Paladin Energy Ltd · ASX:PDN
Paladin Energy — H1 FY2014 Earnings Presentation
24 slides from Paladin Energy's earnings presentation, Feb 14, 2014
Slide 1: December 2013 Half Year and Quarter Results Conference Call and Investor Update
December 2013 Half Year and Quarter Results Conference Call and Investor Update 14 February 2014 John Borshoff – Managing Director/CEO Alan Rule – CFO Mark Chalmers – Executive General Manager, Production February 2014
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 Key Achievements and Update Uranium Market Update Financial Review Project Update Positioning for the Future 2
Slide 4: Material Achievements are Redefining Paladin
Material Achievements are Redefining Paladin The 4 Key Company Initiatives Achieved Operations – solid production/unit cost reduction continues Minority Equity Sale - successful Project Refinancing – collateral utilisation KM Care & Maintenance – cost reduction / asset preservation Bottom line over
Slide 5: Highlights
Highlights Record combined production for Langer Heinrich and Kayelekera — 4.253Mlb (1,929t) U3O8 for six months to December 2013 Minority sale of Langer Heinrich — introduces a world class JV party with access to world’s fastest growing market — sale proceeds of US$190M including non refundable dep
Slide 6: Presentation Outline: Key Achievements and Update
Presentation Outline Key Achievements and Update Uranium Market Update Financial Review Project Update Positioning for the Future 5
Slide 7: Supply Fundamentals Deteriorating
Supply Fundamentals Deteriorating Mine suspension or closures — Kayelekera, Honeymoon, Priargunsky Mine No. 2 Supply disruptions — Ranger, Rossing, Somair, Cominak Production delays — Cigar Lake, Imouraren, Husab Suspension / Delays of future planned developments — Greenfield - Kintyre, Toro’s Wilun
Slide 8: Price Catalysts – demand and shortage
Price Catalysts – demand and shortage Reactors under construction continue to increase (now 70 and growing) Japanese reactor restarts — 16 reactors undergoing safety evaluations by Nuclear Regulation Authority (NRA) — economically unsustainable and uncompetitive without nuclear — political support s
Slide 9: Presentation Outline
Presentation Outline Key Achievements and Update Uranium Market Update Financial Review Project Update Positioning for the Future 8
Slide 10: Profit & Loss December 2013 Half Year
Profit & Loss December 2013 Half Year Revenue of US$171.4M — 4.448Mlb sold at average realised price of US$38.4/lb — sales of 2.775Mlb in December 2013 quarter Gross loss from operations (excluding impairments) of US$4.4M — average cost of sales of US$39.5/lb before KM inventory impairment — KM (inv
Slide 11: Cash Flow December 2013 Half Year
Cash Flow December 2013 Half Year Cash and cash equivalents of US$99.4M Cash inflow from operating activities of US$4.3M — includes interest paid of US$16.6M Cash outflow from investing activities of US$17.2M — US$15M plant and equipment acquisitions — US$2.6M exploration expenditure Cash inflow fro
Slide 12: C1 Cost of Production - Positive Trends Continue
C1 Cost of Production - Positive Trends Continue Langer Heinrich Significant cost reductions and production optimisation at site Focus also on corporate cost efficiencies Kayelekera T “Proven ability to reduce costs through production optimisation” 11
Slide 13: Material Changes to Future Cashflows
Material Changes to Future Cashflows Langer Heinrich/Kayelekera Refinancing — US$59M reduction in debt repayments over CY14 and CY15 — Langer Heinrich debt repayments reduced by US$5.5M pa — overall reduction in debt US$14.5M Minority Sale Proceeds — will be applied predominantly to debt reduction a
Slide 14: Langer Heinrich Minority Sale
Langer Heinrich Minority Sale 25% JV equity stake to China National Nuclear Corporation (CNNC) — consideration of US$190M US$20M non-refundable deposit to Paladin — currently held in escrow, with release upon receipt of: (i) Lenders consent (ii) Bank of Namibia approval to assign intercompany loans
Slide 15: Presentation Outline
Presentation Outline Key Achievements and Update Uranium Market Update Financial Review Project Update Positioning for the Future 14
Slide 16: Langer Heinrich Project Update
Langer Heinrich Project Update Three successful production capacity Actual Budget Actual expansions completed FY13 Dec’13 Dec’13 — 5.2Mlb with Stage 3 starting mid 2012 YTD YTD — currently producing above budget Ore processed 3.54Mt 1.84Mt 1.83Mt — Dec qtr >5.7Mlb pa rate Ore feed grade 812ppm 753pp
Slide 17: Langer Heinrich Quarterly Production
Langer Heinrich Quarterly Production LHM Quarterly Production & Feed Grade 1600 1200 U₃O₈ Production (000) 1400 1000 1200 Grade (ppm) 800 1000 800 600 600 400 400 1431 1429 1353 1419 1230 200 1290 1322 1193 1052 796 650 674 686 693 655 842 928 927 900 933 896 849 200 0 0 Oct-Dec Jan-Mar Apr-Jun Oct-
Slide 18: Kayelekera Project Update
Kayelekera Project Update First modern resin-in-pulp (RIP) uranium Actual Budget Actual processing facility FY13 Dec’13 Dec’13 YTD YTD Production capacity of 3.3Mlb U3O8 pa Ore 1.3Mt 0.67Mt 0.59Mt processed C1 cost initiatives for FY13 successful and better than target Ore feed 1,143ppm 1,181ppm 1,2
Slide 19: Kayelekera – Care & Maintenance from May/June 2014
Kayelekera – Care & Maintenance from May/June 2014 7 February 2014 decision to go to care and maintenance — unavoidable in current uranium price environment — preserve resource to allow better utilisation and future profitability Transition from operating to care and maintenance — processing will co
Slide 20: Presentation Outline
Presentation Outline Key Achievements and Update Uranium Market Update Financial Review Project Update Positioning for the Future 19
Slide 21: New Joint Venture Partner for Langer Heinrich
New Joint Venture Partner for Langer Heinrich CNNC is a major nuclear organisation of China — is engaged in the scientific research and development, construction and operation in such fields as nuclear power, nuclear fuel cycle, nuclear technology application and nuclear environmental engineering, a
Slide 22: Positioned for the Future
Positioned for the Future Solid reputable JV partner for LHM in place — Company now in strong position to achieve future goals Proven builder/operator — extensive uranium expertise in the group (technical, environmental, health, social) — only company in the world to have successfully developed two
Slide 23: Conclusion
Conclusion Paladin on track to continue solid production results – on track with revised guidance of 7.8Mlb to 8Mlb for FY14 Focused on further cost rationalisation and production optimisation Proven management team that has delivered on both operational and strategic goals Strategic initiatives to
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 Team