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Paladin Energy's challenges at uranium mine shave 25% off company valuation

Published 12/11/2024, 10:50 am
Updated 12/11/2024, 11:30 am
© Reuters.  Paladin Energy's challenges at uranium mine shave 25% off company valuation
PDN
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Paladin Energy Ltd (ASX:PDN) is trading more than 25% lower today at $7.20 after lowering its production guidance after facing production challenges at its Langer Heinrich Uranium Mine in Namibia.

PDN has cut its FY2025 production guidance to 3.0-3.6 million pounds of uranium, down from 4.0-4.5 million pounds previously, and has withdrawn all other guidance in relation to FY2025.

This revised guidance is a result of the lower-than-expected production results for October at Langer Heinrich, and noting the “ongoing challenges and operational variability experienced to date in ramping up production at the Langer Heinrich mine”.

The company notes that the increased range of potential production outcomes will have a material impact on its unit operating costs and the realised price for uranium sales and it will reassess forecast capital expenditure given the project’s operational performance to date.

Paladin says first-half production will be down year-on-year but expects production to be higher in the second half of FY2025 as it continues to work through the current challenges encountered at the mine in ramping up operations.

The Langer Heinrich uranium mine is now seven months into a planned 21-month ramp-up period.

PDN expects production levels to increase as the overall ramp-up program progresses and due to the processing of higher-grade mined ore which is expected to commence in the second half of CY2025.

A planned shutdown, which will allow for various improvement and operational upgrades to be implemented at the LHM, is scheduled for the second half of November 2024 and is expected to run for approximately two weeks.

Yet the company remains confident of achieving a production run rate of 6 million pounds per annum at the mine by the end of CY2025.

The company will hold an investor call at 11am AEDT today to discuss the mine update and revised guidance.

Read more on Proactive Investors AU

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