TSX- and ASX-listed Paladin Energy has entered into an agreement to sell a 25% stake in the Namibia-based Langer Heinrich Mine (LHM) to wholly owned subsidiary of China National Nuclear Corporation (CNNC), China Uranium Corporation.

The offtake component of the agreement, which was signed in January, allows CNNC to buy its pro rata share of products at the prevailing market spot price. There is also opportunity for Paladin to secure additional long-term offtake agreements with CNNC. It is expected that the agreement will enhance the long-term growth and development of the Langer Heinrich operation.

Namibian President Hifi-kepunye Pohamba officially opened the mine on March 14, 2007 and the first commercial product shipment occurred in the same month.

When production started, LHM was the first conventional uranium mining and processing operation in the world to be brought online in more than a decade.

Paladin was able to deliver the project on schedule and within the original budget of $92-million, despite the significant cost pressures that were being experienced by the mining industry during the 20-month construction term.

The mine has subsequently completed two expansion projects and is currently producing uranium at a rate of 5.2-million pounds a year.

Site works began in September 2005 and the construction and staged commissioning of LHM was successfully achieved on December 28, 2006.

Project Overview
LHM is located on the western side of central Namibia and lies 80 km east of the major Port of Walvis Bay and the coastal town of Swakopmund.

Following the discovery of calcrete-hosted uranium mineralisation in the early 1970s, mining house Gencor conducted an extensive project evaluation over an eight-year period, from 1972 to 1980. The study indicated that the project had strong development potential, but it was subsequently placed on care and maintenance owing to depressed uranium prices.

In 1998, the project was sold to ASX-listed Acclaim Uranium, which also completed a favourable prefeasibility study at the time. However, adverse uranium market conditions and low prices in the late 1990s again curtailed development and Acclaim Uranium sold its holding in Langer Heinrich Uranium to Paladin Energy in 2002.

Following the acquisition, Paladin initiated a bankable feasibility study (BFS), which was completed in April 2005. The BFS confirmed that the project could generate highly attractive returns using defined reserves only.

Mineral Resources
Further drilling and detailed resource studies of LHM have increased the mineral resource and identified significant upside potential outside the original known areas of mineralisation.

At a cutoff grade of 250 parts per million uranium oxide (U₃O₈), the current mineral resource contains 25.3-million tons at 0.055% for 13 851 t U₃O₈ in the measured category, 70.1-million tons at 0.055% for 38 729 t U₃O₈ in the indicated category and 17.8-million tons at 0.06% for 10 335 t U₃O₈ in the inferred category.

In addition, the mine held run-of-mine stockpiles of 28.6-million tons at a grade of 0.042% U₃O₈ for 11 932 t U₃O₈.

A Stage 4 definitive feasibi- lity study is currently under way at LHM and is expected to be completed in the near future to potentially increase production to up to 8.5-million pounds a year, once the state of the economy justifies additional investment.

Geology
Uranium mineralisation at LHM is associated with the calcretisation of valley-fill fluvial sediments in an extensive tertiary palaeodrainage system.

Uranium mineralisation occurs as carnotite, an oxidised uranium and vanadium secondary mine-ral. The deposit extends over a 15 km length in seven higher-grade pods within a lower-grade mineralised envelope,

which is near- surface, 1 m to 30 m thick and between 50 m and 1.1 km wide, depending on the width of the palaeovalley.