PALADIN Energy is one of Australia's top 10 resources companies, but it wouldn't be around if not for a $200,000 cash injection and a "mad Hawaiian."
Speaking at a WA Business News Success and Leadership breakfast last week, Paladin Energy managing director John Borshoff revealed how close Paladin came to collapse in 2003.
For Paladin, 2003 was a particularly tough year, following its purchase of the Langer Heinrich uranium project in Namibia.
Funding options for the project were minimal, and as the company's share price dipped towards 0.8 cents, dissenters were circling the company and viewed Paladin as a potential takeover target.
"Three major uranium companies at the time had offered Paladin $2 million so we would be the global uranium arm of these groups, and they themselves never believed in uranium," Mr Borshoff said.
"Paladin was nearly broke at that time and this was becoming an all-too-familiar pattern that we just could not break away from."
But while en route to Manjimup late one evening, Mr Borshoff received an unsolicited telephone call from a Hawaiian investor.
"He said he represented the Contiguous Millennium Fund, saying he found Paladin on the internet, he believed in uranium also, liked our story, and was prepared to pour $200,000 into the company," Mr Borshoff said.
"We were trading below one cent per share and by that stage nobody outside of family and a few true believers even wanted to hear our uranium story.
"He didn't think we had much chance of surviving, but if we did, he would make a lot of money."
"As small as this amount was, this $200,000 cash injection did the job.
"It was a catalyst that kept us alive, if only just, but more importantly it helped get the dissenters off our back.
"I believe without that mad Hawaiian, Paladin might not have made it."
While Mr Borshoff admitted Paladin may have been sunk without that investment, it is his business strategy that has allowed the company to enjoy longevity.
Mr Borshoff has long held a belief in the viability of the uranium industry, even when government policy in Australia meant the resource was a dead metal.
"Somehow I continued to convince my board to stay uranium when absolutely no-one in the world was looking for the stuff," he said.
"It was lonely, it was risky, but I thought the reward was still there and it was just a matter of time."
Throughout the difficult times, Mr Borshoff maintained focus on the bigger picture, working on the Langer Heinrich project in Namibia, followed by the Kayelekera uranium project in Malawi.
"Even though we were almost bankrupt in those days we were still thinking clearly, we always had plans, we never substantially overran any budget, and our timings were kept in train," Mr Borshoff told those at the breakfast.
"It was all to do with getting those two mining operations established, building a project pipeline, which is incredibly important for a uranium mining house, and also building up that expertise for building, producing, marketing and managing and all of those other complicated things that uranium demands."
While this strategy would seem sound, the uranium industry brings with it problems that are not necessarily experienced by companies mining other metals.
Mr Borshoff said due to the politically divisive nature of uranium, difficulties arose that worked against the best efforts of key stakeholders.
"These problems can only be managed by a thorough and deep knowhow about the uranium industry and having a company structure that can handle a diverse number of issues," he said.
"In addition to management needing to gain a thorough understanding of the technical aspects of the industry, there is a need to appreciate how to deal with things like fear and false perceptions that plague all our stakeholders.
"No-one has a fear of gold or gold mining, no-one has a fear of copper or iron ore, and these businesses operate within this context, but a lot of people fear uranium and all things nuclear.
"Like the aircraft industry, lots of attention needs to be given to overcoming misinformation, people's perceptions and phobias, countering the effects of that innate fear that people feel about the technology."
Paladin's strategy for the future is to expand its operations beyond its two mines in Africa.
"We're preparing to open up operations in Australia from 2014 and beyond, and through merger and acquisition efforts we hope to add some more projects into our pipeline," Mr Borshoff said.
"The opportunities are really quite enormous ... we hope [Paladin] will become a global uranium supply company with operations in Africa, Australia, hopefully Asia and Canada."
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