Paladin Energy Ltd · ASX:PDN
Paladin Energy — H1 FY2011 Earnings Presentation
35 slides from Paladin Energy's earnings presentation, Feb 17, 2011
Slide 1: Paladin Energy Ltd – The New Energy in the Market
Paladin Energy Ltd The New Energy in the Market John Borshoff – Managing Director/CEO Garry Korte – Chief Financial Officer Wyatt Buck – Executive General Manager Production December 2010 Half Year and Investor Update 17 February 2011 1
Slide 2: Disclaimer
Disclaimer 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 resource potential, exploration drilling, exploitation activities and e
Slide 3: Presentation Outline
Presentation Outline Paladin – Status – Financial Review – Half Year to December 2010 – Uranium outlook – Projects – Outlook 3
Slide 4: Paladin Status
Paladin Status an emerging Tier 1 global uranium producer • S Sustained i d production d i - LHM at S Stage 2 design d i (3 (3.7Mlb) 7Mlb) • Ramping up production - KM at 80% design post period • Expansion (immediate) - LHM Stage 3 commissioning front end – March back end – April • Expansion (mid te
Slide 5: Paladin's Suite of Uranium Properties
Paladin’s Suite of Uranium Properties staged for sequential development 5
Slide 6: Presentation Outline
Presentation Outline Paladin – Status – Financial Review – Half Year to December 2010 – Uranium outlook – Projects – Outlook 6
Slide 7: Key Quarterly Highlights
Key Quarterly Highlights • Production – record quarter of 1,466,932lb, 1 466 932lb up 8% • Sales – 1,274,000lb at US$52/lb generates $66.3M, up 37% – current market price US$73/lb • Langer Heinrich Mine – design capacity production of 932,731lb, 932 731lb up 4% – achieved Stage 2 design capacity of
Slide 8: Production and Sales Performance
Production and Sales Performance Dec 10 Sept 10 Dec 10 Dec 09 Quarter Quarter Half Year Half Year Production (lb) – LHM 932,731 899,736 1,832,467 1,496,511 Production (lb) – KM 534,201 462,977 997,178 234,987 Total Production ((lb)) 1,466,932 , , 1,362,713 , , 2,829,645 , , 1,731,498 , , 63% Annuali
Slide 9: Gross Profit from Operations
Gross Profit from Operations LHM KM Dec 2010 Dec 2010 Quarter Half Year Revenue US$66.3M US$114.7M Volume Sold (lb) 944,000 330,000 1,274,000 2,317,000 Average sales price (per lb) US$52lb US$50lb Cost of Sales (C1) US$25.8M US$16.9M US$42.7M US$71.6M Cost of Sales (C1) – per lb US$27/lb US$51/lb US
Slide 10: Income Statement
Income Statement Dec 2010 half year • Sales revenue of US$114.7M, (US$50/lb average price) – uranium i price i iincreased d postt D Dec 2010 tto US$73/lb • Gross profit of US$21.0M • Exploration expenditure of US$9.4M – Valhalla resources up 9% to 76.2Mlb U3O8 – Odin initial resource of 10.3Mlb U3O8
Slide 11: Income Statement (continued)
Income Statement Dec 2010 half year (continued) • Finance costs of US$33.7M US$33 7M – full interest charge of US$17.5M since KM ceased capitalisation – US$16.2M non-cash items, US$6.3M for bond buyback • Tax Credit of US$21.6M – higher due to tax losses not previously recognised • Loss after tax of
Slide 12: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow Dec 2010 half year • Cash and cash equivalents of US$251.8M – held with Australian banks with minimum AA rating • Cash outflow from operating activities of US$72.4M – LHM & KM generated positive cash of US$35 US$35.6M 6M before working capital – U$65.3M invested in workin
Slide 13: Presentation Outline
Presentation Outline Paladin – Status – Financial Review – Half Year to December 2010 – Uranium outlook – Projects – Outlook 13
Slide 14: World Nuclear Capacity - Growth is Assured
World Nuclear Capacity - Growth is Assured number of reactors p proposed p to be operating p g by y 2030 Status Jan 2011 Current Nuclear Under Construction Planned Capacity Reactors / (Capacity) 443 (377.2GWe) 62 (64.6GWe) [53] 156 (174.7GWe) [142] 178 Mlb U3O8 required q (WNA Estimate) Countries 31
Slide 15: Uranium Price – supply tightening response
Uranium Price – supply tightening response CY 2009 to 2011 FY10 FY11 75.00 TT Term 70.00 UxC Term 65.00 Term TT Spot 60.00 UxC Spot 55 00 55.00 Spot 50.00 45 00 45.00 40.00 35 00 35.00 Apr-09 Jan-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Apr-10 Jan-10 May-10 Jun-10 Jul-10 Aug-10 Sep
Slide 16: Presentation Outline
Presentation Outline Paladin – Status – Financial Review – Half Year to December 2010 – Uranium outlook – Projects – Outlook 16
Slide 17: Langer Heinrich Project Location
Langer Heinrich Project Location
Slide 18: Langer Heinrich Project
Langer Heinrich Project large resource/reserve upgrade MINERAL RESOURCES 250ppm Cut-off Mt Grade % U3O8 t U3O8 Mlb U3O8 Measured Resources 46 7 46.7 0 053 0.053 24 838 24,838 54 71 54.71 Indicated Resources 77.6 0.055 42,921 94.54 Measured + Indicated 124.3 0.055 67,758 149.25 Inferred Resources 18.
