22/01/2009 - 13:31

Paladin tracking nicely in Africa

22/01/2009 - 13:31

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Paladin Energy has exceeded production capacity at its Langer Heinrich uranium mine for a second consecutive quarter as it extends its takeover bid for Fusion Resources.

Paladin Energy has exceeded production capacity at its Langer Heinrich uranium mine for a second consecutive quarter as it extends its takeover bid for Fusion Resources.

In its December quarterly report released today, Paladin said the Namibian mine produced 673,982 pounds of uranium, up from the previous quarter's 650,560lbs.

"This places the operations in a good state of readiness to accept the integration of Stage II expansion and commence the increasing of annual production capacity to 3.7 [million pounds uranium oxide]," Paladin said.

"This new design production target is expected to be achieved during the quarter ending June 2009."

Stage one of the operation had a production capacity of 2.6mlbs each year.

Paladin said production for the six months to the end of December was 1.32mlbs, just 4 per cent shy of the production target for the period due to the delayed commissioning of the front end section for stage two.

The company sold 245,000lbs of uranium oxide during the December quarter at a value of $US13.23 million ($A20 million) or at $US54 per pound, slightly lower than the spot price during the period.

Paladin said contracted sales in the second half of this financial year are 698,000lbs of uranium oxide.

Meantime, construction of stage two of the Langer Heinrich mine is running two months behind schedule however costs are still pegged at $US50 million.

Paladin said detailed engineering is 95 per cent complete and all orders for bulk material have been placed.

A study into a stage three expansion of the mine to lift the production rate to 6mlbs per annum in 2010 is progressing with the investigation to be wrapped up sometime this quarter after being extended.

Meanwhile, Paladin's second uranium mine, Kayelekera in Malawi, is scheduled to start commissioning this month with production ramp-up scheduled for later in the quarter.

The project is currently 90 per cent complete and Paladin said it is finalising the necessary uranium sales documents.

"The agreement commits Kayelekera to deliver more than 1Mlb [uranium oxide] to a North American utility customer during 2011-2013 at specified sale prices which are reflective of the current term uranium price," Paladin said.

On the acquisition front, Paladin has extended its takeover deadline for Fusion from January 22 to February 12.

Paladin has been steadily increasing its stake in Fusion since it launched its takeover bid last month and currently holds a 79.25 per cent.

The acquisition will consolidate Paladin's land holding in Queensland, where it has a majority interest in several uranium exploration tenements in the Mt Isa region.

Shares in Paladin were up five cents to $3.02 at 15:46 AEDT.

 

 

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