afr article today., page-4

The article missed the debt restructure - that was the first bit of positive news that started to help PDN. It has all been good news since, but not reflected in the share price in any way.

What I aslo find interesting is the ERA vs PDN comparison. Despite ERA possibly never mining again and being in all sorts of strife, its share price has skyrocketed above $1.40, while PDN still cannot crack $1. Does not make no sense and does not make any sense at the same time. Shows how silly and irrational the market can be.


The first was a preliminary deal to sell 25 per cent of the company’s flagship Langer Heinrich mine in Namibia. While final approvals for the deal are yet to be received, the likely cash injection of $US190 million ($213 million) looms as a crucial boost for a loss-making company that has $US300 million worth of debt maturing in 16 months.

Paladin’s second step forward was the mothballing of the high-cost Kayelekera mine in Malawi, which, despite boosting uranium production levels, had burned huge amounts of cash over its 6?½ years in operation.

The third morale boost came last week, and was the most eagerly awaited of all. The Japanese government declared that nuclear power – for which uranium is the fuel – would an important “base load energy source” for the nation in the future. With close to 50 nuclear power stations idled since the Fukushima nuclear disaster in 2011, a restart of Japan’s nuclear power industry could significantly lift uranium demand and prices, and the statement of intent was received enthusiastically by the industry. Paladin shares soared by almost 20 per cent on the day.


But even if the Japanese take a middle-of-the-road position on uranium – which would see some, but not all of its reactors restart – the question remains whether this moment is the long-awaited turning point for the struggling uranium industry.

If it is, investors could be rewarded for owning Paladin shares. The miner is probably the best-placed Australian stock for an improvement in uranium prices, with the possible exception of Rio Tinto, which responds more to fluctuations in the iron ore price than any other commodity.

Unlike the swarm of ASX-listed explorers, Paladin has already built two mines, one of which is rated highly by the industry. But while Paladin has the ASX’s best and purest exposure to uranium, bringing the company back into profitability won’t be easy.

While Energy Resources of Australia (ERA) has traditionally been Australia’s prime uranium pure-play, the company may never mine another ounce, with its future dependent on an incomplete exploration campaign at its Ranger precinct in the Northern Territory.

Last year’s leak of radioactive material won’t help ERA win approval from government regulators or Rio Tinto’s razor gang, should the company try to fund a new development in the future.