Saturday, March 04, 2006

Mar 4 Uranium Stocks Update: Paladin Resources (TSE:PDN)

Australian-listed firm hopeful of starting uranium project in Malawi
March 3

Uranium miner Paladin (Africa) has said that it has reached a critical stage of negotiating with Malawian government for a permit that would turn into reality its 130 million U.S. dollars Kayelekera uranium project in Karonga in northern Malawi.

In a progress report of the project, Paladin said concurrent with a Bankable Feasibility Study (BSF), the company and the government are negotiating a state agreement which is a precondition for tapping project funding from international banks.

The mining license is the final stage that would kick-start the project.

The company said capital investment for the project is estimated at about 130 million dollars and covers mine development, working cash-flow and loan fund costs.

It said that based on a 2003 Principal Export Commodities study, the uranium project is estimated to earn between 60 million dollars and 95 million dollars in export revenue per year.

Exploration studies by Paladin have estimated Kayelekera's mine life at 11 years with an annual uranium (U3 O8) output of 1,000 tons per year.

Analysis: As I've said it before, Paladin has not missed any deadlines yet and judging by this report, is chomping at the bit to speed up any and all development. 130 million dollars is not cheap for a project, but the prospects of 1,000 ton/year production and double the export revenue projected (that study was done in 2003 after all) is well worth the cost.

Paladin's 2006 Global Resources Presentation Points:

(1) Paladin's Namibidan and Malawi projects were all previously investigated up to feasability, meaning that Paladin could bring uranium production up much quicker than others

(2) Malawi project will be up and running in 2008. Larger Heinrich in Namibia will have been running for over a year already.


Blogger collinsofsachse said...

Does Paladin have a similar tax situation tha that Urasia has ~ 42% tax?

12:43 PM  
Blogger charlottebandit said...

I'm wondering how sweeter PDN would be once Australia decides to embrace uranium mining.

12:46 PM  
Blogger Spelunca said...

paladin's situation is different because they're mining in a different country. as to Australia, i think the whole uranium environment will change, and not really for the better either. many companies, australian and canadian, have been waiting for the opportunity to mine uranium out of australia and i forsee an increase in uranium supply that will ultimately be detrimental to the price of uranium oxide and a quicker narrowing of the demand-supply gap. remember, the HEU expires in 2013 and the worst thing for uranium investors would be uranium supply increasing unexpectedly. having said that, it is of my opinion that there will be huge amounts of debate, protests, and heavy heavy regulations still in place to limit how much uranium gets pulled out of Australia

5:14 PM  
Blogger charlottebandit said...

I agree absolutely with what you wrote concerning public concern regarding vast uranium mining. How unfortunate for them!

I believe that "when", not "if", they allow major uranium mining in Aussieland, it will take about 1-1 1/2 yrs to prepare a mine for production. At least that gives us a cushion window to take profits if we so desire.

You're right about a major, unexpected uranium rise in Aussie will disrupt the rising cost of uranium.


I'm predicting $50-60ish for the spot price of uranium by the end of 2006.

8:00 AM  
Blogger charlottebandit said...

Also, I believe that uranium producers will probably lobby in Australia to have their deposits mined first over non-producers because they'll have deeper pockets to "convince 'under-the-table'" their hardened political posture.

We'll see.

8:02 AM  

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