Paladin Energy Ltd · ASX:PDN
Paladin Energy — Q3 FY2013 Earnings Presentation
26 slides from Paladin Energy's earnings presentation, May 15, 2013
Slide 1: March Quarter Results Conference Call and Investor Update
Langer Heinrich Mining Operation March Quarter Results Conference Call and Investor Update 15 May 2013 John Borshoff – Managing Director/CEO Alan Rule – CFO Mark Chalmers – EGM, Production
Slide 2: Disclaimer and Notes for JORC and NI 43-101 Mineral Resources and Ore Reserves
Disclaimer and Notes for JORC and NI 43- 101 Mineral Resources and Ore Reserves 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 re
Slide 3: Presentation Outline
Presentation Outline Company Status & Market Outlook – John Borshoff Financial Review – Alan Rule Operations Update – Mark Chalmers Conclusions – John Borshoff 2
Slide 4: Company Status and Highlights
Company Status and Highlights Safety Performance - continued high safety performance - Kayelekera achieved a milestone 365 days LTI free 28 March 2013 Operational Highlights - combined production for 9 months 6.112Mlb, up 26% - positive March quarter results Sustainable Cost Savings - average C1 cos
Slide 5: Company Status and Highlights (cont)
Company Status and Highlights (cont) Guidance - production guidance remains 8.0Mlb to 8.5Mlb U3O8 - clear opportunities for continued production improvement – beyond FY13 Strategic Initiatives - sales process on schedule and results expected June quarter 2013 4
Slide 6: World Nuclear Capacity – May 2013
World Nuclear Capacity – May 2013 “Fukushima is behind us” Current Under Planned Proposed Nuclear Construction Capacity 350 Reactors / 435 66 160 319 325 (Capacity) (374.5GWe) (68.3GWe) (176.6GWe) (361.1GWe) 300 Number of Reactors 275 Countries 30 13 28 37 250 China 17 28 49 120 225 (14.0GWe) (30.6G
Slide 7: Nuclear Outlook Positive
Nuclear Outlook Positive key drivers Japan – sorting out schedule for re-starts Liberal Democratic Party (LDP) elected Dec 2012 reversed 2040 phase out policy – LDP expected to win upper house July 2013. Unique opportunity to accelerate reactors starts Paladin’s detailed assessment of Japanese react
Slide 8: Supply/Demand Unbalanced
Supply/Demand Unbalanced supply shortfall will widen A supply shortage is unavoidable post 2013-14 Long lead times will severely limit achieving 2020 supply targets — average lead time to full production 6 to 9 years — insufficient projects able to bring sufficient new production online rapidly Pric
Slide 9: Supply Growth Uncertainty
Supply Growth Uncertainty The impossible challenge : Primary supply will have to increase by circa 90Mlb U3O8 pa to meet 2020 requirements (in 7 years) In previous 7-year period (2005 – 2012), production increased only by 48Mlb, and Kazakhstan accounted for ~40Mlb THERE IS NO OTHER “KAZATOMPROM” TO
Slide 10: Presentation Outline
Presentation Outline Company Status & Market Outlook - John Borshoff Financial Review – Alan Rule Operations Update – Mark Chalmers Conclusions – John Borshoff 9
Slide 11: Profit & Loss
Profit & Loss quarter ended 31 March 2013 Change 31 March 2013 31 March 2012 US$M US$M Revenue Sales Revenue 106.1 67.3 Other Revenue 0.3 0.5 Total Revenue 106.4 67.8 Cost of Sales (86.7) (52.6) Impairment of inventory (3.3) (11.9) Gross Profit 16.4 3.3 Other income 1.1 - Exploration and evaluation
Slide 12: Profit & Loss
Profit & Loss quarter ended 31 March 2013 Sales Revenue of US$106.1M — 1.920Mlb sold at average realised price of US$55.2/lb Gross margin from operations of US$16.4M — average cost of sales of US$45/lb before KM inventory impairment — KM inventory impairment of US$3.3M Administration, marketing and
Slide 13: Sustainable Cost Savings
Sustainable Cost Savings Cost reductions are now embedded into operations Focus remains on reducing costs across organisation Continuing to identify additional cost saving opportunities Langer Heinrich Kayelekera — remainder of FY13 target US$29/lb — remainder of FY13 target sub US$40/lb — FY14 to t