Slide 19: Langer Heinrich – staged growth
Langer Heinrich staged growth • Stage 1 – Alkaline leach, start-up Jan 2007 – design 2.6Mlb pa, CAPEX US$100M • Stage 2 – 12 months of nameplate production achieved – design 3.7Mlb pa, CAPEX US$59M • Stage 3 – Expansion – increase to 5 5.2Mlb 2Mlb pa – CAPEX US$120M-US$125M – construction advanc
Slide 20: Langer Heinrich – operational / expansion update
Langer Heinrich operational / expansion update • Quarterly production of 932,731lb – site record • Stage g 3 construction expanding p g operations p to 5.2Mlb pa p with mechanical completion targeting late March quarter. Delay result of:- – late delivery of engineering – equipment and fabrication de
Slide 21: Langer Heinrich Production
Langer Heinrich Production quarter by quarter Langer Heinrich Quarterly Results Stage g 2 design g 1000 928 927 933 899 900 Ramp-up 841 Stage 1 design 800 674 686 693 700 650 655 Production (000lb U3O8) 600 500 400 P 300 200 100 0 Sep‐08 Dec‐08 Mar‐09 Jun‐09 Sep‐09 Dec‐09 Mar‐10 Jun‐10 Sep‐10 Dec‐10
Slide 22: Langer Heinrich C1 costs - consistency
Langer Heinrich C1 costs - consistency 29 250 28 27 200 26 25 150 24 USD/lb 100 23 N$/lbs 22 50 21 20 -
Slide 23: Kayelekera Project Location
Kayelekera Project Location M26 Karonga-Chitipa Road Zambia Lake Malawi 5 km 5 mi 23
Slide 24: Kayelekera Geology and Resources
Kayelekera Geology and Resources Pit outline Final Pit Measured Indicated Inferred Grade Metal Grade Metal Grade Metal Mt ppm Mlb Mt ppm Mlb Mt ppm Mlb Resources 3.5 1,241 9.6 17.2 769 29.2 5.5 625 7.6 Reserves 13,285t grading 0.11% U3O8 for 29.3Mlb U3O8 400ppm cut off 24
Slide 25: Kayelekera Mine – design production status
Kayelekera Mine design production status • Front end proven to design tonnage • Major improvements to RIP throughput – providing results • Production levels will continue to rise Key focus areas • Improving operation utilisation and mechanical availability of the plant (including logistics) • Fine-t
Slide 26: Kayelekera Mine – operational update
Kayelekera Mine operational update • December qtr production of 534,201lb (highest achieved) vs 462,977lb previous qtr • Unscheduled downtime with diesel power plants and RIP circuits, actual 1320hrs vs expected 1800hrs • Both electrical generation and RIP issues resolved • Resin management currentl
Slide 27: Kayelekera Mine Production
Kayelekera Mine Production status December 2010 K l k Quarterly Kayelekera Q t l production d ti 600000 534201 515478 500000 462977 0lb U3O8) 400000 Production (000 300000 228996 200000 145315 100000 74086 0 Sept 09 Qtr Dec 09 Qtr Mar 10 Qtr June 10 Qtr Sept 10 Qtr Dec 10 Qtr 27
Slide 28: Paladin's Canadian Expansion
Paladin’s Canadian Expansion Aurora Energy asset acquisition • Acquisition of the Aurora Energy Uranium Assets from Fronteer Gold – 84Mlb Measured and Indicated plus 53Mlb Inferred resources, increasing global resource base by 35% – Located in the highly g yp prospective p Central Labrador Mineral B
Slide 29: Restrictions on Fronteer / Newmont Share Block
Restrictions on Fronteer / Newmont Share Block • Fronteer (and post-merger, Newmont) holds 52.1MM Paladin shares (6.7%). No resales allowed on the market before June 2, 2 2011 • Agreement with Fronteer (which continues in force after merger with Newmont) requires: - any planned disposition of a bloc
Slide 30: Other Projects
Other Projects expanding the pipeline • Mount Isa, Qld (part JV with Summit) – US$10M exploration budget targeted on resource expansion i – feasibility commences FY12 • Angela, NT (50% JV with Cameco) – resource verification ifi ti – preliminary scoping study will define exploration objectives • Big
Slide 31: Presentation Outline
Presentation Outline Paladin – Status – Financial Review – Half Year to December 2010 – Uranium outlook – Projects – Outlook 31
Slide 32: 6 Year Production Outlook
6 Year Production Outlook 15 14 13.8 Actual Forecast 13 12 11.3 LHM 11 KM Exp p Stage 4 10 LHM 8.7 9.0 9 Stage 3 8.2 Mlb 8 U3O8 76 6063 6.0‐6.3 5 4.3 4 2.7 3 2 1.71 1 0 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 Langer Heinrich Actual Langer Heinrich Production Kayelekera Actual Kayeleker
Slide 33: Project Pipeline
Project Pipeline assets acquired & projects developed 33
Slide 34: Key Takeaways
Key Takeaways strong growth • Production levels will continue to rise • Maintaining strong organic production growth profile • Strong development potential from project pipeline – Aurora uranium assets increase resource base by 35% – Mount Isa and Angela Projects – NGM properties in Niger highly pro
Slide 35: 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 61 (0) 8 9381 49 4978 8 Email: paladin@paladinenergy.com.au Website: www.paladinenergy.com.au 35