under The Restart Plan and I look forward to updating the market on our ongoing activities.”
The release of the Langer Heinrich Restart Plan marks the conclusion of the Company’s 18-month prefeasibility and optimisation study work programmes. The selected restart option provides a low risk, reliable restart plan balancing the ability to rapidly respond to strengthening Uranium prices and maximising asset value.
Paladin is Well Positioned in an Improving Uranium Market
The Company remains poised to take advantage of the growing structural Uranium supply deficit in global markets. Spot prices have increased by 36 percent since the start of January 2020 to approximately US$34/lb U3O8.
The Company notes continued primary production cuts and US utility contract coverage reaching critical lows. Securing term contracts remains key to the restart of Langer Heinrich.
The Langer Heinrich Mine remains competitively positioned versus other suspended mines, highlighted through modest restart capital and competitive operating costs, further underpinned by a proven product quality and a globally significant operation with lower incentive prices than greenfield projects.
Paladin Energy is an Australian listed uranium company focussed on maximising the value of its 75% stake in the Langer Heinrich Uranium mine in Namibia.
Langer Heinrich is a globally significant, long-life operation, having already produced over 43Mlb U3O8 to date. Operations at Langer Heinrich were suspended in 2018 due to low uranium prices.
Beyond Langer Heinrich, the Company also owns a large global portfolio of uranium exploration and development assets. Nuclear power remains a cost-effective, low carbon option for electricity generation.
