Slide 1: Annual Results Conference Call and Investor Update
Annual Results Conference Call and Investor Update 25 August 2016 Alexander Molyneux – Chief Executive Officer Craig Barnes – Chief Financial Officer
Slide 2: Disclaimer and Notes for JORC and NI 43-101
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 res
Slide 3: Paladin: A Global Uranium Leader
Paladin…. A GLOBAL URANIUM LEADER OWNS LANGER HEINRICH, A STRATEGIC TIER ONE MINE HAS OPTIMISATION AS A CORE COMPETENCY PROVIDES BEST SENIOR LEVERAGE TO URANIUM UPSIDE Paladin Energy Ltd 2
Slide 4: Global Uranium Leader
Global Uranium Leader Paladin is the world’s leading independent pure play uranium miner 27.4 Annual Capacity KazAtomProm 24.5 Mlb Areva 23.5 Cameco 23.5 ARMZ/Uranium One 21.4 Rio Tinto 11.8 BHP Billiton 8.8 Paladin 8.0 Navoi 6.2 Government owned Divisions of diversified companies Integrated with no
Slide 5: Langer Heinrich A Strategic Tier One Mine
Langer Heinrich A Strategic Tier One Mine First Quartile C1 Cash Cost1 Top 10 Uranium Mine by 2 Production 4th largest open-pit +20 Year Mine Life3 36.4Mlb Cumulative production 1 Source – UxC Uranium Production Cost Study – August 2015 2 Source – TradeTech Uranium Market Study – 2015: Issue 3 (base
Slide 6: Year to June 2016 Highlights
Year to 30 June 2016 Highlights References below to 2016 and 2015 are to the equivalent twelve months ended 30 June 2016 and 2015 respectively. Production 4.763Mlb LTIFR 1.8 Drummed Production 4.737Mlb Compared to 2.4 in 2015 US$37.75/lb ASP C1 Cash Cost US$25.88/lb 4.56/lb above average spot US$33.
Slide 7: Year to June 2016 Highlights
Year to 30 June 2016 Highlights References below to 2016 and 2015 are to the equivalent twelve months ended 30 June 2016 and 2015 respectively. Sales revenue Cost of Sales US$184.9M US$152.5M 4.899Mlb sold at average Decrease from 2015 realised price of US$37.75/lb Cost of Sales of US$189.7M Down 7%
Slide 8: Year to June 2016 Cash Flow
Year to 30 June 2016 Cash Flow Cash flow Analysis 200 190 (60.9) 180 183.7 170 160 150 140 130 (56.4) 120 110 46.1 (17.9) US$M 100 90 (27.8) 80 70 (5.9) (1.7) 60 50 58.8 59.2 40 30 20 10 0 30 Jun 2015 Repayment of Partial Restructuring Acquisition 30 Jun 2015 LHM free Corporate, Interest paid 30 Jun
Slide 9: EBITDA Variance Analysis
EBITDA Variance Analysis Year to 30 June 2016 vs. Year to 30 June 2015 30 3.3 25 2.4 24.8 8.3 20 15 28.6 0.7 10 (0.8) (0.5) US$M 5 0 -5 -10 -15 3.7 (20.9) -20 -25 Paladin Energy Ltd 8
Slide 10: All-in Cash Expenditure (Breakeven Price)
All-in Cash Expenditure (Breakeven Price) Year to 30 June 2016 vs. Year to 30 June 2015 Defined to include all spending FY2015 Actual all-in cash costs 50.75 Ahead on plans to reduce expenditure with low uranium Production (Volume and grade) 2.92 price Reduced by US$12/lb vs. last Mining Contr
Slide 11: Strategic Outcomes
Strategic Outcomes Sale of 24% of LHM ― Non-binding term sheet executed ― Expected to raise US$175M ― Long-term arrangements for uranium off-take ― Formal close of the transaction in fourth quarter of 2016 calendar year Sale of 75% of Manyingee ― Binding terms sheet with MGT Resources Limited (M
Slide 12: Capital Management
Capital Management Debt reduction1 Breakdown of Key Debt Instruments 1 US$M ― US$552.5M since June 2012 ― US$123M during year to 30 June Convertible Bonds due April 2017 212 2016 • US$62M reduction in 2017 CB Convertible Bonds due March 2020 150 • US$61M repayment of LHM Total Debt 362 Syndicated
Slide 13: Optimisation a Core Competency
Optimisation a Core Competency Paladin maintains a world class technical services team focused on cash flow optimisation BRP continues to operate well above design Future outlook for processing costs still US$8/lb TSF3 return water issue is now resolved and the circuit absorbed the impact, but
Slide 14: Optimisation a Core Competency
Optimisation a Core Competency All-in cash costs variance analysis (FY2017 current guidance vs. FY2016 actual)1 FY2016 Actual all-in cash costs 38.75 Production (Volume and grade) 19% reduced grade to 570ppm due to mining 4.70 curtailment Mining (8.14) Mining and processing optimisation: ― Suspensio
Slide 15: Best Leverage to Uranium Upside
Best Leverage to Uranium upside Global utilities are creating a gap that needs to be filled Utility Requirements vs Contracting 2006-15 300.000 250.000 200.000 Utility contracting M lbs U3O8 Non-US Utility Contracting 150.000 US Utility Contracting Demand strong through 2010 100.000 Weak buying
Slide 16: Best Leverage to Uranium Upside
Best Leverage to Uranium Upside Uranium market liquidity improving and outlook remains robust Demand ― Japan restarts continue – Ikata 3 just Broker Uranium Price Forecast1 restarted US$/lb ― USA has been a short-term issue last 5-6 65 months: • Historically low natural gas prices 60 • Absence of
Slide 17: Strategy
Strategy 1. Maximise LHM operating cash flows through optimisation initiatives whilst preserving the integrity of the long-term life of mine plan 2. Maintain KM and exploration on a “minimal expenditure, care and maintenance basis” 3. Minimise corporate and administrative costs 4. Progress strategic
Slide 18: FY2017 Guidance
FY2017 Guidance Review of LHM mine plan Production 3.8-4.0Mlb to reduce costs substantially “All in” US$32-34/lb LHM C1 US$19-22/lb Potentially lower post new plan and repayment of 2017 CB US$14M corporate costs, September Quarter: KM care and maintenance Sales 650,000lb-750,000lb and exploration
Slide 19: Appendix
Appendix Paladin Energy Ltd 18
Slide 20: Langer Heinrich Project Update
Langer Heinrich Project Update Actuals Jun Quarter Full Year Production June Quarter ― 1.119 Mlb (4.763 Mlb full year) FY2015 FY2016 FY2015 FY2016 ― recovery 89.2% Ore treated (Mt) 0.887 0.843 3.398 3.574 C1 Cost US$26.60/lb, within Ore grade (ppm) 778 670 768 699 guidance at $25.88/lb for Recov
Slide 21: Pipeline Projects
Pipeline Projects Kayelekera Mine ― now stable in C&M ― site stable in terms of water and other environmental issues for the long term Michelin Deposit Canada ― minimum expenditure planned for FY2017 Manyingee WA ― minimum activity planned for FY2017 ― FLT application to be lodged in next half
Slide 22: 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 An