Paladin bides time as uranium market turnaround gets under way

29th August 2015 By: Henry Lazenby - Creamer Media Deputy Editor: North America

Paladin bides time as uranium market turnaround gets under way

Photo by: Bloomberg

TORONTO ( – Dual-listed Paladin Energy has narrowed its 2015 after-tax net loss attributable to shareholders, saying it was optimistic about a long-awaited uranium market turnaround getting under way.

For the 2015 financial year ended June 30, the Perth, Western Australia-based uranium producer reported a net loss attributable to shareholders of $267.8-million, compared with a net loss of $338.4-million a year earlier.

The sales volume for the year was 5.37-million pounds of uranium oxide (U3O8), significantly less than the 8.67-million pounds produced in the previous year, mainly ascribable to the Kayelekera mine, in Malawi, being placed on care and maintenance in May of 2014, as the uranium price fell.

Sales revenue for the year declined by 39% from $328.8-million in 2014 to $198.6-million in 2015, as a result of a 2% decrease in the realised sales price and a 94% decrease (3.27-million pounds) in the sales volume from Kayelekera. The last of the Kayelekera finished goods were sold in December 2014.

The average realised uranium sales price for the year ended June 30 was $37/lb U3O8, slightly below the previous-year level.

The company reported a gross profit for the year of $1.8-million, a turnaround from a $65.1-million gross loss, including a gross loss of $60.3-million from Kayelekera, in 2014.

Paladin booked a $180.8-million impairment charge (after tax) for its Queensland exploration assets.

As at June 30, Paladin had $183.7-million cash in the bank.

Paladin noted that the TradeTech U3O8 spot price at the end of June was $36.25/lb, about 29% higher than at the end of June last year, when prices were close to a nine-year and post-Fukushima low.

The company expected its cornerstone Langer Heinrich mine, in Namibia, to produce between 5-million pounds and 5.4-million pounds of uranium in the 2016 financial year,

Paladin had several contracts for 2016 with a fixed price element. Based on the current spot uranium price, the company would expect a weighted average premium of $4/lb for its 2016 received selling price.

The company was targeting the Langer Heinrich operation to deliver average C1 cash costs in the range of $25/lb to $27/lb, a 7% to 14% improvement on 2015.

Paladin expected to be cash-flow neutral throughout the 2016 financial year. 

The uranium miner's TSX-listed stock had gained 15% this week, closing  up 2.7% on Friday at C$0.19 apiece.