Paladin Energy Expects to Acquire Uranium Mine (Correct)
bloomberg.com
By Angela Macdonald-Smith
(Corrects to remove reference to production in first paragraph of story originally published April 30.)
April 30 (Bloomberg) -- Paladin Energy Ltd., the Australian uranium company seeking to expand output beyond Africa, expects to make acquisitions before its first venture begins in Queensland.
Options include a corporate takeover that may involve Paladin shares, Managing Director John Borshoff said in an interview. That would take advantage of an almost-tripling in the stock price since an October low and of the potential for further gains, he said.
“Our scrip is much more valuable and acceptable than just straight cash, so we can compete against companies that can only offer cash,” Borshoff said yesterday in Perth. “We’ve got significant opportunities and probably in the next nine months, some of those will be announced.”
Paladin trimmed its output forecast this month for the year ending June 30 by as much as 10 percent, citing “minor” delays to the start of the $200 million Kayelekera project in Malawi and to an expansion in Namibia. Output is still set to more than double to 7 million pounds of uranium oxide in 2010 from 2.4 million last year, making the company the world’s eighth-biggest producer of the metal used in nuclear reactor fuel.
Paladin is targeting potential acquisitions outside Australia and Africa, Borshoff said.
Paladin jumped 7.4 percent to A$4.67 on the Australian stock exchange yesterday and has more than doubled in the past six months, even as spot prices for uranium slid almost 8 percent.
‘Growth Upside’
The gain may be because of rising output at the Langer Heinrich mine in Namibia and the Malawi start-up, and the stock may also be factoring in “excessive growth upside” from projects in Queensland state, Bank of America Corp.’s Merrill Lynch & Co. unit said April 24.
A further expansion of Langer Heinrich, which started shipments in 2007, may start in the second half at a cost of less than $160 million, Borshoff said.
Paladin’s first Australian venture, at Mt. Isa, may start construction in 2012 and begin production in 2013, he said, assuming Queensland scraps a ban on mining the metal. The Angela project being developed with Cameco Corp. may follow in 2014.
Uranium spot prices have slumped more than 68 percent since a record $138 a pound in June 2007 as investors sold inventories and economic growth slowed. Uranium oxide concentrate for immediate delivery rose $2.50 to $44 a pound last week, Denver- based pricing service TradeTech LLC said in an April 24 report.
To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net.
Last Updated: May 1, 2009 03:52 EDT |
