Paladin Energy Ltd · ASX:PDN
Paladin Energy — Q3 2016 Earnings Presentation
22 slides from Paladin Energy's earnings presentation, Nov 16, 2016
Slide 1: ASX cover letter: 30 September 2016 Quarterly Conference Call Presentation
PALADIN ENERGY LTD ACN 061 681 098 Ref: 418297_1.docx 15 November 2016 ASX Market Announcements By Electronic Lodgement Australian Securities Exchange 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam 30 September 2016 Quarterly Conference Call Presentation Attached please find the presentation in rel
Slide 2: September Quarter Results Conference Call and Investor Update
September Quarter Results Conference Call and Investor Update 16 November 2016 Alexander Molyneux – Chief Executive Officer Craig Barnes – Chief Financial Officer
Slide 3: 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 4: Paladin…
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 5: 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 6: 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 37.7Mlb Cumulative production 1 Source – UxC Uranium Production Cost Study – August 2015 2 Source – TradeTech Uranium Market Study – 2015: Issue 3 (base
Slide 7: Quarter to 30 September 2016 Highlights
Quarter to 30 September 2016 Highlights References below to 2016 and 2015 are to the equivalent three months ended 30 September 2016 and 2015 respectively. Production 1.293Mlbs US$25.19/lb ASP Increase from 1.083Mlb in 2015 Decrease from US$46.12/lb in 2015 Up 19% Down 45% C1 Cash Cost All-in Cash E
Slide 8: Quarter to 30 September 2016 Cash Flow
Quarter to 30 September 2016 Cash Flow Paladin Energy Ltd 6
Slide 9: EBITDA Variance Analysis
EBITDA Variance Analysis Paladin Energy Ltd 7
Slide 10: All-in Cash Expenditure (Breakeven Price)
All-in Cash Expenditure (Breakeven Price) Defined to include all spending excluding one off items Ahead on plans to reduce expenditure with low uranium price Reduced by US$16.94/lb vs. last year (excluding one off items) FY2015 Average US$50.75/lb FY2016 Average US$38.75/lb Paladin Energy Ltd
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 ― Working towards formal close in first quarter of 2017 calendar year Sale of 75% of Manyingee ― Binding terms sheet with MGT Resources Limited (MGT)
Slide 12: Capital Management
Capital Management Debt reduction1 of US$542.5M since Breakdown of Key Debt Instruments 1 US$M June 2012 Convertible Bonds due April 2017 212 Next maturity is April 2017 Convertible Bonds due March 2020 150 Implemented US$25M Revolving Credit Facility (US$20M drawn as at LHM Revolving Credit F
Slide 13: Optimisation a Core Competency
Optimisation a Core Competency Paladin maintains a world class technical services team focused on cash flow optimisation Processing costs stabilised at new benchmark Paladin Energy Ltd 11
Slide 14: Optimisation and Cost Reduction
Optimisation and Cost Reduction All-in cash costs variance analysis (FY2017 current guidance vs. FY2016 actual)1 19% reduced grade to 570ppm due to mining curtailment Mining and processing optimisation: ― Mining curtailment and processing of ore stockpiles ― Impact of BRP plus other optimisation ini
Slide 15: Uranium is unsustainable at < US$20/lb
Uranium is unsustainable at < US$20/lb A uranium price of US$20/lb is Global uranium cost curve vs forecasted achieved price (US$/lb) unsustainable into the future as historical fixed contracts roll off Taking into account contracts and un-contracted volumes, Paladin 2017 weighted avg achieved pri
Slide 16: The medium and long-term rationale for stronger uranium prices is compelling
The medium and long-term rationale for stronger uranium prices is compelling Consensus outlook for Uranium pricing (US$/lb) Broker commentary We don't believe the uranium price can sustain a sub US$30/lb 70 level for longer than a year given the cost structure of the industry and rising demand. On a
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 Amended LHM mine plan Production 3.8-4.0Mlb to enhance operating level cash flows LHM C1 US$17-19/lb “All in” US$29-31/lb US$14M corporate costs, December Quarter: Sales 1.40Mlb-1.60Mlb KM care and maintenance ASP US$25-27/lb1 and exploration LHM C1 cash cost US$17-19/lb2 US$5M
Slide 19: Appendix
Appendix Paladin Energy Ltd 17
Slide 20: Langer Heinrich Project Update
Langer Heinrich Project Update Actuals June Sep Quarter Production September Quarter Quarter ― 1.293 Mlb FY2016 FY2016 FY2017 ― recovery 87.7% Ore treated (kt) 843 847 950 C1 Cost US$16.45/lb, a record Ore grade (ppm) 670 706 704 low ― consequent to stockpile write-down Recovery (%) 89.2 82.2 87
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 ― Subject to partial sale agreement ― minimum activity planned for FY2017 ― FLT a
Slide 22: 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