Paladin Energy Ltd · ASX:PDN
Paladin Energy — Q3 FY2017 Earnings Presentation
23 slides from Paladin Energy's earnings presentation, May 16, 2017
Slide 1: March Quarter 2017 Conference Call and Investor Update Presentation
PALADIN ENERGY LTD ACN 061 681 098 Ref: 424528 16 May 2017 ASX Market Announcements By Electronic Lodgement Australian Securities Exchange 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam March Quarter 2017 Conference Call and Investor Update Presentation Attached please find the presentation in rela
Slide 2: March Quarter Results Conference Call and Investor Update
PALADIN ENERGY LTD March Quarter Results Conference Call and 12 December, 2016 Investor Update 17 May 2017 Private and Confidential Paladin Energy | March 2017 Quarterly Results | 0
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 res
Slide 4: Langer Heinrich A Strategic Tier One Mine
Langer Heinrich A Strategic Tier One Mine First Quartile C1 Cash Cost1 Top 10 Uranium Mine 2 by Production 4th largest open-pit Mineral Resources depleted to 30th June 2016 3 +20 Year Mine Life Class Measured Indicated Tonnes Mt 64.3 21.5 Grade ppm 516 458 Metal Mlb 73.23 21.71 Total M+I 85.8 502 94
Slide 5: Non-Langer Heinrich Portfolio – An Industry Leading Suite of Development Assets
Non-Langer Heinrich Portfolio – An Industry Leading Suite of Development Assets Michelin (100%) Mt Isa (82/91/100%) 91,500ha mineral licence in Direct 50% interest in 2,724ha of Labrador licences and 82% ownership of ASX-listed Summit Resources 336,130m of cumulative linear drilling Largest
Slide 6: Results Overview and Optimisation Success
Results Overview and Optimisation Success 1 Paladin Energy | March March 2017 2017 Quarterly Quarterly Results Results | 4
Slide 7: Quarter to March 2017 Highlights
Quarter to 31 March 2017 Highlights References below to 2016 are to the equivalent quarter ended 31 March 2016 Production 896,070lb US$19.54/lb ASP Decrease from 1.302mlb in 2016 Mining curtailment fully implemented Decrease from US$34.67/lb in 2016 Down 31% Down 44% C1 Cash Cost Sales 730,642lb US$
Slide 8: Quarter to March 2017 Cash Flow
Quarter to 31 March 2017 Cash Flow 35.0 30.0 1.7 (3.5) 26.7 (2.5) 25.0 (0.6) 21.8 20.0 US$m 15.0 10.0 5.0 0.0 31 Dec 2016 cash LHM free cash flow Corporate, exploration, Restructure costs Interest paid 31 Mar 2017 cash balance balance KM C&M costs Paladin Energy | March 2017 Quarterly Results | 6
Slide 9: Quarter to March 2017 EBITDA Variance Analysis
Quarter to 31 March 2017 EBITDA Variance Analysis (0.8) (0.6) 0.0 (11.0) 1.2 0.7 9.0 (0.1) US$m -5.0 -10.0 0.4 -15.0 Q3 FY2016 Uranium sales Sales volume Unit cost of sales Interest income Administration KM C&M Q3 FY2017 EBITDA price variance EBITDA Paladin Energy | March 2017 Quarterly Results | 7
Slide 10: Optimisation Success: Significant C1 Cost Reductions
Optimisation Success: Significant C1 Cost Reductions Optimisation has resulted in a reduction in C1 Cash Costs by around US$10/lb C1 Cash Cost (US$/lb) 35 30.55 30 26.50 28.52 27.66 25.27 25 20 US$/lb Record Low 16.25 15 Mining Curtailment 10 Flash Splash (3QFY17) - US$0.25/lb stand-alone saving 5 B
Slide 11: Optimisation Success: Exploration and Other Controllable Costs
Optimisation Success: Exploration and Other Controllable Costs Exploration and other controllable costs have been significantly reduced and are expected to hit a "run rate" of c. US$11m per year from FY18E Exploration 43.9 Reduction of c. 75% December quarter, sold stake in Deep Yellow and 26.4 th
Slide 12: Restructure Update
Restructure Update 2 Paladin PaladinEnergy Energy | | March March 20172017 Quarterly Quarterly Results Results | 10
Slide 13: Restructure Update
Restructure Update Announced proposed balance sheet restructuring (Plan A Restructure Proposal) 10 January 2017 The structure contemplated exchanging Paladin’s US$362 million in Convertible Bonds into one new coupon paying Bond and one Convertible Bond maturing in 2022 and 2024, as well as a por
Slide 14: Where to next?
Where to next? CNNC’s action means it is prudent to have broad agreement of a Plan B restructure in case Plan A can’t be implemented An independent valuation of Paladin’s 75% in LHM should be complete in 5-6 weeks. Once valuation is known, CNNC will have 30-days to notify Paladin whether it inte
Slide 15: Overview of Plan B Restructure Proposal
Overview of Plan B Restructure Proposal Plan B will only be pursued in the event CNNC acquires Paladin’s 75% interest in LHM Material deleveraging of the group: Distribute the proceeds from any sale of Paladin’s interest in LHM and LHU to key material creditors (EDF and the Bondholders). Key objec
Slide 16: Overview of Plan B Restructure Proposal
Overview of Plan B Restructure Proposal Plan B will only be pursued in the event CNNC acquires Paladin’s 75% interest in LHM EDF fully repaid in priority to the 2017 and 2020 Bondholders. In exchange, certain amendments to the EDF LTSC to be agreed for continuation of the offtake agreement EDF EDF
Slide 17: Significant Leverage To Uranium Upside
Significant Leverage To Uranium Upside 3 Paladin PaladinEnergy Energy || March March 2017 2017 Quarterly Quarterly Results Results | 15
Slide 18: Pipeline Projects
Pipeline Projects Kayelekera Mine, Malawi Fully built mine on active care and maintenance • ownership - Paladin 85% and Government of Malawi 15% • commenced operations in 2009 – Production capacity 3.3mlbp.a. • placed on care and maintenance in 2014, having Produced 10.7mlb • progressing Definitiv
Slide 19: Pipeline Projects
Pipeline Projects Michelin Deposit, Canada Among the largest undeveloped deposits in North America • ownership – Paladin 100%, acquired in February 2011 • resource – 84.1mlb Measured & Indicated, 22.9mlb Inferred • in 2015, received Canadian Government non resident production approval • additional
Slide 20: Strategy and Outlook
Strategy and Outlook 4 Paladin PaladinEnergy Energy || March March 2017 2017 Quarterly Quarterly Results Results | 18
Slide 21: Strategy
Strategy MAXIMISE LHM OPERATING CASH FLOWS THROUGH CONTINUED OPTIMISATION INITIATIVES WHILST PRESERVING THE INTEGRITY OF THE LONG-TERM LIFE OF MINE PLAN MAINTAIN KM AND EXPLORATION ON A “MINIMAL EXPENDITURE, CARE AND MAINTENANCE BASIS” MINIMISE CORPORATE AND ADMINISTRATIVE COSTS COMPLETE BALANCE SHE
Slide 22: FY2017 Guidance
FY2017 Guidance Amended LHM mine plan Production in excess of 4.0mlb to enhance operating level cash flows LHM C1 US$16.50-18.50/lb “All in” US$29-31/lb US$14m corporate costs, KM care and June Quarter maintenance and exploration Sales 1.1mlb-1.3mlb US$5m lower than FY2016 Production 750,000lb-850,0
Slide 23: 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