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Paladin swings to loss as sliding uranium price takes a toll

15th November 2013

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – While uranium producer Paladin Energy has managed to increase its sales volumes by 37% quarter-on-quarter in the three months ended September, lower uranium prices and an impairment charge have affected the company’s profitability.

Last month, the company announced cost-cutting measures, including redundancies and executive pay cuts, to compensate for the declining spot price of uranium.

Sales volumes for the quarter rose to 1.67-million pounds of uranium oxide (U3O8), while sales revenue increased by 13% on the previous corresponding period, to $61-million.

However, Paladin reported a gross loss of $14.9-million for the quarter, compared with a gross profit of $1.7-million in the previous corresponding period, owing to a 17% decline in uranium prices, and a higher impairment of the inventory of  the Kayelekera mine, in Malawi.

The ASX- and TSX-listed uranium miner’s U3O8 production rose by 6% to 2.04-million pounds in the quarter.

The Langer Heinrich mine, in Namibia, produced a record 1.4-million pounds of U3O8 during the September quarter, which was 4% above the production guidance, and up 11% on the same quarter in 2012.

Kayelekera produced 614 603 lb of U3O8 during the quarter under review, which was 9% below the budgeted production owing to the extension of the planned shutdown.

Paladin expected uranium sales volumes to fluctuate quarter-on-quarter, owing to the uneven timing of contractual commitments and the resultant rescheduling. However, the company noted that now that production had reached design levels, sales and production volumes were expected to be comparable on an annualised basis.

For the full 2014 financial year, Paladin expects to produce between 8.3-million pounds and 8.7-million pounds of U3O8.

Edited by Mariaan Webb
Creamer Media Contract Publishing Editor

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