Paladin Energy Ltd · ASX:PDN
Paladin Energy — Paladin Resources — BMO Capital Markets 2007 Global Resources Conference
34 slides from Paladin Energy's conference presentation, Feb 28, 2007
Slide 1: ASX cover letter: Paladin Presentation
GRAND CENTRAL 1ST FLOOR, 26 RAILWAY ROAD PALADIN RESOURCES LTD SUBIACO WESTERN AUSTRALIA 6008 A.C.N. 061 681 098 PO BOX 201, SUBIACO WESTERN AUSTRALIA 6904 TELEPHONE: (+61 8) 9381 4366 FAX: (+61 8) 9381 4978 EMAIL: paladin@paladinresources.com.au Web: www.paladinresources.com.au Ref: 54472 28 Februa
Slide 2: The New Energy In The Market
PALADIN RESOURCES LTD The New Energy In The Market John Borshoff – Managing Director BMO Conference – Tampa Florida 26 to 28 February 2007 1 (v1) (v1)
Slide 3: Disclaimer
Disclaimer This presentation includes certain statements that may be deemed “forward-looking statements”. All statements in this presentation, other than statements of historical facts, that address future production, reserve or resource potential, exploration drilling, exploitation activities and e
Slide 4: Presentation Outline
Presentation Outline • Paladin Status & Strategy • Key Project Situation • Future Outlook 3
Slide 5: Project Pipeline Progress & Development
Project Pipeline Progress & Development Initial asset base (from 2002) DATABASE UTILISATION OOBAGOOMA MANYINGEE Inventory U3O8: 110 Mlb Plus upside 4
Slide 6: Project Pipeline 2006
Project Pipeline 2006 Assets acquired & projects developed Langer Heinrich Uranium Mining ? Operation 2012 2009/10 (Ramping up) Sept 2008 Inventory U3O8 220 Mlb Plus upside 5
Slide 7: Paladin Today
Paladin Today • An S&P/ASX 100 company - market cap US$4.12bn (A$5.25bn) • Ramp up stage underway at Langer Heinrich Uranium Mine (Namibia) – market leader sales contracts in place • Construction of Kayelekera Uranium Project (Malawi) – April 2007 start • M&A activity ongoing – Summit takeover bid l
Slide 8: Paladin Project Locations
Paladin Project Locations Langer Heinrich Kayelekera Swakopmund is Windhoek Walvis Bay ¥ i i i h keetmanshoop _ = areal i o 300 —aa aometres Australia yee Ka id ta Ml Oobagooma NT < oy ¢ bao | Bigriy| A ‘ 4 . Manyingee 7) Valhalia / Skal i . i d 4 AUSTRALIA “Mm ye \, a foun 4 | | i“ » } ann Perth “i
Slide 9: Advanced Paladin Projects
Advanced Paladin Projects Each one a company maker LANGER HEINRICH KAYELEKERA VALHALLA/SKAL MANYINGEE OOBAGOOMA * PROJECT PROJECT PROJECT PROJECT PROJECT Location / Equity Namibia Malawi Queensland, Australia West Australia West Australia 100% 85% 50% 100% 100% ex GENCOR ex CEGB ex QML ex TOTAL Ex C
Slide 10: Langer Heinrich Uranium Project
LANGER HEINRICH URANIUM PROJECT 9
Slide 11: Langer Heinrich Project: Location map
Langer Heinrich Project Location map 85km water pipeline (1.5m3pa) Waterline 70km Power Line Powerline Walvis Bay 10
Slide 12: Langer Heinrich: Project status
Langer Heinrich Project status • Total project US$125M (US$92M CAPEX & US$21M working cap) • Resources increased from 95Mlb to 105Mlb U3O8 • Key uranium sales contracts in place (7Mlb over 6yrs) – price sharing above ceiling price – significant leverage to uranium price • Production team 97% Namibia
Slide 13: Langer Heinrich Project: Resources and reserves
Langer Heinrich Project Resources and reserves MINERAL RESOURCES 250ppm Cut-off Mt Grade % U3O8 Tonnes U3O8 Measured & Indicated 37.1 0.06 22,500 (49.7Mlb) Resources Inferred Resources 43.0 0.06 23,800 (55.8Mlb) MINING RESERVES @ US$30/lb U3O8 250ppm Cut-off Mt Grade % U3O8 Tonnes U3O8 Proven Ore Re
Slide 14: Langer Heinrich Uranium Plant
Langer Heinrich Uranium Plant Precipitation and Reagent Areas CCD Circuit Leach Circuit 13
Slide 15: Langer Heinrich Drum Packaging Area
Langer Heinrich Drum Packaging Area 14
Slide 16: Langer Heinrich Project: Key Performance Parameters
Langer Heinrich Project Key Performance Parameters STAGE 1 STAGE 2 Production U3O8 2.6Mlb 3.7Mlb Sales Price /lb US$60 US$60 Annual revenue US$156M US$222M Royalty 3% US$ 4.68M US$ 6.6M Operating costs (US$17/lb) US$ 44M US$ 62.9M Operating surplus (pre-tax) US$ 107.3M (A$136M) US$152.5M (A$193.5M)
Slide 17: Kayelekera Uranium Project
KAYELEKERA URANIUM PROJECT 16
Slide 18: Kayelekera Project
Kayelekera Project Historical • One of the best undeveloped uranium projects in Africa • Final feasibility by giant UK power utility in 1990 – complete feasibility study and supporting project on hand Current • Development Agreement approved • BFS/EIA submitted to Govt late Feb 07 for mining approva
Slide 19: Land Holdings: Resource status
Land Holdings Resource status Measured and Indicated 15.31Mt @ 0.09% - 13,630t U3O8 (31.1Mlb) New Tenements Inferred Kayelekera 3.40Mt @ 0.06% - 2,040t U3O8 Deposit (4.5Mlb) Exploration Targets Resources JORC / NI 43-101 compliant NEW TENEMENTS • Three new blocks granted – 1,140 km2 • Highly prospec
