Paladin CEO says shareholders under-estimate Fission deal
PALADIN Energy struck a bullish note for the firm’s prospects on Wednesday saying its shareholders had not yet absorbed the benefits of a recent acquisition.
“Not all shareholders full appreciated what we have bought,” said Paladin’s CEO Ian Purdy in reference to the uranium miner’s C$1.1bn all-share takeover of Fission Uranium Corp. The transaction, first announced in June, was approved by the Canadian authorities in December.
“It was hotly contested, sought-after, and now it is ours. People will say ‘wow’ when we develop it,” he added of Fission Uranium’s Patterson Lake South (PLS) project. He described it as “a huge catalyst” for Paladin and anticipated “fantastic newsflow” in the coming years as it progressed.
Shares in Paladin Energy gained 10% today on the Australian Securities Exchange taking the share nearly 16.5% higher year-to-date. On a 12 month basis, however, Paladin is 23% lower. It shares were also admitted to the Toronto Stock Exchange on December 27.
Purdy was commenting in a December quarter production update in which Paladin returned its Langer Heinrich uranium mine in Namibia to service, generating positive cash, following a 12-day maintenance programme.
The company said today that revised guidance of three to 3.6 million pounds of uranium for the financial year would be met. Previous guidance of four million to 4.5 million lbs was cut in November owing to grade variability of stockpiled ore and water shortages at the site.
Paladin’s COO Paul Hemburrow said in a conference call to analysts that there was good water availability from Namwater. But he stopped short of promising earlier access to open pit mining at Langer Heinrich than the current target of July. At present, mining is from six million tons of medium-grade, low-cost stockpiles.
“We are planning to bring the mining forward and we are looking at options,” said Hemburrow. Pressed for details, he replied: “The uranium price doesn’t affect our approach to stockpiles versus the open pit.”
Post the conclusion of the deal with Fission Uranium, its CEO Ross McElroy resigned. A new president of Paladin Canada to fulfil strategic functions related to the Canadian government, First Peoples and the PLS project’s social impact was being sought.
“I would have been happy for him to stay,” said Purdy. “We are on very good terms but it is also understandable. The functional leaders of Fission Uranium are committed to Paladin, and to the project. They are right in there moving forward,” he said.
Of the Fission Uranium acquisition, Purdy said further: “It is a game changer for us. We have got global scale, a world class asset in Namibia and probably the two top uranium projects in the world and exploration upside.
“But we are a company that likes to do it first rather than promise the world.”