Paladin Energy Ltd · ASX:PDN
Paladin Energy — FY2014 Earnings Presentation
24 slides from Paladin Energy's earnings presentation, Aug 28, 2014
Slide 1: June 2014 Full Year Conference Call Presentation
PALADIN ENERGY LTD ACN 061 681 098 Ref: 351193 28 August 2014 ASX Market Announcements By Electronic Lodgement Australian Securities Exchange 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam June 2014 Full Year Conference Call Presentation Attached please find the presentation in relation to the year
Slide 2: Annual Results Conference Call and Investor Update
Annual Results Conference Call and Investor Update 29 August 2014 John Borshoff – Managing Director/CEO Craig Barnes – Chief Financial Officer Mark Chalmers – Executive General Manager, Production
Slide 3: 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 4: Presentation Outline
Presentation Outline Key Achievements and Update Uranium Market Update Financial Review Project Update Outlook 2
Slide 5: Key Achievements for FY14
Key Achievements for FY14 Strong production for FY14 and guidance met — 7.943Mlb U3O8 - upper end of stated guidance (7.8Mlb to 8.0Mlb) — Langer Heinrich produced a record 5.592Mlb U3O8 up 5.7% from FY13 — progressive dropping of average feed grades — key innovation initiatives successfully implemen
Slide 6: Material Achievements are Redefining Paladin
Material Achievements are Redefining Paladin Key focus areas for Paladin Achieve strong Deleverage Establish Take advantage of Paladin Achievements past 18 months operational the balance sustainable future price performance sheet cash flows resurgence 1. Significant cost reductions and production op
Slide 7: What We Plan To Do In FY15
What We Plan To Do In FY15 FY15 production guidance for Langer Heinrich in the range of 5.4 to 5.8Mlb U3O8 Further reduce unit production costs at Langer Heinrich through continued — cost management — optimisation of existing processes — development and implementation of process innovations Continue
Slide 8: Presentation Outline
Presentation Outline Key Achievements and Update Uranium Market Update Financial Review Project Update Outlook 6
Slide 9: Uranium Market Snapshot
Uranium Market Snapshot $33.00 — steady uranium spot price increase US$32.56 $32.00 $31.00 since late July (+15%) $30.00 — spot market fundamentals improving $29.00 with increased liquidity $28.00 — term market contract volumes already triple that of entire 2013 Source: UxC Daily Broker Average Pric
Slide 10: Uranium Market Update
Uranium Market Update Reactors under construction continue to increase (now 72 and growing) Japanese reactor restarts — Japanese utilities have submitted applications for safety reviews for 20 reactors — 16 July – NRA approved a draft safety test report for Sendai 1 & 2 (Kyushu Electric) — local gov
Slide 11: Term Contract Market Update
Term Contract Market Update Volume contracted in CY2013 for future delivery totaled 20Mlb — historically, annual term volume exceeded 150Mlb for future delivery To Mid-CY2014, term volume reported at more than 60Mlb — thus far, U.S. nuclear utilities have continued to favor mid-term delivery period
Slide 12: Price Delay Exacerbating Supply Shortfall
Price Delay Exacerbating Supply Shortfall Key considerations — even compared to Paladin’s previous study update (Oct. 2013), 2020 supply shortfall has increased 13% under revised incentive price scenario — depressed prices and lack of new mines create structural supply shortfall — Paladin S/D study
Slide 13: Presentation Outline
Presentation Outline Key Achievements and Update Uranium Market Update Financial Review Project Update Outlook 11
Slide 14: Profit & Loss Year Ended June 2014
Profit & Loss Year Ended June 2014 Revenue of US$328.8M – down 19% — 8.665Mlb sold at average realised price of US$37.9/lb Gross loss from operations of US$3.4M (excluding impairment) — average C1 costs for FY14 at US$28.80/lb (excluding KM) Impairments of US$296.3M (after tax) — US$255.7M after tax
Slide 15: Cash Flow Year Ended June 2014
Cash Flow Year Ended June 2014 Cash and cash equivalents of US$88.8M — large cash draw for the quarter primarily due to debt servicing — receipt of US$170M balance of proceeds from LHM minority sale in July — successful refinancing of LHM project finance facility Cash inflow from operating activitie
Slide 16: Snapshot of Paladin's Capital Structure
Snapshot of Paladin’s Capital Structure Paladin’s debt maturity profile (calendar year end - drawn facilities) Total debt as at 29 August 2014 (US$M) Convertible bond LHM Term Loan 350 Overview US$M 300 250 LHM Term Loan 70 200 Convertible Bonds due November 2015 300 150 Convertible Bonds due April
Slide 17: Presentation Outline
Presentation Outline Key Achievements and Update Uranium Market Update Financial Review Project Update Outlook 15
Slide 18: Langer Heinrich Project Update
Langer Heinrich Project Update Strong operational results Actual Actual — record annual production of 5.59Mlb U3O8 for FY14 FY14 Jun’14 — FY14 guidance achieved and at upper end Qtr — FY15 guidance is 5.4Mlb to 5.8Mlb — production in Sept qtr is expected to be down as a Ore processed 3.72Mt 0.91Mt r
Slide 19: Kayelekera Project Update
Kayelekera Project Update Strong production results — 2.35Mlb for FY14 Actual Actual — recoveries remained high at 86.2% for FY14 FY14 Jun’14 Qtr Ore processed 1.04Mt 0.13Mt C1 cost initiatives better than target — C1 cost for FY14 US$35.90/lb down 16% Ore feed grade 1,207ppm 1,052ppm — largest redu
Slide 20: Key Pipeline Projects
Key Pipeline Projects Updated Indicated mineral resource to 15.7Mlb U3O8 with 10.2Mlb U3O8 remaining in Inferred Low-cost ISR project targeting 2Mlb pa U3O8 production – existing mining lease MANYINGEE – Paladin has the expertise to develop WA 2018 development target (price dependent) – field leach
Slide 21: Presentation Outline
Presentation Outline Key Achievements and Update Uranium Market Update Financial Review Project Update Outlook 19
Slide 22: Positioned for the Future
Positioned for the Future Long term underpinned with 2 strong, reputable nuclear utilities in place — CNNC with 25% JV interest in Langer Heinrich US$190M — EdF key delivery contract 2019-2024 with US$200M prepayment made Jan 2012 Proven builder/operator — extensive uranium expertise in the group (t
Slide 23: Conclusion
Conclusion Guidance for FY2015 is 5.4Mlb to 5.8Mlb FY15 priorities — further cost rationalisation at operations and corporate level — strong operational performance through production optimisation — deleveraging the balance sheet — remaining positioned to take advantage of the future uranium price r
Slide 24: 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 Te