Paladin Energy Ltd · ASX:PDN
Paladin Energy — Investor Presentation (November 2014)
36 slides from Paladin Energy's investor presentation, Nov 24, 2014
Slide 1: Placement, Entitlement Offer, and Company Outlook
PLACEMENT, ENTITLEMENT OFFER, AND COMPANY OUTLOOK 24 November 2014 NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Slide 2: Disclaimer
Disclaimer This presentation and any oral presentation accompanying it has been prepared by Paladin Energy Ltd (“Paladin” or “the Company”) in relation to a pro-rata non-renounceable entitlement offer (the “Entitlement Offer") of new shares in Paladin ("New Shares"). Summary information You should n
Slide 3: Presentation Outline
Presentation Outline Recapitalisation Overview Uranium Market Update Key Investment Highlights Outlook And Conclusion Key Risks Foreign Selling Restrictions NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES 2
Slide 4: Recapitalisation overview
Recapitalisation overview Paladin announces a number of measures to recapitalise the company and address the medium term funding requirements, including the 2015 CB maturity Equity raising totaling ~A$205 million (~US$177 million1) to be applied towards repayment of Paladin’s US$300 million Converti
Slide 5: Offer structure
Offer structure Sources and uses summary Sources of capital A$mm US$mm Uses of capital A$mm US$mm Cash on balance sheet (30 Sep 2014) 243 210 Repayment/tender for 2015 CBs 348 3001 Placement 61 52 Transaction costs 6 5 Entitlement Offer 144 125 Cash on balance sheet 94 81 Total sources of capital $4
Slide 6: Pro-forma debt profile
Pro-forma debt profile Debt maturity profile (US$mm) 2017 CBs LH Term Loan Existing 2015 CBs 300 250 200 Cash tender 150 300 or repayment 274 100 50 0 CY 2014 CY 2015 CY 2016 CY 2017 CY 2018 CY 2019 CY 202 Total debt (US$mm) 5 9 9 283 19 19 Pro-forma cash position (US$mm) 2015 ~ 52 (5 ) ~ ~ (300 ) ~
Slide 7: Pro-forma balance sheet
Pro-forma balance sheet 1 2 (+) Equity proceeds Pro (-) Repayment of 2015 Pro 30 Sep 2014 (USD mm) (-) Trans. costs Forma CBs forma Cash 210 171 (177 - 6) 381 (300) 81 LH Facility 70 70 70 2015 CBs 300 300 (300) - 2017 CBs 274 274 274 New long-dated CBs - - - Total Debt 644 644 344 Net Debt (ND) 434
Slide 8: Placement and Entitlement Offer Indicative timetable
Placement and Entitlement Offer Indicative timetable Event Date1 Trading halt on ASX, Placement and Entitlement Offer announcement Pre-market, Monday, 24 November 2014 Institutional tranche of the Entitlement Offer (“Institutional Entitlement Offer”) opens 9:30am, Monday, 24 November 2014 Placement
Slide 9: HOPU – long term strategic investor
HOPU – long term strategic investor — Private equity firm focusing on China-related investment opportunities with offices located in Beijing, Hong Kong, and Singapore — Key investment focus is to create, develop and pursue investment opportunities that are About HOPU driven by China’s ongoing econom
Slide 10: HOPU – subscription agreement
HOPU – subscription agreement 15% placement at A$0.42 per share, being a premium of ~15% to the 30 day VWAP1 to 21 November of A$0.364 FIRB approval allows for an investment by HOPU in Paladin of up to 19.99% Committed to subscribe for full entitlement under institutional component of Entitlement Of
Slide 11: Ongoing discussions with strategic partners
Ongoing discussions with strategic partners Paladin continues to strengthen strategic alliances — Partnership with HOPU announced — Discussions ongoing with major nuclear utilities — Paladin has established a clear and realistic roadmap for discussions — Decision on preferred utility/strategic partn
Slide 12: Deleveraging remains a key priority
Deleveraging remains a key priority Long term sales deal Minority equity stake sale Introduction of HOPU to with EdF, a leading in LHM to CNNC for share register at a global nuclear utility US$190 million, premium with US$200 million establishing a successful (US$52 million) prepayment partnership S
Slide 13: Presentation Outline
Presentation Outline Recapitalisation Overview Uranium Market Update Key Investment Highlights Outlook And Conclusion Key Risks Foreign Selling Restrictions NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES 12
Slide 14: Uranium market snapshot
Uranium market snapshot US$/lb U3O8 Spot Price • Dramatic uranium spot price increase 46 44 since May (~50%) 42 40 • Spot market fundamentals improving 38 US$38/lb as supply tightens and demand rises 36 34 32 • Term market contract volumes already 30 triple that of entire 2013 28 • Additional term c
Slide 15: Uranium market update
Uranium market update US Mid-Term elections expected to boost US nuclear power programme Japanese reactor restarts imminent — Japanese utilities have submitted applications for safety reviews for 20 reactors — Sendai 1 & 2 (Kyushu Electric) received restart approval from Prefecture Governor on 7 Nov
Slide 16: Presentation Outline
Presentation Outline Recapitalisation Overview Uranium Market Update Key Investment Highlights Outlook And Conclusion Key Risks Foreign Selling Restrictions NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES 15
Slide 17: Investment highlights
Investment highlights Only uranium mining company to remain independent and available for association Corporate culture and strategy since inception designed for efficiency and growth A uranium mining house with a geographically diversified asset base Achievements that define Paladin — Successful mi
