The Namibian (Windhoek)

29 July 2014

Namibia: Langer Heinrich Produced Record 2 537 Tonnes in June Quarter

PALADIN Energy's Langer Heinrich mine in the Erongo Region produced 2 537 tonnes of uranium, in the quarter ending June this year.

When compared to the same period last year, this figure is up by 5,7% the company said yesterday in results posted on the Namibian Stock Exchange.

But when compared to the first quarter of this year ending March, production dropped slightly, the company said.

During the period to June, a minority stake in the mine was sold to Chinese firm, CNNC for US$170 million.

Langer Heinrich said process plant again maintained steady improvement during the quarter and the fiscal year. Throughput for the year was up 8,2% and feed grade down by 3,6% from the previous year.

Overall recovery for the year increased from 86 % in 2013 to 87% this year.

"The process optimisation strategy has focussed on continuous improvement during the year, seeking to better utilise existing equipment to make further production and unit cost gains where possible," the company said.

This process has also focussed on reducing unit water consumption with considerable success.

The company said over the last two years, water consumption per tonne has been reduced.

"Water supply to the project continues to be sufficient, stable and secure under the water supply agreement signed with NamWater in November 2013. This initial one-year agreement which is based upon the supply of desalinated sea water from existing infrastructure is being re-negotiated to extend the term and rationalise the price," the company said.

Paladin's overall uranium sales for the quarter generated revenue of US$69,28 million, representing an average sale price of US$38,24 per pound. Annual sales for the year ending June were worth US$ 328 million representing an average sales price of US$37, 95. The company also operates a mine in Malawi.

On 24 June, the settlement associated with the sale of a 25% joint venture equity stake in its flagship, to CNNC Overseas Uranium Holding Limited, a wholly-owned subsidiary of China National Nuclear Corporation (CNNC), the leading Chinese nuclear utility, for consideration of US$190 million was completed in Beijing.

"With this major initiative to joint venture a minority equity stake in Langer Heinrich now completed, the door is open to pursue other opportunities, utilising the unique platform Paladin has developed in the global uranium mining industry, to further consolidate and strengthen its balance sheet. This will, in turn, also prepare the company for growth into a major uranium producer," the company said.

Commenting on the uranium market, the company said the June quarter saw a decline in the uranium spot price to US$29 per pound in early May before seeing trading in a narrow range of US$28 to US$28, 25 per pound for the remainder of the period.

During May, China announced the commercial operation of two reactors, bringing the total operating nuclear fleet to 20 reactors. A further 29 reactors are under active construction with 57 units in the planned category.

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