Paladin Energy Ltd ("Paladin" or "the Company") (TSX:PDN)(ASX:PDN) is pleased to
provide its Quarterly Activities Report for the three month period ended
December 31, 2011.
HIGHLIGHTS
-- Achieved record quarterly production results on both operating sites.
-- LHM 932,731lb up 4% on previous quarter
-- KM 534,201lb up 15% on previous quarter
-- LHM achieves 1 year zero LTI's and KM 5 month LTI free end Dec 2010.
-- Slower KM ramp-up will result in overall guidance downgrade from 7Mlb to
between 6.0Mlb - 6.3Mlb for FY11.
-- Expansions:
-- Stage 3 LHM delayed. Commissioning to start late March quarter
-- Stage 4 LHM Feasibility Study underway with completion expected late
September quarter
-- Sale of 1,273,922lb U3O8 at an average realised price of US$52/lb
(previous quarter US$46.50/lb).
-- Acquisition of the Aurora uranium assets in Canada adds significant
project to Paladin pipeline.
-- Odin adds an Inferred Mineral Resource of 10.3Mlb U3O8 at 0.06% to the
Mount Isa Projects inventory.
-- Corporate:
-- US$300M successfully raised via 5 year Convertible Bond expiring Nov
2015
-- Existing US$250M Convertible Bond expiring Dec 2011 successfully
bought back
-- Completion of takeover of NGM Resources
-- Spot uranium price continues to strongly increase with Ux quoting
US$68/lb mid January.
SAFETY
Safety throughout the Group continues to improve with no Lost Time Injuries
(LTIs) recorded for the quarter at its Langer Heinrich Mine (LHM) or Kayelekera
Mine (KM). During the period at LHM, an external safety, health and environment
audit by NOSA was conducted with the preliminary result being that the site
continues the 4 Star Platinum rating with an improved overall performance.
Implementation of the NOSA safety system at Kayelekera in preparation for a
similar external safety, health and environmental audit in the June quarter is
underway.
QUARTERLY URANIUM SALES
Sales for the quarter were 1,273,922lb U3O8 generating revenue of US$66.3M,
representing an average sales price of US$52.00/lb U3O8 (average Ux spot price
for the quarter was US$56.71/lb U3O8).
The Ux spot price increased from US$46.50/lb U3O8 at the end of September to
US$62.50/lb U3O8 at the end of December. The Ux long term price indicator rose
from US$60/lb U3O8 to US$65/lb U3O8 during the quarter.
GLOBAL PRODUCTION FOR 2010
The overall production for calendar year 2010 of 5,429,863lb has increased 74%
from the previous year's production as shown in the table below.
---------------------------------------------
LHM KM Total Paladin
-----------------------------------------------------------------
Production lb 2010 3,688,203 1,741,660 5,429,863
-----------------------------------------------------------------
Production lb 2009 2,875,496 253,616 3,129,112
-----------------------------------------------------------------
Progressive quarter by quarter production of the combined operations is as follows:-
----------------------------------------------------------------------------
LHM + KM Mar qtr June qtr Sept qtr Dec qtr
----------------------------------------------------------------------------
Production lb U3O8 1,157,375 1,442,842 1,362,713 1,466,932
----------------------------------------------------------------------------
LANGER HEINRICH MINE (LHM), Namibia
Production
----------------------------------------------------------------------------
LHM Mar qtr June qtr Sept qtr Dec qtr
----------------------------------------------------------------------------
Production lb U3O8 928,370 927,373 899,735 932,731
----------------------------------------------------------------------------
Langer Heinrich continues to operate at nameplate capacity and in the December
quarter delivered record production.
