Paladin Energy Ltd · ASX:PDN
Paladin Energy — Investor Presentation (April 2012)
39 slides from Paladin Energy's investor presentation, April 2012
Slide 1: Investor Presentation
Investor Presentation April 2012
Slide 2: Important Information
Important Information In addition to historical information contained in this presentation, this presentation contains forward-looking statements and forward-looking information within the meaning of securities laws of applicable jurisdictions. Such forward-looking statements and forward-looking inf
Slide 3: Notes for JORC and NI 43-101 Mineral Resources and Ore Reserves
Notes for JORC and NI 43-101 Mineral Resources and Ore Reserves In the following presentation, for those deposits that are reported as conforming to the Joint Ore Reserves Committee (JORC) 2004 code, the terms Inferred Mineral Resources, Indicated Mineral Resources, Measured Mineral Resources, Ore R
Slide 4: Presentation Outline
Presentation Outline Paladin Overview March 2012 Quarterly Report Key Investment Highlights Uranium Outlook Projects Summary Annexure 3
Slide 5: Paladin Energy Ltd
Paladin Energy Ltd Listed on Australian (ASX), Toronto (TSX) and Namibian (NSX) Stock Exchanges Market Cap: A$1.42 billion (US$1.48 billion)1 Cash at Hand: US$126.9 million (31 December 2011) Issued Capital: 835.6 million shares2 — US$325 million Convertible Bonds due March 2013 — US$300 million Con
Slide 6: Globally Significant Asset Base
Globally Significant Asset Base Actively developing in the world’s premier uranium regions Assets in Production 5
Slide 7: Key Investment Highlights
Key Investment Highlights Unique Competitive Sole independent pure play uranium developer and Position producer globally Two operating uranium mines brought into production in Strong Growth two years, delivering year-on-year production growth Underpinned by Langer Heinrich Mine (LHM) – alkaline leac
Slide 8: Presentation Outline
Presentation Outline Paladin Overview March 2012 Quarterly Report Key Investment Highlights Uranium Outlook Projects Summary Annexure 7
Slide 9: Company Highlights
Company Highlights March 2012 Quarter Project ramp up complete and operating near nameplate capacity Projects nearing nameplate capacity Solid Production Production of 1.77Mlb U3O8, in March 2012 quarter Slight decrease of 2.6% on December 2011 quarter December 2011 half year sales volume of 3.320Ml
Slide 10: Balance Sheet Update
Balance Sheet Update Secured bank loans — covenants are market standard with coverage ratios at achievable levels — US$141M project finance facility for the reimbursement of funds committed to the Langer Heinrich Stage 3 expansion and refinance of Stage 1 facility (US$24.8M) US$130M remains outsta
Slide 11: Presentation Outline
Presentation Outline Paladin Overview March 2012 Quarterly Report Key Investment Highlights Uranium Outlook Projects Summary Annexure 10
Slide 12: Tier-1 Uranium Company
Tier-1 Uranium Company As an independent and established uranium producer, Paladin is uniquely positioned within the consolidating nuclear industry Tier I Cameco, Areva, KazAtomProm, Rio Tinto, ERA, ARMZ, ~90% of 2010 mine production from Companies Uranium One, Navoi, BHP and Paladin top 10 producer
Slide 13: Paladin - Rapid Development Progress
Paladin - Rapid Development Progress Designed with Vision Paladin has successfully built 2 mines & completed 2 expansions Paladin has invested $1.5B in its project pipeline LHM Construction LHM Production KM Construction KM Production Average Michelin Exploration Discovery Fusion Niger Cost 66c/lb A
Slide 14: Pivotal Point in Corporate Development - Entering the Next Phase
Pivotal Point in Corporate Development - Entering the Next Phase Achieved Rapid growth phase complete Producing Assets Near Nameplate LHM and KM both at or near nameplate Significant increase in resources from 2005 Established Pipeline Strong new mine potential Build experienced and proven technical
Slide 15: Strong Growth – Delivered and Anticipated
Strong Growth – Delivered and Anticipated Development & Consolidation & Expected Growth Growth Optimisation (in feasibility) Development / Ramp-up Cost Optimisation Growth (Price Dependent) Current installed capacity 8.5Mlb Development +Ramp Up 24% 70% 59% Refer to the “Important Information” on Sli
Slide 16: Project Pipeline
Project Pipeline M&A Long-term Growth Database utilisation | New Project Acquisitions e Angela _— e Valhalla w e Niger e Oobagooma Kayelekera optimisation Mid-term Growth e Michelin e Manyingee Langer Heinrich Stage 4 “(Langer Heinrich Stage 3 Paladin Attributable Mineral Resources expansion Measure
Slide 17: Intellectual Property
Intellectual Property Ability to advance projects through to production using technology and innovation Unique mine development capability: — Only company to bring new conventional mines into production in the last 20 years. Track record of innovation: — Langer Heinrich: first conventional uranium m
Slide 18: Presentation Outline
Presentation Outline Introduction Paladin Status Update Recent Results Highlights Uranium Outlook Projects Summary Annexure 17
Slide 19: Demand Outlook
Demand Outlook Post-Fukushima Demand Outlook Reactors Uranium Reactors Under Reactors Reactors Requirement Operable Construction Planned Proposed (tonnes U) Mar-11 443 62 158 324 68,971 Mar-12 435 61 162 329 67,990 Difference (8) (1) 4 5 (981) Source: WNA 18
Slide 20: Uranium Supply / Demand Balance
