Paladin Energy Ltd · ASX:PDN
Paladin Energy — Investor Presentation (March 2021)
68 slides from Paladin Energy's investor presentation, Mar 17, 2021
Slide 1: Paladin Equity Raising Presentation
PALADIN lan Purdy Chief Executive Officer Anna Sudlow Chief Financial Officer
Slide 2: Important notice and disclaimer
PALADIN IMPORTANT: You must read the following before continuing, This presentation Presentation) has been prepared by Paladin Energy Ltd ACN 061 681 098 PDN or the Company) and is dated 17 March 2021. Summary information The following notice and disclaimer applies to this Presentation. You are advi
Slide 3: Important notice and disclaimer (continued)
PALADIN The release, publication or distribution of this Presentation (including an electronic copy) outside Australia may be restricted by law. If you come into possession of this Presentation, you should observe such restrictions and should seek your own advice on such restrictions. Any non-compli
Slide 4: Future performance
PALADIN Future performance This Presentation contains certain “forward looking statements" which involve subjective judgment and analysis and are subject to significant uncertainties, risks and contingencies including those risk factors, associated with the mining industry, many of which are outside
Slide 5: Disclaimer
PALADIN Disclaimer The Joint Lead Managers and the advisers to the Company listed in the accompanying ASX announcement, together with each of their respective related bodies corporate, shareholders or affiliates and each of their (and their related bodies corporate, shareholders' or affiliates’) res
Slide 6: Competent persons statement
PALADIN Competent persons statement The information contained in this Presentation relating to Mineral Resources is, except where stated, based on, and fairly represents, information and supporting documentation compiled by David Princep B.Sc P.Geo FAusIMMICP) who is an independent consultant and wh
Slide 7: Table of contents
Table of contents Section 1 ion o Section 4 Section 5 Section 6 Section 7 Section 8 Section 9 Equity Raising Overview Langer Heinrich Mine Exploration Why Uranium? Paladin Investment Conclusion About Paladin Key Risks & ae Foreign Offer Restrictions Ser Summary of Underwriting Agreement
Slide 8: Transforming Paladin
Transforming Paladin Renewed Board and Executive Management Team + Technical and commercial skill sets necessary to lead Paladin going forward + Proven technical and operational expertise derived from extensive global experience + New team reduced ongoing expenditure levels by approximately 40% duri
Slide 9: Proven 10-year track record of uranium production from Langer Heinrich
PALADIN Proven 10-year track record of Uranium production from Langer Heinrich with 43Mlb of U3Og delivered to customers Current valid Mining License and Environmental Clearance Certificate permit the resumption of mining, processing and Uranium exports! at Langer Heinrich Long-life operation with c
Slide 10: Equity Raising Overview
Equity Raising Overview
Slide 11: Equity raise to reset capital structure
Equity raise to reset capital st _ PALADIN + Fully underwritten Equity Raise of AS218.7m, consisting of a A$128.5m institutional placement and a A$90.2m, 1 for 8.5 accelerated pro-rata non-renounceable entitlement offer (Equity Raise) + Proceeds from the Equity Raise will be applied to a full redemp
Slide 12: Sources & uses of funds
Sources & uses of funds Transaction sources of funds USSM | asm Pro-Forma Capitalisati Total Equity Raise proceeds? 168.4 218.7 Shares on issue 2.663B icet Transaction uses of funds USSM | asm Share price? AS 46.5¢ . . Market capitalisation? AS 1.24B Estimated repayment of Senior Notes, ~ 160.3 ~ 20
Slide 13: Provides ability to restart Langer Heinrich with prudent debt levels
Provides ability to restart Langer Heinrich with prudent debt levels Stops the value transfer from equity holders to debt holders through the high ‘Payment In Kind’ coupon interest rate of 10% Delivers optionality on future funding structures for the US$81M of capital required to restart Langer Hein
Slide 14: Uranium marketing position strengthened by reset of capital structure
Uranium marketing position strengthened by reset of capital structure Delivers financial confidence to new and returning customers that Paladin has a clear pathway to achieving restart funding Stronger financial position, coupled with our known product specifications, positions Paladin as an attract
