Thursday, August 31, 2006

Aug 31 Uranium Stocks Update: Paladin Resources (TSE:PDN)

Paladin announced that its Langer Heinrich project, originally set to be commissioned in September of this year, actually was commissioned a month earlier than expected. In keeping with past deadlines, the company seems to be well worth the premium that investors are placing on it as it has yet to disappoint with any news incongruent with what they had originally detailed in their presentations; a very demonstrative and comforting statement thrown out by Paladin is that its Langer Heinrich project "remains within the stated US$92M 2005 BFS CAPEX budget."

In addition, it is expected that the first contracted shipment of uranium oxide concentrate from Langer Heinrich will be shipped in the first quarter of 2007. It is expected to produce 2.6 million pounds of U308 a year over the next 17 years.

The current uranium oxide price, by the way, is $48.50/lb as reported by uxc.com

In other Paladin news, Valhalla (being bought out by Paladin) and Resolute Mining are paying a quarter of a million dollars to Summit Resources to restructure Valhalla's Isa Uranium joint venture, in which Summit agreed to forego the option of acquiring the whole of the joint venture project after a notice period. This still does not resolve their attempted legal action in blocking Paladin's takeover of Valhalla, but it is a step in the right direction.

Finally, on a slightly more concerning note, Malawi rights groups are protesting Paladin's involvement in Malawi to start uranium production in 2008. Both the company's 16 year tax break and potential environental impact secondary to uranium mining have been raised as concerns. It would be interesting to see Paladin's response to this local opposition, although it has plenty of time to do so.

Still, as Paladin Resources' stock has jumped appreciably, the short-term plusses seem to definitely outweight the potential long-term negative at present.
 

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