Paladin Share Price Up on Langer Heinrich Mine Update (ASX:PDN)

The Paladin Energy Ltd [ASX:PDN] share price is rising following fruitful developments in several of the uranium miner’s current projects.

Investors were treated to updates on the Langer Henrich Mine Restart Plan (the Restart Plan Update), as well as the Mineral Resources and Ore Reserves Estimates for the Langer Heinrich Mine (LHM).

The Paladin share price has shown a promising growth trajectory despite this year’s rocky markets, riding high on the coattails of rising uranium prices.

Check out its performance over the last 12 months below:

ASX PDN - Paladin Share Price ChartSource: Tradingview.com

At the time of writing, PDN stock is trading hands at 94 cents per share.

Let’s explore the Western Australian uranium producer’s announcement in more detail to understand why the market is responding so positively today.

What’s happening with the Langer Heinrich Mine?

In June last year, Paladin announced that its Langer Heinrich Mine (located in Namibia) was on its way to being restarted.

Since then, the company has been hard at work devising various strategic activities to get the mine up and running quickly and efficiently.

Judging by today’s movement in PDN’s share price, the news was highly anticipated.

Highlights of the Restart Plan Update include:

  • A restart cost estimate of US$81 million
  • A 17-year mine life supported by quality ore reserves
  • Estimated project execution time frame of 18 months (from commencement to first production — with full production achieved after further 15 months)
  • Fully completed technical programs
  • Intent to secure offtake contracts and global nuclear energy utilities
  • Markedly increased market enquiries — and increase in long-term market pricing

Paladin will now focus on managing the restart plan, at the same time hunting for further opportunities to support the continued profitability of the Langer Heinrich Mine over time.

Concept studies are underway for potential LHM value enhancement, including vanadium recovery and sales, the application of new ore sorting technologies, mine life cut off-grade resource processing, and a range of other initiatives.

Notably, development pathways have also been established across Paladin’s three large, high-grade exploration projects in Canada and Australia.

PDN reported unrestricted cash reserves of US$40.5 million as of 30 September 2021.

An optimistic outlook from management

Uranium players have been waiting for this moment for a long time.

Paladin CEO, Ian Purdy, commented:

The Restart Plan Update is the conclusion of an extensive work stream aimed at further de-risking the ramp up and operational readiness of the globally significant Langer Heinrich uranium mine. The workstreams reinforce our confidence in Langer Heinrich as a low risk, robust, long-life operation that is poised for a restart to take advantage of the improving uranium market conditions.

Comments were also made on the future of the energy market and Paladin’s advantageous position in that future:

As the world continues to move towards a decarbonised economy, Paladin is in a unique and enviable position of having a robust capital structure with no corporate debt and a project with a low-risk pathway to production with strong economics and importantly a well-known product from our 10 years of prior operation. We will continue to position Paladin to be ready to restart operations under the right uranium price environment. The improving structural outlook for uranium markets and Paladin’s opportunity to positively contribute to the decarbonisation of global electricity generation provides the platform for an exciting period ahead for Paladin and I look forward to updating you on our progress.’

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What’s next for the Paladin share price?

Uranium players have been waiting for this moment for a long time.

The expected surge in demand for uranium will reward producers who are ready to go right away.

The fact that Paladin has commented on its ‘financial flexibility to respond rapidly to improving uranium market conditions’, suggests it’s a prime contender.

Investors should be conscious about taking their positions carefully.

Paladin could certainly be a strong energy stock to own right now, but it’s only one in a sea of exciting energy opportunities.

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Regards,

Kiryll Prakapenka,
For Money Morning

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Kiryll Prakapenka is an investing autodidact who is passionate about conducting in-depth research on investments. Kiryll brings sound analytical skills to his work, courtesy of his Philosophy degree from The University of Melbourne. A student of legendary investors and their strategies, Kiryll likes to synthesise macroeconomic narratives with a keen understanding of the fundamentals behind companies.


Money Morning Australia