Slide 15: Equity raise details
Equity raise details PALADIN Offer structure Offer price Institutional Entitlement Offer and Placement Retail Entitlement Offer? Director participation A$218.7m fully underwritten Equity Raise comprising: + A$128.5m institutional placement (Placement! + A$90.2m 1 for 8.5? accelerated pro-rata non-re
Slide 16: Equity raise timetable
PALADIN Announcement of Equity Raise, Institutional Entitlement Offer and Placement opens Wednesday, 17 March 2021 Institutional Entitlement Offer and Placement closes Thursday, 18 March 2021 Announce completion of the Placement and Institutional Entitlement Offer Friday, 19 March 2021 Trading halt
Slide 17: Langer Heinrich Mine
Section 2 Langer Heinrich Mine
Slide 18: Namibia — a premier uranium jurisdiction
Namibia — a premier Uranium jurisdiction * PALADIN Mine Langer Heinrich I NAMIBIA a BOTSWANA REPUBLIC OF ‘SOUTH AFRICA Globally significant Uranium province (Husab, Rossing and Langer Heinrich) and a major supplier of the world’s Uranium when at full capacity Uranium has been produced in Namibia sin
Slide 19: Langer Heinrich's proven production track record
Langer Heinrich’s proven production track record * PALADIN Paladin owns 75% of Langer Heinrich with 25% owned by CNNC Overseas Uranium Holdings Limited! First production from Langer Heinrich in 2007 with peak production of 5.6Mlbs in 2014 before operations suspended due to low Uranium prices in 2018
Slide 20: Langer Heinrich's proven uranium product
Langer Heinrich’s proven Uranium product + A43Mlb U3O0g successfully marketed over 10 years * Delivered product aligned to feedstock specifications of global UF, conversion facilities operated by Cameco, Honeywell, Orano and CNNC + Langer Heinrich established a reliable track record of delivery to c
Slide 21: Cost to Restart
Cost to Restart Operations Life of Mine C1 Cost of Production Restart Capital Intensity? ao en wey 0. 2 100% Ba: Peak Production PALADIN
Slide 22: Ramp up, mining and stockpile phases
PALADIN Ramp Up Mining Phase Stockpile Phase fi if i US$81M of pre-production capex 7 : : + 700 : i i * Operational Readiness (US$34M): 4 1 _.-. : E soo Working capital and other cash j | \ne 1 expenditure to restart baseline os 4 : _ operations g / F 4 + Discretionary capital (US$47M): 54 { 400 Tar
Slide 23: Continuing to optimise and de-risk the Mine Restart Plan
Continuing to optimise and de-risk the Mine Restart Plan The critical-path elements of the Langer Heinrich Mine Restart Plan’ are progressing well, underpinning and improving on the previous study outcomes, including: + Geo-metallurgical analysis complete + Mineral Resource Model complete + Pit desi
Slide 24: Exploration
Section 3 Exploration
Slide 25: Exploration projects: Michelin, Mount Isa, Manyingee
PALADIN Mineral Resource (M+l+1): 127.7Mlb at 860 ppm US$75M of total historical in ground exploration Potential for ~6Mlbpa open cut and underground mine Mineral Resource (M+l+1): 148.4Mlb at 680 ppm USS$55M of historical in ground exploration Potential for 5-7Mlbpa open cut mine Mineral Resource (
Slide 26: Globally significant high average grade exploration portfolio
PALADIN @ Globally significant high average grade exploration portfolio Exploration Projects Mineral Resources?2 203Mt at 710ppm U30, for 317.6Mlb lk Low holding costs across the portfolio with long duration Z exploration licenses K Extensive historical exploration activity has seen over US$140m ‘sp
Slide 27: Why Uranium?
Why Uranium?
Slide 28: Structural supply deficit with growing demand
Structural supply deficit with growing dem PALADIN World Nuclear Association - Supply Shortage Tonnes U 125,000 100,000 75,000 — 50,000 WA inii Il 0 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 Secondary Supplies (Group 1) Planned Mines Restarted Idled Capacity — Reactor Requirements,
Slide 29: Future contracted coverage rates of US & European utilities
Future Contracted Coverage Rates of US & European Utilities Contract coverage % of total requirements 120% 100% =~ 80% 60% 40% 20% 0% 2020 2021 2022 2023 2024 2025 2026 2027 2028 ~ European Utilities Coverage 2019 (Euratom) ——US Utilities Coverage 2019 (EIA) US Utilities Coverage 2020 (UxC) + US con
Slide 30: Paladin Investment Conclusion
Paladin Investment Conclusion
Slide 31: What does it mean for Paladin?