Mining
Mining activities have been advanced prior to Stage 3 initiation, with three
working areas expected to supply ore feed in 2011. Mining and plant ore feed
month by month over the half year to December 2010 were as follows:-
------------------------------------------------------------
July Aug Sept Oct Nov Dec
---------------------------------------------------------------------------
Ore mined (t) 116,706 363,344 746,818 408,185 154,824 34,594
---------------------------------------------------------------------------
Grade (ppm) 744 930 864 790 690 593
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Additional low
grade ore
mined (t) 52,291 38,648 132,256 116,270 59,424 41,602
---------------------------------------------------------------------------
Grade (ppm) 286 327 344 337 351 307
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Waste/Ore ratio 5.9 2.4 0.59 1.77 6.62 33.01
---------------------------------------------------------------------------
------------------------------------------------------------
July Aug Sept Oct Nov Dec
---------------------------------------------------------------------------
Ore crushed, dt 182,072 179,714 186,080 173,100 187,900 214,800
---------------------------------------------------------------------------
Ore grade, ppm
U3O8 994 881 1048 1036 915 844
---------------------------------------------------------------------------
Mining operations were carried out as planned, with large month to month
variations in ore vs waste, as additional areas were prepared for mining in
2011. A high percentage of the waste material is being utilised for the new
in-pit tailings facility which is expected to be operational in the June
quarter. This waste was intentionally mined in December resulting in a high
strip ratio for that month and will normalize back to historic levels going
forward.
Process Plant
Tonnage through the process plant was the highest ever at over 575,000dt crushed
beating the previous quarterly record of 550,000dt.
Performance of the front end circuits is satisfactory. The Stage 3 expansion
features a much larger and robust scrubber as well as various circuit up-grades
that will improve performance.
The leaching circuit extraction rate increased to 92% for the December quarter
with an average of 94.2% in December. Leaching circuit vessels are now
completely insulated and cost reductions as a result of this programme are
currently being evaluated. The Stage 3 expansion includes a new system of slurry
heating which has been designed around the results of a year long site based
pilot plant trial. This new system will reduce operational dependence on the
current spiral heat exchangers.
Counter-Current Decantation (CCD) and Ion Exchange (IX) combined operationally
to a wash efficiency of 73.3%. Performance in this area is under review as an
increase in efficiencies will provide an excellent opportunity to improve
production and reduce costs.
The precipitation and drying areas are working above capacity and have the
capability to perform well above nameplate. This was particularly evident in
December when the product thickener was cleaned out for maintenance resulting in
much higher than normal packaging levels.
Stage 3
Construction continued through the December quarter and is expected to be
completed in the March quarter, allowing production commissioning and ramp-up to
proceed.
The Stage 3 expansion project at LHM, which is increasing the existing plant's
throughput to 5.2Mlb pa, is now 85% complete and is progressing well.
The project is now scheduled for mechanical completion late in the March
quarter. This is delayed from the original schedule that anticipated completion
by January 2011. Critical path equipment, including boilers and IX columns, were
delayed arriving at site and as such have pushed back expected mechanical
completion by approximately 2 months.
The budget is expected to be contained within 25% of the approved budget
forecast; this includes recent foreign exchange movements.
Stage 4
A Bankable Feasibility Study has been initiated following the updated Resource
and Reserve statements provided in the last quarterly report for the expansion
of LHM to 10Mlb U3O8 pa. The study is investigating a new plant to be located
adjacent to the existing plant with total production capacity of around 8.7Mlb
U3O8 pa. In addition, the potential for heap leaching or upgrading the below
cut-off grade material/mineralised waste rock to recover a further 1.3Mlb U3O8
pa is also being investigated. This feasibility study is scheduled for
completion by the last quarter of CY2011.
KAYELEKERA MINE (KM), Malawi
Production
---------------------------------------------------------------------------
KM Dec 09 qtr March qtr June qtr Sept qtr Dec 10 qtr
---------------------------------------------------------------------------
Production lb U3O8 145,315 228,996 515,478 462,977 534,201
---------------------------------------------------------------------------
Although a record level of production occurred at Kayelekera, performance during
the quarter was hampered by intermittent electrical power generation outages
resulting from earlier than scheduled mechanical overhauls of the on-site diesel
power plants. The impact of these outages was reduced as 3 redundant diesel
generators with an overall capacity of approx 2.8MW were relocated from Langer
Heinrich and were installed mid-December. The reliability of the main Hyundai
power plant had been impacted by the logistics chain to Malawi, however is now
functioning well.
