Paladin to sell stakes in Langer Heinrich, Manyingee for up to $205m

JOHANNESBURG (miningweekly.com) – Dual-listed Paladin Energy will sell a 24% stake in the Langer Heinrich uranium mine, in Namibia, and up to 75% of its Manyingee project, in Australia, for a combined $205-million.

Paladin, which owns 75% of the Langer Heinrich mine, has signed a nonbinding term sheet to sell a 24% stake in the mine to a global nuclear power industry participant for $175-million.

The deal, which is expected to close in the fourth quarter of this year, includes long-term arrangements for uranium offtake.

The parties are working to prepare definitive documentation for formal execution, including a sale and purchase agreement, a shareholders agreement and documentation for the uranium offtake arrangements.

If concluded, Paladin will hold 51% of Langer Heinrich and continue to be the operator of the mine.

Further, Paladin has signed a binding term sheet with MGT Resources, for the acquisition, over two stages, of 75% of the Manyingee project, excluding the Carley Bore deposit.

On closing of the transaction, MGT will acquire an initial 30% interest in the project for $10-million and will form a joint venture (JV) over the project with Paladin.

MGT will then have an option to acquire an additional 45% of Manyingee JV from Paladin for $20-million, exercisable for 12 months following Manyingee JV's preparation of a plan to conduct a field leach trial for uranium extraction by in-situ recovery method.

Under the terms of the agreement, MGT will issue Paladin options to subscribe for new shares equivalent to 5% of MGT's shares outstanding for a period of 12 months from closing of the transaction at A$0.06 a share; and options to subscribe for new shares equivalent to 5% of MGT's shares outstanding for a period of 24 months from closing of the transaction at A$0.08 a share.

Paladin will issue MGT options to subscribe for new shares equivalent to 2% of Paladin's shares outstanding for a period of 12 months from closing of the transaction at A$0.35 a share; and options to subscribe for new shares equivalent to 2% of Paladin's shares outstanding for a period of 24 months from closing of the transaction at A$0.45 a share.