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Paladin Energy Ltd
The New Energy In The MarketJohn Borshoff – Managing Director/CEO
Mark Bolton – Acting CFO
1
December Quarter 2008 Results & Investor Update
17 February 2009
Disclaimer
This presentation includes certain statements that may be deemed “forward-lookingstatements”. All statements in this presentation, other than statements of historical facts, thataddress future production, reserve or resource potential, exploration drilling, exploitationactivities and events or developments that Paladin Energy Ltd (the “Company”) expects tooccur, are forward-looking statements.
Although the Company believes the expectations expressed in such forward-lookingAlthough the Company believes the expectations expressed in such forward-lookingstatements are based on reasonable assumptions, such statements are not guarantees offuture performance and actual results or developments may differ materially from those in theforward-looking statements. Factors that could cause actual results to differ materially fromthose in forward looking statements include market prices, exploitation and explorationsuccesses, and continued availability of capital and financing and general economic, marketor business conditions.
Investors are cautioned that any such statements are not guarantees of future performanceand actual results or developments may differ materially from those projected in the forward-looking statements. The Company does not assume any obligation to update or revise itsforward-looking statements, whether as a result of new information, future events orotherwise.
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Presentation Outline
• Paladin Status
• Financial Dec Qtr Review
• Projects Update• Projects Update
• Future Outlook
Paladin 2008 Quarterlykey takeaways
• Paladin reaches significant growth operational milestones– Langer Heinrich sustaining above nameplate and commissioning
– Kayelekera in commissioning phase
• Committed to growth and expanding production base– Stage III Langer Heinrich
– Mount Isa
– M&A (eg FUSION takeover)– M&A (eg FUSION takeover)
• Demonstrating clear action to support its strategic vision– foresaw transformational changes in nuclear industry
• Sufficient funding available to support envisaged growth
• Stable, effective Board and growing management
Paladin’s Suite of Uranium Properties staged for sequential development
Construction of Mine
Reserves of 25Mlb
Resources of 35Mlb
Advanced Exploration Project
Resources of 23Mlb
Pre Development Project
Resource - 85Mlb
pro uranium
Re-activate Evaluation
Manyingee Resource of 24Mlb
Operating Mine plus expansion
Reserves of 65.8Mlb
Resources of 164MlbPaladin 42.06% Paladin 50% (plus 81.99% control of Summit –
in its 100% owned properties)
New Project
Angela/Pamela Deposits
Historical ~28Mlb
Paladin 50% JV Cameco
Paladin 100% Paladin 85%
Attributable Pounds
pro uranium
pro uranium
5Fusion 100% & Deep Yellow 19.29%
Presentation Outline
• Paladin Status
• Financial Dec Qtr Review
• Projects Update• Projects Update
• Future Outlook
Key HighlightsDec 08 Qtr
• Langer Heinrich – record underlying performance
– US$14.2M revenue, US$6.4M gross profit
– 673,982lb produced, up from 650,554lb for the previous quarter
– Represents annualised production of 2.7Mlb
– Operating costs per pound continue to decline
– Stage II expansion to 3.7Mlb/pa currently commissioning
• Kayelekera• Kayelekera
– Construction near complete with commissioning started
– Production ramp-up from beginning of Mar Qtr 2009
– Long term sales contract with major Asian utility in Sept 08 Qtr
– Second sales contract currently subject to documentation
• Strong balance sheet
– US$192.2M of cash and equivalents
7
Financial Performance Dec 08 Qtr
December 08 Quarter
September 08 Quarter
June 08 Quarter
2008Full Year
Production (lb)673,982 650,554 568,670 1,710,032
Annualised
(lb pa) 2.7M 2.6M 2.3M 1.7M
Sales (lb)245,000 878,000 601,614 1,411,000
Sales (lb)245,000 878,000 601,614 1,411,000
Average Sales Price(US$/lb U3O8) 54 58 60 66
Sales Revenue (US$M) 14.2 51.0 36.3 93.8
Gross Profit (US$M) 6.4 22.0 21.2 35.5
8
Income StatementDec 08 Qtr
• Gross profit of US$6.4M, with LHUP contributing US$5.3M.
• Exploration expenditure of US$3.6M with US$2.2M of this spenton the Mount Isa Project. Impact of large exchange ratemovements limited.
• Impairment of Mount Isa exploration assets (US$527.6M net of• Impairment of Mount Isa exploration assets (US$527.6M net ofDTL) and investment in Deep Yellow Ltd (US$26.0M).
• Loss after tax for Dec qtr US$566.3M with US$470.8M attributedto members of parent entity (i.e. after minority interests inSummit).