During times of consistent power operation the plant did operate at or near
design levels. This is expected to improve with increased operational
efficiencies and plant utilisation. Overall recovery levels have improved
significantly contributing to higher production levels.
Mining
The mining and plant ore feed month by month for the half year ending December
2010 were as follows:
------------------------------------------------------------
July Aug Sept Oct Nov Dec
---------------------------------------------------------------------------
Ore mined (t) 105,108 132,720 82,054 140,572 43,000 44,786
---------------------------------------------------------------------------
Grade (ppm) 1906 1555 2111 1865 1003 1504
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Additional low
grade ore
mined (t) 39,680 33,473 49,073 13,448 56,905 17,144
---------------------------------------------------------------------------
Grade (ppm) 513 509 515 546 513 491
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Waste/Ore ratio 1.2 1.75 2.3 1.2 3.0 2.8
---------------------------------------------------------------------------
Operating data - Process
Clearly evident from the data below, the plant when operating, is running at
design levels. For instance, on a strictly ratio basis, the plant running at
2000 hrs per quarter (of 2200 hrs available) would produce at 95% of nameplate.
Solutions to improving the running times have been identified and implemented
mainly involving process/maintenance operations with emphasis on the logistics
chain Further work is underway to achieve a consistent 2000 hours quarterly run
time.
--------------------
Dec qtr
-----------------------------------------
Operating time hrs 1380
-----------------------------------------
Mill feed, dry tonnes 228,764
-----------------------------------------
Grade (ppm) 1439
-----------------------------------------
Leach extraction % 90.1
-----------------------------------------
RIP efficiency % 88.4
-----------------------------------------
Overall efficiency % 78.0
-----------------------------------------
Process Plant
The crushing and grinding circuits have shown that they are capable of routine
operation for both wet and dry conditions.
Leaching extraction is operating at over 90% versus 91% design. A modification
to the launder system, when complete, is expected to improve extraction to at
least design. Acid production on-site continues to run as per demand.
Resin-in-Pulp operational issues are being systematically mitigated, with
efficiencies currently at 88.4% and regularly well over 90% for extended
periods. Further increases in RIP efficiency continue as improved resin
management and preventative maintenance processes are established.
The back end of the plant (uranium precipitation and packaging) is operating at
nameplate.
Lender's Test
The 90 day continuous testing of 10 specific operational parameters, including
tonnage throughput, grade reconciliation to resource model, overall recovery,
production targets and unit costs, began on 1 November. Power disruption has
extended the test period, however the operation continues with the testing and
Paladin is confident it will be successfully completed within the required
timeframe.
Expansion Study
Paladin's operational development team has formally embarked on design of the
plant expansion to 3.8Mlb pa. As has been the case with expansions at Langer
Heinrich, data derived from current Kayelekera operations will be valuable to
reliably provide design and construction methods which, when initiated, will
raise production capacity to stated levels and provide enhanced operation
ability. This study is expected to be completed within the next 6 months.
GUIDANCE STATUS
Despite increased efficiencies and record production at Kayelekera, ramp-up
delays in the first half of the year at the operation due to abnormal down-time
resulting from power and maintenance disruptions have impacted FY11 production
expectations. As a result production guidance for FY11 is reduced to a range of
6.0Mlb to 6.3Mlb versus the 7Mlb currently forecast. Management is confident
that this conservative revision will be met and installed capacity will be
maintained going forward as operational efficiencies and plant availability are
improving.
MOUNT ISA REGION PROJECTS, Queensland
Work in the quarter included a maiden Mineral Resource estimate for the Odin
orebody. The resource drilling programme at the Bikini deposit was completed in
late December and the Skal programme is expected to be completed following the
resumption of drilling in late March 2011.
