1.75

Why the hell this is going red who the fig knows anyhow, price target of $1.75

Quick comment – Queensland to recommence
uranium mining: The Queensland State Government
has announced it will convene a three-member
“implementation committee” to oversee the
recommencement of uranium mining in Queensland.
Paladin’s interests in Queensland: Paladin Energy’s
Queensland holdings include a 91% net interest in the
Valhalla/Skal/Odin deposits, which contain a 94Mlb
measured and indicated resource. PDN’s interest
includes 50% it owns outright, plus ~41% interest held
via its stake in Summit Resources.
Lifting of the mining ban could allow PDN to unlock
value: Now that Queensland uranium mines can be
developed, PDN has the ability to move these assets to
the next stage of development. Alternatively, PDN may
opt to monetise the resource through a sale of all or part
of the resource. Recently, PDN completed a long-term
offtake arrangement in which 60% of its Michelin deposit
is held as security. This occurred following the lifting of a
uranium activity moratorium in the province in which
Michelin is located. Similarly, the recommencement of
Queensland uranium mining could allow PDN to unlock
the value of its tenements within the state.
Potential transaction value: Applying a nominal
US$2/lb in-the-ground value to PDN’s exploration and
pre-development assets equates to US$94mn for its
50% outright owned interest in Valhalla/Skal/Odin. If we
consider the recent long-term offtake arrangement as an
asset deal for 60% of Michelin, PDN’s 50% interest in
Valhalla/Skal/Odin equates to ~US$180mn. These
scenarios show that an asset transaction involving
PDN’s Queensland asset could be material in size
and potentially contribute to further derisking of the
company’s balance sheet.