Slide 20: Development Agreement
Development Agreement Fiscal and operational stability breakthrough • 10 year fiscal and operational stability period • Govt 15% carried equity in project company (against tax off set) • 27.5% corporate tax / 10% resource rent tax reduced to zero • Royalty rate 1.5% (yrs 1-3) and 3% (yrs 4+) down fr
Slide 21: Board Approves Project Go-Ahead
Board Approves Project Go - Ahead Awaiting Government Mining Licence approval PROJECT PARAMETERS FROM POSITIVE BFS • 11 year project life • Annual production 3.3Mlb U3O8 (yrs 1 to 7) & 1.17Mlb thereafter • CAPEX US$185M with room for optimisation – 1.5Mtpa at 0.11% U3O8 with 90% recovery – acid leac
Slide 22: Kayelekera Project: Construction expected schedule
Kayelekera Project Construction – expected schedule • Experienced owners construction team in place – Langer Heinrich group • November 2006 to February 2007 – major long lead item acquired (Dominion SAG Mill) – pioneer works planned and scheduled • March 2007 to June 2007 – grant of Mining Licence –
Slide 23: M&A Activity: Summit Resources Ltd
M & A ACTIVITY SUMMIT RESOURCES LTD 22
Slide 24: Summit Overview
Summit Overview Interests in 12 uranium exploration projects in NW Queensland • Mt Isa Uranium (QLD) - 100% − Anderson − Bikini − Mirroola − Tjilpa − Watta − Warwai − 15 prospects • Mt Isa Uranium JV (QLD) - 50% − Valhalla − Skal • Isa South, Georgina Basin, Isa North, May Downs (QLD) - 100% Valhall
Slide 25: Summit Stated Resources
Summit Stated Resources VALHALLA DEPOSIT M INERAL RESOURCES (0.027% U3O 8 cut off) Grade % Summit Paladin share 250ppm Cut-off Mt U3O 8 T onnes U3O 8 share (existing) Measured & Indicated Resources 21.3 0.08 16,900t or 37.4Mlb 50% 50% Inferred Resources 12 0.075 9,000t or 19.6Mlb 50% 50% JORC / NI 4
Slide 26: Paladin Offer Summary
Paladin Offer Summary • 100% scrip offer for Ordinary Shares • 1 Paladin share for each 2.04 Summit shares • Represents attractive 34% premium to Summit 10 day VWAP (based on Paladin 5 day VWAP) • No minimum acceptance condition • Foreign Investment Review Board approval received already • Condition
Slide 27: Value to Summit Shareholders
Value to Summit Shareholders • Significant premium • Shares in uranium producer • Maintain upside to Australian uranium policy change • Paladin’s financial strength • Paladin’s management expertise • Paladin’s U3O8 marketing skills and presence • Vastly improved liquidity − PDN - A$43.9m daily avera
Slide 28: Value to Paladin Shareholders
Value to Paladin Shareholders • Achieve control of important emerging uranium province and 2012+ Project • Mt Isa JV will benefit from experienced Paladin management • Weighted average cost of Mt Isa Uranium assets (across Valhalla and Summit) US$15.90* compares favourably with current market benchm
Slide 29: Future Outlook & Expectation
FUTURE OUTLOOK & EXPECTATION 28
Slide 30: Production Schedule
Production Schedule Plenty of upside Project Production Start Production Vol. (U3O8) million pounds LANGER HEINRICH September 2006 2.60 (Stage 1) KAYELEKERA August 2008 3.30 LANGER HEINRICH September 2008 1.10 (Stage 2) 7.00Mlb Potential to expand these projects to a total production of 7.5Mlb to 8M
Slide 31: Project Development
Project Development Establishing appropriate team capabilities BFS CONSTRUCTION - US$92M PRODUCTION – 2.6Mlb pa (1,180 TPA) - 15 YEAR PLUS PRODUCTION PRE-FEASIBILITY BFS BFS ~ US$2.3M CONSTRUCTION 1,000 TPA (2.3Mlb) for UPDATE 10 YEARS New Project Development* PRE-FEASIBILITY BFS CONSTRUCTION *Yet t
Slide 32: Uranium Trading Entity
Uranium Trading Entity • Paladin establishing uranium trading entity designed to take advantage of fundamental uranium market changes • Initial charter to acquire and manage natural uranium inventory • Change agent for term uranium market • Develop creative commercial strategies with reasonable risk
Slide 33: Conclusion
Conclusion DEVELOP PALADIN INTO A MAJOR GLOBAL URANIUM SUPPLIER • Focused uranium energy company (have an ei n rich Oob agoo e r H ma excellent starting basis) L an g Valhalla – large resource base in 5 deposits - 220Mlb Database – strong resource upside potential Manyingee Bigrlyi Kayelekera – stre
Slide 34: Contact Details
PALADIN RESOURCES LTD Contact Details Mr John Borshoff Grand Central 1st Floor, 26 Railway Rd (Managing Director) Subiaco Western Australia 6008 Mobile: +61 (0) 419 912 571 PO Box 201, Subiaco Email: john.borshoff@paladinresources.com.au Western Australia 6904 Telephone: +61 (0) 8 9381 4366 Facsimil
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