MOUNT ISA URANIUM JOINT VENTURE (Paladin Energy Ltd 50%, Summit Resources (Aust)
Pty Ltd 50% Operator)
Odin Uranium Deposit
The Odin deposit is part of the Valhalla Project and is located 40km north of
Mount Isa on EPL 17514.
The maiden Mineral Resource estimate is based on 99 holes totalling 16,044m. The
Odin deposit now has a strike length of 600m and contains two mineralised
lenses. The main lens trends north-north-east and dips 50 degrees - 60 degrees
to the east. The smaller southern lens strikes north-south and dips steeply to
the east. Following compilation and consolidation of all data into a resource
dataset, an initial Mineral Resource estimate has been completed. The Mineral
Resource is currently classified as Inferred, primarily due to drill spacing and
the number of bulk density determinations within the dataset. Additional
drilling is expected to be undertaken in 2011, after the wet season, following
on from the drilling at Skal with an updated Mineral Resource estimate expected
June quarter.
The initial Inferred Mineral Resource estimate for the Odin uranium deposit is
quoted using a cut-off grade of 250ppm U3O8.
Grade ppm
Mt U3O8 t U3O8 Mlb U3O8
----------------------------------------------------------
Inferred Resources 8.2 573 4,685 10.3
----------------------------------------------------------
(Mineral Resource quoted on 100% basis)
The Mineral Resource estimation was completed using the same methodology (Multi
Indicator Kriging) as that undertaken at Valhalla, with the dataset derived
predominantly from downhole radiometric logging using company owned, calibrated
equipment. The radiometric grades have also been extensively validated against
laboratory assays.
Skal Uranium Deposit
At Skal a resource development drilling programme of 28 holes totalling 4,566m
was halted in early December due to the wet season. Encouraging results so far
include:
SD0129 from 50m to 91m down hole, totalling 41m at 838ppm U3O8
SR0138 from 165m to 215m downhole totalling 50m at 1,394ppm U3O8
A resource upgrade for Skal is expected late in the March quarter following
completion of the drilling programme.
Bikini Uranium Deposit
A 40m x 40m infill resource drilling programme was completed at Bikini in late
October 2010. Drilling included 66 holes totalling 10,527m. An updated resource
is expected to be completed in the first quarter of 2011 following compilation
and validation of all the data.
CORPORATE
Acquisition of Aurora Uranium Assets
Paladin announced in December 2010 that it had initiated its uranium business in
Canada and entered into a Definitive Agreement for the purchase of the uranium
assets of Aurora Energy Resources Inc. ("Aurora") a wholly owned subsidiary of
Fronteer Gold (TSX:FRG)(NYSE Amex:FRG) ('Fronteer"). Aurora Energy holds title
to significant uranium assets within the highly prospective Central Mineral Belt
("CMB") of Newfoundland and Labrador in Eastern Canada, including the Michelin
deposit (67.12Mlb Measured and Indicated and 36.08Mlb Inferred Resources of
U3O8) as well as the Jacques Lake, Rainbow, Nash, Inda and Gear deposits and has
secured the most prospective ground within the CMB.
NI 43-101 compliant U3O8 resources have been defined across all the deposits as
follows:-
-- 83.8Mlb U3O8 Measured and Indicated Mineral Resources (40.2Mt ore at
0.09%)
-- 53.0Mlb U3O8 Inferred Mineral Resources (29.0Mt ore at 0.08%)
The consideration for 100% ownership amounted to C$260.87M via the issuance of
52,097,937 shares in Paladin. This valued the current resources at US$1.90/lb.
Paladin considers the CMB to be one of the few remaining, underexplored uranium
districts globally and this acquisition not only provides Paladin with a
noteworthy mid-term development asset but also offers an excellent opportunity
for both significant new discoveries and expansions of the existing deposits.
This highly strategic transaction fulfils Paladin's long held ambition to expand
its footprint into Canada, a leading country in uranium mining, both in terms of
resources and its stable political and business environment, providing the
Company with an important new platform from which to plan its continued growth.