What does it mean for Paladin? Strong operational track record + Proven track record with 10 years of production + 43Mlb of U30g successfully marketed product + Langer Heinrich extensive care & maintenance activities ensures operational readiness + Mine Restart Plan pathway maximises operational run
Slide 32: About Paladin
About Paladin
Slide 33: Our ESG commitment
Our ESG commitment Paladin is committed to the core principle of delivering value through sustainable development. Our Paladin Values support every decision we take. With these strong foundations, we can focus on achieving economic, social and environmental sustainability in balanced and successful
Slide 34: Meet the Board and CEO
Meet the Board and CEO Non-Executive Chairman Non-Executive Director Non-Executive Director Chief Executive Officer Mining executive with deep Mining and finance professional with : Chemical engineer with extensive expertise in the minerals and energy : extensive experience of the financial | experi
Slide 35: The Executive Team
The Executive Team | Chief Financial Officer Corporate finance professional with 25 years’ experience across : the energy and resources sectors : in senior management roles. Her ! experience includes funding ' execution, commercial i management, accounting, finance and treasury in both the ASX liste
Slide 36: Langer Heinrich Mine historical performance parameters
Langer Heinrich Mine historical performance parameters FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 Mining Rate (in-situ) Mt 27.8 21.6 20.2 24.6 7.6 0.0 Mill Throughput Mt 3.44 3.72 3.40 3.57 3.52 2.95 Mill Feed Grade ppm 812 783 768 699 610 475 Recovery % 86.0% 87.0% 87.6% 86.3% 87.7% 88.5% U30g Produ
Slide 37: Mineral Resources Table — Langer Heinrich
Mineral Resources Table — Langer Heinrich PALADIN Mlb U;O, Mlb U,O, Mlb U,O, Mlb U,0, | Paladin Uranium Mineral Resources! Grade (100% Grade (100% (100% (100% | Ownership 250ppm U;0, cutoff Mt m U30g, basis) Mt ppm U;0, basis) basis) basis) (%) In-situ 66.2 490 719 18.8 435, 18.0 6.3 420 5.8 AS 475
Slide 38: Mineral Resources Table - Canadian Exploration portfolio
Mineral Resources Table - Canadian Exploration portfolio “_..? PALADIN Mlb Us\ Mineral Resources rade ppm U3Os (100% bi Measured Michelin’ 17.6 965 37.6 60 Rainbow" 0.2 920 0.4 60 Indicated Gear? 0.4 770 0.6 60 Inda? 1.2 690 1.8 60 Jacques Lake! 13.0 630 18.0 60 Michelin! 20.6 980 44.6 60 Nash? 0.7
Slide 39: Mineral Resources Table - Australian Exploration portfolio
PALADIN Measured Valhalla’ 16.0 820 28.9 100 Indicated Andersons” 14 1,450 4.6 100 Bikini? 5.8 495 6.3 100 Duke Batman? 0.5 1,370 1.6 100 Odin? 8.2 555 10.0 100 Skalé 14.3 640 20.2 100 Valhalla! 18.6 840 34.5 100 Carley Bore” 5.4 420 5.0 100 Manyingee® 8.4 850 15.7 100 Inferred Andersons” 04 1,640 0
Slide 40: Key Risks
Key Risks
Slide 41: Key risks: Introduction and uranium prices
PALADIN Introduction This section describes the key business risks of investing in Paladin together with the risks relating to participation in the Equity Raise which may affect the value of Paladin shares. It does not describe all the risks of an investment. Investors should consult their own profe
Slide 42: Production and cost estimate risks
PALADIN If operations at the LHM are successfully commenced, the Company's ability to achieve production, development, operating cost and capital expenditure estimates on a timely basis cannot be assured. Further, the Company does not expect to have any material revenues from its mining assets until
Slide 43: Resource and exploration risks
PALADIN Due to the uncertainty which may attach to inferred Mineral Resources, there is no assurance that inferred Mineral Resources will be upgraded to measured or indicated Mineral Resources or proven or probable Ore Reserves as a result of continued exploration. Speculative nature of mineral expl
Slide 44: Environmental and country risks
PALADIN White it is possible that costs and delays associated with compliance with such laws, regulations and permits could become such that the Company will not proceed with the development or operation of a mine, the Company is not aware of any material environmental constraint affecting its propo
Slide 45: Exchange rates
PALADIN Exchange rates The Company has outstanding Senior Notes on issue denominated in US dollars. The Company intends to use the proceeds from the Equity Raise to repay all amounts owing by the Company under these Senior Notes, as well as to pay transaction fees and costs associated with the Equit
Slide 46: Effect of COVID-19
PALADIN Effect of COVID-19 The Company is subject to the risk that the COVID-19 pandemic will have a material adverse effect on, or cause a material adverse change to, the mining industry as a whole with resulting material adverse impacts on Paladin’s business and financial performance. COVID-19 is
Slide 47: Joint venture risks
