Paladin posts $US120m net loss despite record production From:...

Paladin posts $US120m net loss despite record production

From: AAP
February 14, 20121:21PM


AFRICA-focused uranium producer Paladin Energy has widened its first-half net loss from the previous corresponding period, despite record production.

The Perth-based company, which is dual listed on the Australian and Toronto stock exchanges, today reported a net loss for the six months to December 31 of $US120.2 million ($A112.36 million). This compares with a net loss of $US21.1 million ($A19.72 million) for the previous corresponding period.

Goldman Sachs said it had expected a net loss of $US119.65 million ($A111.84 million) for Paladin.

Production totalled 3.069 million pounds of uranium oxide, up 8.5 per cent on the first half of 2010/11.

While Paladin's Kayelekera mine in Malawi and Langer Heinrich mine in Namibia were affected by planned shutdowns, and Kayelekera required unscheduled remediation work, record production was achieved.

Production at Kayelekera rose to more than 90 per cent of design capacity in the December quarter, representing a 60 per cent increase over the September quarter.

Output at Langer Heinrich, Paladin's first mine, increased to 92 per cent of Stage Three design capacity during the December quarter, up 40 per cent from the prior period.

``The long-sought after production uplift towards nameplate design on both operations is finally being achieved,'' the miner said.

Paladin said its net loss was mainly a result of a $US133 million ($A124.32 million) impairment cost associated with the writedown of the Kayelekera mine in the September quarter, which was needed after uranium prices fell post-Fukushima.

Paladin said the uranium spot price was slightly volatile in the December quarter.

However, the company achieved an average sales price of $US53.06/lb, which was a modest improvement on the average spot price for the quarter of $US52.50/lb.

In the previous December quarter, the average spot price was $US56.71/lb while Paladin achieved an average sales price of $US52.00/lb.

``The spot price is beginning to show signs of strengthening as new demand emerges,'' the company said today.

``As the market effects of the Fukushima incident continue to work their way through the overall nuclear/uranium market, price improvement is anticipated throughout the year, although periods of volatility can be expected.''

Paladin shares were down 5.5 cents, or 3.06 per cent, at $1.745 at 1536 AEDT.