Uranium Supply / Demand Balance Demand – long term fundamentals essentially unchanged post Fukushima Despite Fukushima, demand from the nuclear generation industry remains strong — continuation of Chinese, Korean and Indian programs — robust approach by Russian government — new programs in the Middl
Slide 21: Supply Misunderstood
Supply Misunderstood Industry has systematically overestimated production: Source WNA 20
Slide 22: Supply Growth Difficulty
Supply Growth Difficulty Uranium supply — there is a likely supply deficit in the near to medium term — mining – in particular uranium – is a high risk business and risk/reward benefit needs rebalancing to ensure long term supply — current prices will not • incentivise new supply • guarantee continu
Slide 23: Uranium Prices
Uranium Prices Fukushima effect continues to work through uranium market UxC spot price has remained circa US$52/lb since September 2011 Term prices have not declined below US$60/lb 22
Slide 24: Presentation Outline
Presentation Outline Introduction Paladin Status Update Recent Results Highlights Uranium Outlook Projects Summary Annexure 23
Slide 25: Langer Heinrich Project Overview
Langer Heinrich Project Overview Location: west coast of central Namibia, 80km E of Walvis Bay (port) and 200km W of Windhoek Infrastructure: road, grid power, water, skilled labour, port Ownership: 100% Fiscal: tax 37.5%; royalty 3% of gross revenues; depreciation over three years Processing: crush
Slide 26: Langer Heinrich Project Overview (cont’d)
Langer Heinrich Project Overview (cont’d) Three successful production capacity Design Criteria Stage 2 Stage 3 expansions: Ore Throughput 2.5Mt/a 3.5Mt/a — 2.6Mlb (Stage 1) - 2008 Leach 1.5Mt/a 2.1Mt/a — 3.7Mlb (Stage 2) - late 2009 Throughput — 5.2Mlb (Stage 3) - current Ore Feed Grade 850ppm 800pp
Slide 27: Langer Heinrich: Staged Growth and Operational Update
Langer Heinrich: Staged Growth and Operational Update Staged Growth Progress Stage 1 – Alkaline leach, start-up Jan 2007 Nearing Stage 3 nameplate of 5.2Mlb pa — design 2.6Mlb pa 9 — March 2012 quarter production of 1.052Mlb — production for CY2011 of 3.73lb Stage 2 – Full 7 months of nameplate prod
Slide 28: Langer Heinrich: Operational Update
Langer Heinrich: Operational Update March 2012 quarterly production of 1.052Mlb U₃O₈ — 81% of Stage 3 nameplate — plant throughput increased by 8% on December 2011 quarter — feed grade reduced by 17% to 850ppm, nearing Stage 3 design of 800ppm — leach recovery up to 91% due to ongoing success with n
Slide 29: Kayelekera Project Overview
Kayelekera Project Overview Location: northern Malawi, 575km north of Lilongwe (capital), 52km west of Karonga Infrastructure: road, power (diesel gensets), water Ownership: 85%/15% Paladin/Malawi Govt Fiscal: tax 27.5%; royalty 1.5% of gross revenues for 3 years, 3% thereafter; depreciation 100% or
Slide 30: Kayelekera Project Overview (cont’d)
Kayelekera Project Overview (cont’d) Production capacity of 3.3Mlb U3O8 pa Design Criteria Project ramp-up complete and running near Ore Throughput 1.5Mt/a nameplate Leach Throughput 1.5Mt/a — plant upgrades completed Aug 2011 Ore Feed Grade 1100ppm — record March 2012 quarter production of Recovery
Slide 31: Kayelekera: Operational update
Kayelekera: Operational update Record production March 2012 quarter 0.725Mlb U₃O₈ — 15% increase over December 2011 quarter — 88% of nameplate capacity Phase II upgrade underway in RIP — part of original $11M upgrade budget — RIP and elution optimisation focus Focused cost optimisation programme und
Slide 32: Key Pipeline Projects (Progressing)
Key Pipeline Projects (Progressing) Manyingee ISR Project, Western Australia low-cost ISR project targeting 2Mlb U3O8 production pa — existing mining lease — Paladin has the expertise to develop Manyingee Advanced Exploration 2016-2017 development target — resource confirmation drilling expected to
Slide 33: Presentation Outline
Presentation Outline Introduction Paladin Status Update Recent Results Highlights Uranium Outlook Projects Summary Annexure 32
Slide 34: A Solid Platform
A Solid Platform Paladin’s premium for strategic value is based on four key drivers: A portfolio of early-life Unique industry position cycle, technologically as the only significant advanced, mining non-aligned pure play operations Producing Industry producer Mines Position A geographically Proven
Slide 35: A Strong Case for New Strategic Possibilities
A Strong Case for New Strategic Possibilities Overall, very real opportunities exist to effectively leverage Paladin’s highly significant asset base in current strategic negotiations. ELEMENTS Paladin provides significant collateral value for which strategic parties in the nuclear industry are showi
Slide 36: Key Takeaways
Key Takeaways Outlook — step change to nameplate production achieved — site cost and production optimisation and corporate overhead reduction underway — minority joint venturing on Australian projects progressing well — maintaining strong organic growth profile — the transaction that is contemplated
Slide 37: Presentation Outline
Presentation Outline Introduction Paladin Status Update Recent Results Highlights Uranium Outlook Projects Summary Annexures 36
Slide 38: 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
Slide 39: Ore Reserves and Mineral Resources
Ore Reserves and Mineral Resources Project Measured Mineral Resources Indicated Mineral Resources Inferred Mineral Resources Measured Mineral Resources Attributable to Paladin Attributable to Paladin Attributable to Paladin in ROM stockpiles Attributable to Paladin Cut-off U3O8 Mlb % Mlb Mlb Mlb ppm