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Income Statement (Continued)Dec 08 Qtr
• Impairment of Mount Isa assets
– Board elected to impair for transparency of Balance Sheet andprudence given the impact of the global financial crisis
– carrying value now not significantly different from Summit ResourcesLimited market cap
– no impairment of operating assets
– Paladin not wavering whatsoever in its belief in a highly positive– Paladin not wavering whatsoever in its belief in a highly positiveuranium outlook and remains resolutely committed to the developmentof the Mount Isa assets
– assuming a positive feasibility study, Paladin would develop the assetsas soon as the Queensland State Government Policy allows
• Impairment of investment in Deep Yellow Ltd
– required under the accounting standards
– written down to DYL market price as at 31 December 2008
– Board remains confident in DYL’s resource potential and outlook
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Income Statement (Continued)Dec 08 Qtr
• Other expenses of US$7.8M
Major components comprised:
– share based payments expense, US$2.3M (non-cash)
– employee benefits expense (salaries etc.), US$1.4M after allocation to exploration
– corporate and marketing costs US$2.7M– corporate and marketing costs US$2.7M
– no further impairment of uranium inventory in December quarter
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Balance Sheet and Cash FlowDec 08 Qtr
• Cash and cash equivalents of US$192.2M at end of Dec qtr -held in Australian banks with minimum AA rating
• The significant cash outflows during the quarter were:
– US$59.8M for Kayelekera mine construction
– US$10.8M for LHUP Stage II
– US$3.1M exploration (mainly QLD)– US$3.1M exploration (mainly QLD)
• Net assets decreased during quarter by US$938.2M primarily as a result of:
– US$780M impairment of Mount Isa assets and Deep Yellow investment
– US$505.8M FX impact on Australian denominated exploration assets from the devaluation of the Australian dollar
– US$259.9M decrease in Deferred Tax Liability and US$106.9M increase in Future Tax Benefit as a result of impairment and FX impact on Australian denominated exploration assets
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Presentation Outline
• Paladin Status
• Financial Dec Qtr Review
• Projects Update• Projects Update
• Future Outlook
Questions?
Langer Heinrich Mountain
• STAGE I - at above design production
• STAGE II - expansion being commissioned
• STAGE III - expansion in design phase
• Large Resource Upgrade
Plant
Open Pits
Tailings
Langer Heinrich Projectlarge resource/reserve upgrade
MINERAL RESOURCES
250ppm Cut-off Mt Grade % U3O8 t U3O8 Mlb U3O8
Measured Resources 32.8 0.06 19,582 43.171
Indicated Resources 23.6 0.06 13,276 29.269
Measured + Indicated 56.4 0.06 32,858 72.440
Inferred Resources 70.7 0.06 41,557 91.617
Conforms to both JORC and NI 43-101 guidelines
46% increase
64% increase
Conforms to both JORC and NI 43-101 guidelines
MINING RESERVES @ US$60/lb U3O8
250ppm Cut-off Mt Grade % U3O8 Tonnes U3O8
Proven Ore Reserves 30.0 0.06 17,924 (39.50Mlb)
Probable Ore Reserves 20.6 0.06 11,950 (26.34Mlb)
Total 50.6 0.06 29,874 (65.84Mlb) 75% increase
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Conforms to both JORC and NI 43-101 guidelines
* Mine plan for Stage I 900ppm ore feed, 12 years
*
Production – 6 months at design
Production last 6 months (tonnes U3O8)
smoothed averages
80.0
100.0
120.0
-
20.0
40.0
60.0
80.0
July Aug Sept Oct Nov Dec
Acc't prod
drummed
Nameplate
Langer Heinrich Production quarter by quarter
390,807
490,800
568,670
300,000
400,000
500,000
600,000
lb
U3O8
650,000
75
%
88%100%
650,054
673,982Stage I Design
104%
259,755
0
100,000
200,000
Q1
Sept 07
Q2
Dec 07
Q3
Mar 08
Q4
Jun 08
Q1
Sept 08
Q2
Dec 08
40%
60% %
Operating Costs
Adminstration costs4%
Production costs8%
Mining costs18%
LHU Costs for the three months ended 30 September 2008
Adminstration costs4%
Production costs9%
Mining costs22%
LHU Costs for the three months ended 31 December 2008
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Staff costs14%
Reagents30%
Maintenance7%
Depreciation9%
Electricity and diesel10%
Staff costs12%
Reagents29%Maintenance
7%
Depreciation8%
Electricity and diesel
9%
Langer HeinrichStage II expansion
IX Columns
Pre leach
Front–end Upgrade
Larger Leach TanksCCD Thickeners
Kayelekera Uranium Projectcurrent status
• US$200M CAPEX – (final within 5%)
– Construction 90% complete
– Commissioning started January 2009
– 3.3Mlb U3O8 pa using acid leach/Resin in Pulp
– Production ramp-up in March 2009
– 1600 people on site
– high safety achievement 2.9Mhrs injury free
Karonga
Exploration Targets
Hot Targets
– high safety achievement 2.9Mhrs injury free
• Tailings Dam and other water structure construction completed
• Open-pit down to ore zone, stockpiling commenced
• Developing strong uranium experiencedoperational team.
