Paladin makes Langer Heinrich move

Paladin Energy is calling for $215 million to restart the Langer Heinrich mine in Namibia and has lined up another taker for its product, evidence of what it says is a strengthening uranium market. 

Institutional investors have been offered Paladin shares at 72 cents apiece, an 9.8 per cent discount on its last closing price, to raise $215 million to bring Langer Heinrich back into production in 2024.

The mine was placed on care and maintenance in 2018 when uranium prices were sitting around the $US20 mark. Uranium futures are now hovering at $US58 a pound. It is considered one to host one of the largest uranium reserves in Namibia.

Paladin plans to allocate $116 million of the $215 million raised to the restart and the rest to working capital and fees.

In tandem with the raise, Paladin is also said it had secured a new tender award to a subsidiary of Duke Energy, a large US power utility.

Paladin already has an existing offtake deal with CNNC Overseas Uranium for up to 25 per cent of Langer Heirnch’s future life of mine

“With the strength of the company’s existing uranium sales offtake combined with the successful tender award and the continuing strong uranium market fundamentals, Paladin can now confidently work towards a formal commencement of the Langer Heinrich mine restart project,” Paladin chief executive Ian Purdy said.

“The improving outlook for uranium markets and the transition towards the decarbonisation of global electricity generation provides the platform for an exciting period ahead for Paladin.”

The call for capital comes on the same day that the company’s founder, John Borshoff, announced his new venture Deep Yellow would be merging with Vimy Resources.

It’s the latest in a round of corporate activity amid ASX-listed uranium companies, with Boss Energy and Bannerman both looking to raise capital for their respective projects in the last month.

Boss Energy also added to the uranium news flow this morning, informing the market it was on track for a final investment decision for its Honeymoon mine in South Australia which estimates will cost  $113 million to get running.

This outlay is set to be covered by a $125 million capital raise launched earlier this month.

Canaccord Genuity and Shaw and Partners Limited are acting as joint lead managers, joint underwriters and joint bookrunners to the Paladin placement.  

Prior to the trading halt, Paladin shares last traded at 79 cents.