Name and Location
Langer Heinrich uranium mine expansion project, Namibia.

Client
Paladin Energy, represented by its 100%-owned company Langer Heinrich Uranium.

Project Description
Langer Heinrich is a 2.6-million-pound-a-year uranium mine in the Namib desert, about 80 km east of Swakopmund. The mine was officially opened on March 14, 2007.

The Stage 2 expansion, which was completed in 2009, increased capacity to 3.7-million pounds of uranium oxide (U₃O₈) a year and involved expansions to the current alkaline leach/countercurrent decantation (CCD) and ion-exchange/drying circuits.

The Stage 3 expansion, completed in 2012, will increase production to 5.2-million pounds of U₃O₈ a year and  involved a new crushing and scrubbing circuit, as well as expansions to the leach, CCD, ion-exchange and tailings disposal facilities.

The Stage 4 expansion feasibility study, which is targeting a further production increase to ten-million pounds of U₃O₈ a year by mid-2014, will be designed to maximise the potential of this deposit.

Value
The Stage 2 production expansion cost an estimated $50-million.
Stage 3 will cost $71-million.

Duration
Production to Stage 2 nameplate levels were realised before the end of December 2009.

The ramp-up of Stage 3 was completed in the June quarter of 2012.

Latest Developments
The site is now self-sufficient in water, owing to the successful implementation of several initiatives.

The detailed designs for the tailings storage facility (TSF3) - the first full in-pit tailing deposition area - were completed during the December 2012 quarter and construction work started during this period.

Construction work on the TSF3 is ongoing and remains scheduled for completion in the December 2013 quarter.

Construction of the final TSF2 extension was mostly completed during the June quarter.

Also in December, an order was placed with Schauenburg MAB for the delivery of the first Hydrosort unit that will demonstrate the benefits of this technology in the beneficiation of the ore

The addition of the demonstration Hydrosort unit is progressing well in terms of time and cost, and commissioning of this unit is expected in the September this year.

Further, specific optimisation targets have been developed and initiatives resulting in further material reductions in reagent consumption are expected in the coming quarter.

Meanwhile, Paladin announced in June that it would sell a minority stake in the Langer Heinrich project as part of a strategic initiative to unlock value from the company’s assets.

Paladin has since abandoned its plans to sell a stake in the mine, opting instead for a capital raising, as the current depressed uranium price is unlikely to reflect the asset’s strategic value in the sales price.

MD and CEO John Borshoff says that Paladin can generate greater shareholder value through postponing the sales process until there is a more favourable uranium price environment.

The equity raising and other cost-saving initiatives will provide Paladin with adequate funding into the September quarter, even if the spot uranium price remains at its 12-month average of $42.50/lb.

The raising will also allow Paladin to defer the consideration of a potential divestment of equity in Langer Heinrich until a price reflective of the asset’s fundamental value can be obtained.

Key Contracts and Suppliers
Amec Minproc (DFS, as well as the engineering, procurement and construction management services).

On Budget and on Time?
With the continued support of Paladin’s Stage 1 financiers and the addition of two new lenders, the company is confident that the Stage 3 expansion of Langer Heinrich is on track, with construction finalisation and commissioning expected to reach nameplate capacity in the first quarter of 2012.

Contact Details for Project Information
Amec, Brittni Baum, tel +61 8 9347 4777 or email brittni.baum@amec.com; or Jane Gospel, tel +44 20 7539 1082 or email jane.gospel@amec.com.
Langer Heinrich Uranium, tel +264 64 413 450, fax +264 64 413 451 or email contact@lhupl.com.
Paladin Energy, tel +61 8 9381 4366, fax +61 8 9381 4978 or email paladin@paladinenergy.com.au.