Paladin hits cash-flow positive FY 2016 despite marred market

TORONTO (miningweekly.com) – TSX- and ASX-listed uranium producer Paladin Energy has achieved its full-year fiscal 2016 objective of being cash-flow positive on an 'all in' basis, excluding one-off restructuring costs and capital management, it said Monday.

The Perth, Western Australia-based company reported fourth-quarter sales from its cornerstone Langer Heinrich mine, in Namibia, of 1.8-million pounds uranium, at an average selling price of $34.91/lb, which was a $7.41/lb premium to the average spot price of $27.50/lb during the period.

This was a significant improvement over the third quarter, when it sold only 595 000 lbs of uranium oxide (U₃O₈) at an average price of $34.67/lb.

During the period ended June 30, Langer Heinrich produced 1.11-million pounds U₃O₈ and drummed one-million pounds of yellow cake, down 14% and 21% respectively versus the previous quarter.

Ore milled at 842 861 was down 14% quarter-on-quarter and the average plant feed grade of 670 ppm U₃O₈, was also down 5% over the previous quarter, the company reported.

Overall recoveries improved by 4% over the prior quarter to 89.2%.

Paladin said that the quarterly C1 cash cost of production of $26.60/lb, compared with guidance of $25/lb to $27/lb, was in line with its plans to significantly lower the fiscal 2017 guidance, owing to changes to the mine plan to substantially reduce cost levels.

The company was keeping its Kayelekera mine, in Malawi, on care and maintenance.

Paladin noted that it was in advanced discussions with parties regarding strategic investment transactions, with an announcement expected before month-end.

During the quarter, the company sustained two lost-time injuries.

The spot uranium price had been crawling sideways and aiming south in recent months, having last week fallen to $26.40/lb, down more than 31% in the past 12 months.

Paladin’s TSX-listed stock on Monday gained more than 16% to C$0.22 apiece.