Paladin Energy Ltd · ASX:PDN
Paladin Energy — Australian Uranium Conference 2014
14 slides from Paladin Energy's conference presentation, Jul 17, 2014
Slide 1: The Question of Supply – Paladin Update
• The Question of Supply • Paladin Update John Borshoff, Managing Director/CEO Australian Uranium Conference 16 & 17 July 2014
Slide 2: Supply Study Considerations
Supply Study Considerations Updated every year since 2011 (4th annual edition) — prepared by multi-disciplinary internal team of experts (geology, mine development, operations, finance and marketing) Analysis includes study of the following — over 40 existing mines and 2 currently under construction
Slide 3: Supply Study Considerations (cont)
Supply Study Considerations (cont) Quality of deposits getting poorer – grades lower, risks higher, and more project failures should be expected Uranium projects require very long lead times to get to production — 6 to 10 years includes BFS, approvals, financing, design/construction, commissioning a
Slide 4: Supply – Highly Price Dependent
Supply – Highly Price Dependent Supply modeled under an assumed scenario where incentive prices begin to rise in the near term and continue increasing — most new supply by 2020 is from projects already under construction — Delayed uranium price increase pushes more expensive production forward and b
Slide 5: Supply/Demand Imbalance
Supply/Demand Imbalance Widening supply shortfall now structurally defined begins in 2016 — depressed prices and lack of incentive create supply shortfall in mid to long term — simply not enough time to bring more expensive mine supply into production to satisfy demand IP = Incentive Price 5
Slide 6: Supply Crisis is Brewing
Supply Crisis is Brewing Supply from new mines significantly constrained by 2 major factors 1. Significant technical, political & regulatory risks 2. Lack of economic incentive and financing to develop new projects — at current prices, development financing is unavailable and no new projects are eco
Slide 7: Huge Supply Challenge Ahead
Huge Supply Challenge Ahead Between now and 2020, new primary supply will have to contribute 70Mlb pa to meet demand requirements (excluding strategic inventory buildup) — in previous 12 year period (2003 – 2014), production increased by 61Mlb, and Kazakhstan accounted for 51Mlb, or 84% of the grow
Slide 8: Delayed Price Increase Making Supply Shortfall Much Worse
Delayed Price Increase Making Supply Shortfall Much Worse Even compared to Paladin’s previous study update (Oct. 2013), 2020 supply shortfall has increased 13% under revised incentive price scenario 8
Slide 9: Key Supply/Demand Takeaways
Key Supply/Demand Takeaways It’s all about supply! — demand is not the issue – any reasonable estimate of future uranium requirements points to a supply shortage — significant amount of secondaries will reduce with price increase and Japan start-ups Current price environment has frozen new developme
Slide 10: Paladin Update
PALADIN ENERGY LTD
Slide 11: Paladin Today
Paladin Today Uranium specialist with demonstrated achievements — among top 7 producers in the world — only fully independent uranium producer in the world — diversified global project pipeline for future development — proven builder/operator Fully committed to preserving Paladin’s strategic positio
Slide 12: Minority 25% JV Sale of Langer Heinrich
Minority 25% JV Sale of Langer Heinrich JV with CNNC a major fully integrated nuclear organisation Introduces a strong JV partner at project level — will enable the value of LHM asset to be maximised — will provide funding support for future growth Recognises Paladin as a partner of choice with prov
Slide 13: Material achievements are redefining Paladin
Material achievements are redefining Paladin Key focus areas for Paladin Paladin Achievements past 18 Achieve strong operational Deleverage the balance Establish sustainable Take advantage of future price months performance sheet cash flows resurgence 1. Significant cost reductions and produ
Slide 14: Conclusion
Conclusion Paladin on track to continue solid production results — stated guidance of 7.8Mlb to 8Mlb for FY14, expect in upper range Focused on further cost rationalisation and production optimisation for FY15 Strategic initiatives achieving balance sheet objectives and ability to leverage growth Ma