Paladin’s revenue spikes 79%
A downturn in the spot price of uranium has not deterred production at Paladin Energy’s Langer Heinrich operation. Langer Heinrich produced 27% more uranium oxide while Paladin has been able to achieve sales revenue growth of 79% for the quarter ended 31 December 2014, compared to the third quarter in 2014. This spike in revenue is based only on the output of the Langer Heinrich mine since Paladin’s second African uranium mine in Malawi is under care and maintenance. John Borshoff, Managing Director of Paladin said, “Total sales for the quarter were 1.911Mlb U3O8 with an average selling price of US$36.58 per pound. This produced revenue of US$69.9 million and was a 79% increase over the previous quarter’s revenue.
These figures are within the guidance provided in the September quarterly report. The TradeTech weekly spot price average was US$37.66 per pound.” Despite a surge in revenue, Paladin has initiated a number of cost-cutting measures at its Langer Heinrich operation which should be implemented by the end of the March quarter. Said Borshoff, “The construction of the Bi-carbonate recovery project is well advanced and remains on schedule for commissioning in the March quarter. After a short assessment period, the next phase of the overall optimisation programme will commence.” “This fully commissioned facility will reduce reagent costs and improve site water balance,” added Borshoff. “The process optimisation strategy continues to focus on better utilisation of existing equipment, unit operating costs, operator training and supervision and the further integration of process control,” he alaborated. According to Borshoff, Paladin had managed to secure a year-long water supply agreement and was optimistic of an extension. Talks have not yet been concluded on the sale of the desalination plant to the Namibian Government by its French owner, Areva, but Borshoff remains confident. He said, “It is expected that the acquisition of this plant will provide further stabilisation to the longer-term water supply.”
While activities in Japan appear to support an increase in the spot price of uranium, some ground has been lost from the highs witnessed in 2014 of US$44 per pound. During 2014, uranium traded as low as US$28.10 per pound, then recovered to US$44 per pound, falling back slightly late in the year to US$35.50. Said Borshoff, “During the December quarter, the uranium spot price continued to demonstrate significant volatility, having risen from US$28.10 per pound in mid calender year 2014, reaching US$44.00 per pound by the middle of November. However, during the latter half of the fourth quarter, the spot price declined to US$35.50/lb, as near-term demand decreased and a limited number of suppliers reduced offer prices to complete end-of-year sales.”