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Main ForumPaladin disappointing production

  • Could this be why Gillian Swaby sold a heap of shares recently?

    Paladin unlikely to meet uranium target 27/01/2010 6:38:23 PM

    Uranium miner Paladin Energy Ltd will probably fail to meet its full year production guidance after disappointing ramp up rates at its second African mine, an analyst says.

    Paladin's December quarter report says production at its second mine, Kayelekera in Malawi, is ramping up at slower than planned rates "but rapidly improving".

    Paladin said conventional components of the plant were running well but there had been throughput issues with a screening facility.

    "Although the challenges ... have restricted planned production, steady improvement in performance is evident," the miner said on Wednesday in a statement.

    "A significant step change in production is expected during February, the expectation remaining that nameplate capacity will be achieved by the end of the March quarter."

    Slow ramp-up at Kayelekera and Paladin's first mine, Langer Heinrich in Namibia, during the September quarter prompted the company in October to revise downwards its full year output target.

    It now expects to produce between 5.6 and 6.1 million pounds of uranium oxide, from 6.6 million pounds previously.

    "Continuing problems mean the uranium producer is unlikely to meet its full year production guidance," IG Markets research analyst Ben Potter said.

    Langer Heinrich reached optimal `stage two' production levels mid December quarter, boosting the company's total output to 987,310 pounds, up from 744,188 pounds in the September quarter.

    The company also said on Wednesday its capital cost estimate for the stage three Langer Heinrich expansion had jumped to $US99.5 million ($A110.49 million) from $US71 million ($A78.85 million) previously.

    The miner said it was well advanced with a trial shipment of uranium to China "to test and demonstrate the efficiency of logistics from Africa to Chinese conversion facilities".

    Its existing customers are largely nuclear power plant operators in Europe.

    Paladin said it concluded a new long-term sales contract with a major Asian utility during the December quarter for four million pounds of uranium oxide.

    The contract commences in 2012 "on terms which will capture the expected strengthening market price".

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