Slide 18: Presentation Outline
Presentation Outline Recapitalisation Overview Uranium Market Update Key Investment Highlights Outlook And Conclusion Key Risks Foreign Selling Restrictions NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES 17
Slide 19: Outlook
Outlook Guidance for FY15 of 5.4Mlb to 5.8Mlb U3O8 FY15 priorities – further cost rationalisation at operations and corporate level – strong operational performance through production optimisation – deleveraging the balance sheet – remaining positioned to take advantage of the future uranium price r
Slide 20: Conclusion
Conclusion Funding plan in place to deal with $300 million 2015 CB maturity, while providing sufficient cash surplus for coming years Paladin positioned to meet expanded production target when incentive pricing is sufficient Focused on further cost rationalisation and production optimisation Focus w
Slide 21: Presentation Outline
Presentation Outline Recapitalisation Overview Uranium Market Update Key Investment Highlights Outlook And Conclusion Key Risks Foreign Selling Restrictions NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES 20
Slide 22: Key risks
Key risks There are various risks and uncertainties attached to an investment in Paladin, which may affect the future operating and financial performance of Paladin and the market value of Paladin shares. Shareholders should note that many of these risks are partially or completely outside the contr
Slide 23: Key risks (cont’d)
Key risks (cont’d) General operational risks (cont’d) • Paladin’s mining operations may be affected by the following (amongst other things): weather/natural disasters and other force majeure events; unexpected maintenance or technical problems; unplanned capital expenditure; variations in geological
Slide 24: Key risks (cont’d)
Key risks (cont’d) Securing financing for development of Paladin’s projects • In the ordinary course of operations and development, Paladin is required to issue financial assurances, including insurances and bond/bank guarantee instruments, to secure statutory and environmental performance undertaki
Slide 25: Key risks (cont’d)
Key risks (cont’d) Exploration and project development/expansion risks (cont’d) • Several of the projects in which Paladin has an interest are currently either in exploration or development stage, or are undergoing expansion. Uranium exploration and mine development generally involves a high degree
Slide 26: Key risks (cont’d)
Key risks (cont’d) Changes in capital and operating cost estimates • Whilst every care has been made in estimating the capital cost and future operating costs for Paladin’s projects, including contingency, the actual cost structure experienced in constructing facilities and operating mines or proces
Slide 27: Key risks (cont’d)
Key risks (cont’d) Environmental and social risk • Uranium exploration and mine development is an environmentally hazardous activity which may give rise to substantial costs for environmental rehabilitation, damage control and losses. With increasingly heightened government and public sensitivity to
Slide 28: Key risks (cont’d)
Key risks (cont’d) Insurance • Paladin seeks to maintain a range of insurance covers for business operations. However, Paladin’s insurance will not cover every potential risk associated with its operations. The occurrence of a significant adverse event, the risks of which are not fully covered by in
Slide 29: Key risks (cont’d)
Key risks (cont’d) General risks associated with investment in equity capital • There are general risks associated with investments in equity capital. The trading price of shares in Paladin is subject to the uncertainty of equity market conditions and may fluctuate with movements in equity capital m
Slide 30: Presentation Outline
Presentation Outline Recapitalisation Overview Uranium Market Update Key Investment Highlights Outlook And Conclusion Key Risks Foreign Selling Restrictions NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES 29
Slide 31: Foreign selling restrictions
Foreign selling restrictions International Offer Restrictions This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may n
Slide 32: Foreign selling restrictions (cont’d)
Foreign selling restrictions (cont’d) Ontario (cont’d) A purchaser who purchases securities offered by the offering memorandum during the period of distribution has, without regard to whether the purchaser relied upon the misrepresentation, a statutory right of action for damages or, alternatively,
Slide 33: Foreign selling restrictions (cont’d)
Foreign selling restrictions (cont’d) General The foregoing summary is subject to the express provisions of the securities legislation of the applicable provinces and the rules, regulations and other instruments thereunder, and reference should be made to the complete text of such provisions. Such p
Slide 34: Foreign selling restrictions (cont’d)
Foreign selling restrictions (cont’d) Norway This document has not been approved by, or registered with, any Norwegian securities regulator under the Norwegian Securities Trading Act of 29 June 2007. Accordingly, this document shall not be deemed to constitute an offer to the public in Norway within
Slide 35: Foreign selling restrictions (cont’d)
Foreign selling restrictions (cont’d) United Kingdom Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Ser
Slide 36: 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 Te
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