• Excellent satellite targets for resource expansion
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Kayelekera Uranium Projectlarge resource/reserve upgrade
MINERAL RESOURCES
300ppm Cut-off Mt Grade ppm U3O8
Tonnes U3O8
MlbU3O8
Measured Resources 3.42 1,211 4,141 9.1
Indicated Resources 18.78 725 13,626 30.0
Total 22.20 800 17,757 39.1
Inferred Resources 3.9 552 2,152 4.7 29% increase
Conforms to both JORC and NI 43-101 guidelines
MINING RESERVES
400ppm Cut-off Mt Grade ppmU3O8
Tonnes U3O8
MlbU3O8
Proven Ore Reserve 2.87 1,373 3,943 8.7
Probable Ore Reserve 9.75 959 9,342 20.6
Total 12.62 1,053 13,285 29.3
27% Increase in total Resources
17% increase
Conforms to both JORC and NI 43-101 guidelines
• Uranium resource attributable to Paladin increased by 198% to 85.2Mlb
– Skal resource update due March 09
• Focused metallurgical scoping test work underway
• Environmental baseline work ongoing
Mount Isa Uranium Projectcurrent status
• Fusion takeover adds resources and potential for more
• Preparing for Bankable Feasibility Study to start end 2009/early 2010
• Ongoing lobbying of QLD Government re uranium policy
• 08/09 budget US$8M
VALHALLA
SKAL
Stated Resources – Summit and Valhalla
Deposit * Measured and IndicatedResources
InferredResources
PaladinShare
Cut-off ppmU3O8
MtGrade ppm
t U3O8 MtGrade ppm
t U3O8
Valhalla 230 27.80 891 24,765 7.3 799 5,863 90.9%
Skal 250 7.6 508 3,781 90.9%
Bikini 250 10.1 517 5,200 81.9%Bikini 250 10.1 517 5,200 81.9%
Andersons 230 2.0 1,050 2,100 81.9%
Watta 230 4.2 410 1,720 81.9%
Total 27.80 89124,765
(54.6Mlb)31.2 597
18,664 (41.1Mlb)
Total Resource Attributable to Paladin
25.27 89122,511
(49.6Mlb)26.9 601
16,154(35.6Mlb)
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Conforms to both JORC and NI 43-101 guidelines
* Excluding Fusion 7.06Mlb at .07% U3O8 published inferred resource
Presentation Outline
• Paladin Status
• Financial Dec Qtr Review
• Projects Update• Projects Update
• Future Outlook
4 Year Production Outlook
6.6
8.4
9.3
5
6
7
8
9
10
Mlb
Actual Forecast
1.71
3.35
0
1
2
3
4
5
2007/08 2008/09 2009/10 2010/11 2011/12
Mlb
U3O8
Langer Heinrich Production Kayelekera Production
Project Developmentestablished team and sequential development capability
BFS CONSTRUCTION - US$92M PRODUCTION 2.6Mlb pa 3.7Mlb pa
Stage II US$50M Stage III
BFS ~ US$2.3MPRE-FEASIBILITY
UPDATECONSTRUCTION
US$200M PRODUCTION3.3Mlb pa
BFSM&A ACTIVITIES CONST.
Through Project Generation Activities
Project Pipelineassets acquired & projects developed
Langer HeinrichUranium Mining
In Commissioning
2012
Inventory U3O8
351Mlb
New production with staged organic growth 2008 to 2011
Uranium MiningOperation
Paladin Offers Excellent Upside key outcomes for 2008/09
• Langer Heinrich (Namibia)– achieve 1.5Mlb to 1.6Mlb for H2 2008 (CY)
– fully integrate Stage II expansion (2.6Mlb to 3.7Mlb pa)
– Stage III expansion planned and designed
– produce 2.95Mlb U3O8 for 12 month period end June 09
• Kayelekera (Malawi) – fully commission operation and start production ramp-up in March
– produce 0.4Mlb U3O8 by June 093 8
– drilling on hot targets
• Mount Isa Project (Queensland - Australia)– update resource estimate for Skal March 09 and continue drilling
– complete prefeasibility study April 09
– initiate work on Fusion targets
• Angela/Pamela Uranium Deposit (Northern Territory – Australia)– commence field work June quarter 09
• Manyingee (Western Australia)– start up preparation for resource confirmation drilling
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Conclusion
• Achieved multi-mine/multi-country operating status
• Maintaining strong production profile
• Further expansion possibility at Langer Heinrich (Stage III)
• Sustained development from project pipeline
– progress Mount Isa and Angela Projects for development start – progress Mount Isa and Angela Projects for development start 2012+
• Focussed M&A activity
– opportunity to establish a global uranium mining house
• Uranium market outlook very positive
• Strong balance sheet
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PALADIN ENERGY LTDContact Details
Mr John Borshoff(Managing Director/CEO) Mobile: +61 (0) 419 912 571Email: john.borshoff@paladinenergy.com.au
Mr Greg TaylorInvestor Relations (North America) Tel: +905 337-7673 or Mobile: +416-605-5120 (Toronto)Email: greg.taylor@paladinenergy.com.au
Head Office Grand Central 1st Floor, 26 Railway RdSubiaco Western Australia 6008PO Box 201, Subiaco Western Australia 6904Telephone: +61 (0) 8 9381 4366Facsimile: +61 (0) 8 9381 4978Email: paladin@paladinenergy.com.auWebsite: www.paladinenergy.com.au
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