With this acquisition, Paladin's global uranium portfolio increases appreciably
and, with strong potential for additional uranium resource discovery to
complement the existing resource base, provides a genuine development
opportunity within the forthcoming decade.
Convertible Bond Issue
During this reporting period Paladin announced the successful issue of senior,
unsecured convertible bonds due October 2015 (Convertible Bonds).
The Convertible Bonds carry a coupon of 3.62% pa and are convertible into
Paladin shares at an initial conversion price of US$5.665 per share and
represented a conversion premium of approximately 32.5% above the reference
price of Paladin shares at the time of pricing.
The proceeds of the issue were used to fund Paladin's tender offer to acquire
from eligible bondholders its US$250M issue of convertible bonds due in December
2011, with any amount not applied to the tender offer being utilised to fund in
part the proposed expansion of the Langer Heinrich Mine and to pursue future
growth opportunities. The tender offer was fully accepted.
NGM Resources Ltd Takeover
On 10 December 2010 Paladin completed its takeover following compulsory
acquisition of the remaining shares. The total number of shares allotted in
relation to the acquisition of NGM was 7,116,001 fully paid shares.
Corporate Development Manager
Justin Reid, General Manager Corporate Development for Paladin has tendered his
resignation effective 1st February 2011. Justin will be returning to Canada with
his family and rejoining the capital markets. Justin is thanked for his
contributions to the Company during what has been an exciting period of growth.
Paladin is pleased to announce the appointment of Dr. Nicole Adshead-Bell, in
the role of Manager Corporate Development effective 1st February 2011. Nicole
has a Ph.D. in Geology from James Cook University, Queensland and worked as a
buy and sell side analyst specialising in both uranium and precious metals. Most
recently Nicole was a Managing Director, Investment Banking for Haywood
Securities Inc., in Vancouver focused on M&A in the mining and exploration
sector. Nicole will be based in Vancouver, Canada and supported in Perth by both
an analytical and IR team.
Uranium Market Comments
At the beginning of 2010 the uranium market was considered by some - but not
Paladin - to be possibly over-supplied and lacking in direction despite the
strong growth in new reactor commitments in China, India, Korea and the UAE and
re-affirmation of successful nuclear power programmes in Europe and the United
States.
The Ux spot price was US$43.50/lb U3O8 in January and the Ux long term price was
declining from US$62/lb U3O8 towards US$58/lb U3O8 in March. By the end of 2010
a different picture has emerged. Reported spot volumes of over 50Mlb U3O8
(equivalent) almost matched the record set in 2009, and reported long term
contracting volumes of over 240Mlb U3O8 (equivalent) approached the record of
250Mlb U3O8 (equivalent) set in 2005 (when the average annual long term price
was US$30.73/lb U3O8). Reflecting these trends the Ux spot price recovered to
US$62.50/lb U3O8 in December 2010 (and subsequently rose to US$68/lb U3O8 in
mid-January 2011) and the Ux long term price also began moving upwards. On the
production side it seems that the recent year-on-year increase in uranium
production has slowed. Preliminary figures indicate global production rose by 8%
in 2010, less than half the increase between 2008 and 2009, and that Kazakhstan
accounted for more than 75% of the increased output.
Like other commodities, uranium is now showing signs of price recalibration as
industry participants re-focus on medium and long term supply and demand issues.
Paladin is exquisitely placed to provide new supply into this exciting and
growing market.
Yours faithfully
Paladin Energy Ltd
JOHN BORSHOFF, Managing Director/CEO
Declaration
The information in this announcement that relates to mineral resources is based
on information compiled by David Princep BSc MAusIMM for Mineral Resources. Mr
Princep has sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the activity that
he is undertaking to qualify as Competent Persons as defined in the 2004 Edition
of the "Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves", and as a Qualified Person as defined in Canadian
National Instrument 43-101. Mr Princep is full-time employees of Paladin Energy
Ltd and consents to the inclusion of the information in this announcement in the
form and context in which it appears.
ACN 061 681 098
CMC Metals (TSXV:CMB)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
CMC Metals (TSXV:CMB)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024