Slide 14: Balance Sheet & Cash Flow
Balance Sheet & Cash Flow quarter ended 31 March 2013 Cash and cash equivalents of US$112.9M Cash inflow from operating activities of US$167.6M — customer receipts of US$109.0M — proceeds from EdF off-take agreement US$150M Cash outflow from investing activities of US$9.3M — US$4.1M exploration expe
Slide 15: Presentation Outline
Presentation Outline Company Status & Market Outlook - John Borshoff Financial Review – Alan Rule Operations Update – Mark Chalmers Conclusions – John Borshoff 14
Slide 16: Quarterly Highlights
Quarterly Highlights Safety Maintained low Lost Time Injury Frequency Rate of 1.2 Combined production 1.992Mlb Production 95% nameplate production for the quarter 96% nameplate production for first 9 months FY2013 Production of 1.23Mlb (96% of nameplate) LHM Water constraints and operational issues
Slide 17: Langer Heinrich Project Overview
Langer Heinrich Project Overview Three successful production capacity Design Criteria Stage 2 Stage 3 expansions completed: Ore Throughput 2.5Mtpa 3.5Mtpa — 2.6Mlb (Stage 1) - 2008 Leach 1.5Mtpa 2.1Mtpa — 3.7Mlb (Stage 2) - late 2009 Throughput — 5.2Mlb (Stage 3) - early 2012 Ore Feed Grade 850ppm 8
Slide 18: Langer Heinrich: Operational Update
Langer Heinrich: Operational Update Consistently producing at or above Stage 3 nameplate rate — four full quarters at Stage 3 or better (over nameplate for 9 months FY13) — feed grades of 810ppm for March quarter consistent with design — recoveries above design at 86.7% continue to be achieved Water
Slide 19: Langer Heinrich Production
Langer Heinrich Production 18
Slide 20: Kayelekera Project Overview
Kayelekera Project Overview Production capacity of 3.3Mlb U3O8 pa Design Criteria Ore Throughput 1.5Mtpa Project ramp-up complete and running at Leach Throughput 1.5Mtpa or near nameplate Ore Feed Grade 1100ppm Recovery 87% First modern resin-in-pulp (RIP) uranium U3O8 Production 3.3Mlbpa processing
Slide 21: Kayelekera: Operational update
Kayelekera: Operational update Maintained high production levels in March 2013 quarter — production of 761,992lb — plant ran steady at 94% of nameplate with a slight bottleneck in RIP/Elution which is being addressed — record recoveries 87.2% and improving, particularly in both leach and RIP Acid in
Slide 22: Kayelekera Quarterly Production
Kayelekera Quarterly Production KM Quarterly Production and Grade Profile 7 day industrial 16 days planned action² maintenance3 Plant shutdown for 6 weeks¹ ¹ Plant offline for 3 weeks planned maintenance and 3 weeks remedial repairs to acid plant and drying and packaging plant ² 7 days industrial ac
Slide 23: Presentation Outline
Presentation Outline Company Status & Market Outlook - John Borshoff Financial Review – Alan Rule Operations Update – Mark Chalmers Conclusions – John Borshoff 22
Slide 24: Strategic Initiative
Strategic Initiative The Paladin platform becoming increasingly more attractive as uranium supply stagnates Key objectives from the strategic initiatives - EdF deal in Aug 12 contributed $200M to value unlocking - unlock value from Paladin’s extensive uranium asset base and accomplishments - utilise
Slide 25: Conclusion
Conclusion Paladin on track to continue solid production results – stated guidance FY13 on track 8.0-8.5Mlb Focused on further cost rationalisation Production optimisation through innovation to improve efficiency Strategic initiatives to reduce debt and strengthen the balance sheet Paladin’s pipelin
Slide 26: Paladin Energy Ltd Contact Details
Paladin Energy Ltd Contact Details Head Office Level 4, 502 Hay Street Subiaco Western Australia 6008 PO Box 201, Subiaco Western Australia 6904 Telephone: +61 (0) 8 9381 4366 Facsimile: +61 (0) 8 9381 4978 Email: paladin@paladinenergy.com.au Website: www.paladinenergy.com.au Investor Relations Team