Paladin Energy will raise $215m to restart its Langer Heinrich uranium mine
Paladin Energy is aiming to restart the Langer Heinrich uranium mine in Namibia after announcing an $215m capital raise.
Paladin Energy is aiming to bring its Langer Heinrich uranium mine in Namibia back into production in two years’ time after launching a $215m capital raise and signing up another customer.
The mine produced more than 43 million pounds of uranium oxide between 2007 and 2018 when it was put on care and maintenance.
Paladin has been working on a plan to bring it back into production for the past couple of years and is targeting a restart costing $US81m, with a 17-year mine life envisaged.
The company said in a statement to the Australian Securities Exchange it would raise $200m through an underwritten institutional placement at 72c per share with a share purchase plan for existing shareholders to raise a further $15m.
Following the capital raise the company will have $259m in cash and no debt, it said.
“This strong financial position de-risks the restart of the Langer Heinrich mine and positions the company well for further uranium marketing initiatives,’’ Paladin said.
“A formal restart project launch is expected in July 2022. The commencement of early works, including the mobilisation of key staff and contractors and ordering of long lead time capital equipment, will commence immediately.’’
Paladin is targeting commercial uranium production in calendar 2024, and after a 15 month ramp up phase, expects to hit peak production of six million pounds per year, which will extend for seven years.
Paladin owns 75 per cent of Langer Heinrich, with Chinese company and offtake customer CNNC Overseas Uranium Holdings owning the rest. CNNC has committed to buying 25 per cent of the mine’s production.
Paladin chief executive Ian Purdy said the fundamentals of the uranium market were strong.
“With the strength of the company’s existing uranium sales offtake with CNNC combined with the recent 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,’’ Mr Purdy said.
“The extensive work streams we have conducted reinforce our confidence in Langer Heinrich as a low-risk, robust, long-life operation that is poised to take advantage of the improving uranium market conditions and deliver sustainable value creation for all of our stakeholders.”
Paladin expects to spend $116m on restarting the mine and $99m of the new funds raised will be used for working capital and the costs of the raise.
Paladin also told the ASX it had won a tender with a subsidiary of US power utility Duke Energy to supply up to 2.1 million pounds of uranium over six years starting in 2024.
This would represent about 5 per cent of Langer Heinrich’s total production over this time, Paladin said. Paladin shares last traded at 79c.