PALADIN Where projects and operations are controlled and managed by joint venture participants other than the Company, the Company may provide expertise and advice but it has limited control with respect to compliance with its standards and objectives. Improper management or ineffective policies, pr
Slide 48: Operating risks
PALADIN The Company's activities may be affected by numerous other factors beyond the Company's control, Mechanical failure of the Company's operating plant and equipment and general unanticipated operational and technical difficulties may adversely affect the Company's operations. Operating risks b
Slide 49: Offtake risk
PALADIN Offtake risk The operations and revenues of Paladin are dependent on the counterparties to existing and future offtake agreements performing their obligations. If counterparties do not take their obligated quantities of product or seek to renegotiate the price or quantity of product, Paladin
Slide 50: Reliance on key personnel
PALADIN Reliance on key personnel Retaining qualified personnel is critical to the Company's success. The Company may face risks from the loss of key personnel, as it may be difficult to secure and retain candidates with appropriate experience and expertise. One or more of the Company's key employee
Slide 51: Health and safety
PALADIN Health and safety Itis Paladin's intention to conduct its activities to the highest standards of occupational health and safety. Paladin has systems in place for the management of risks, however uranium exploration and mining is inherently a high risk environment with little margin for error
Slide 52: Legal action
PALADIN Legal action The Company is subject to litigation risks. All industries, including the mining industry, are subject to legal claims, which claims may be with or without merit. Defence and settlement costs of legal claims can be substantial, even with respect to claims that have no merit. Due
Slide 53: Government policy and native title risks
PALADIN Through membership of industry bodies, such as the Minerals Council of Australia, the Company is involved in initiatives focused on facilitating government support. There can be no assurance that State or Territory governments that currently permit uranium mining will continue to do so, or t
Slide 54: Sale of interest in Kayelekera uranium mine
PALADIN Sale of interest in Kayelekera uranium mine The Company completed the sale of its 85% interest in Paladin (Africa) Ltd, the entity that owns the Kayelekera uranium mine in Malawi, to ASX-listed company Lotus Resources Ltd (ASX:LOT) (Lotus) in March 2020. Under the sale arrangements, Paladin
Slide 55: General economic conditions
PALADIN General economic conditions Economic conditions, both domestic and global, may affect the performance of the Company. Adverse changes in macroeconomic conditions, including global and country-by-country economic growth, the cost and general availability of credit, the level of inflation, int
Slide 56: Offer and general risks
PALADIN 2. Offer and general risks Equity raise risk The Company has entered into an underwriting agreement with the Joint Lead Managers Underwriting Agreement), pursuant to which the Joint Lead Managers have agreed to underwrite the Equity Raise on the terms and conditions of the Underwriting Agree
Slide 57: General investment risks
PALADIN General investment risks As with all stock market investments, there are risks associated with an investment in Paladin. The trading price of the Company's shares may fluctuate with movements in equity capital markets in Australia and internationally, and may also be influenced by a number o
Slide 58: Tax and cyber security risks
PALADIN Paladin operates in Australia, Canada and Namibia and is subject to review by the relevant tax authorities. Future changes in the relevant taxation laws, including changes in interpretation or application of the laws by the respective courts or taxation authorities of Australia, Canada and N
Slide 59: Foreign Offer Restrictions
Foreign Offer Restrictions
Slide 60: Foreign offer restrictions
PALADIN This Presentation does not constitute an offer of New Shares in any jurisdiction in which it would be unlawful. In particular, this Presentation may not be distributed to any person, and the New Shares may not be offered or sold, in any country outside Australia except to the extent permitte
Slide 61: European Union and Hong Kong
PALADIN European Union This document has not been, and will not be, registered with or approved by any securities regulator in the European Union. Accordingly, this document may not be made available, nor may the New Shares be offered for salen the European Union exceptin crcumstances that do not re
Slide 62: New Zealand and Norway
PALADIN Other than in the entitlement offer, the New Shares may only be offered or sold in New Zealand (or allotted with a view to being offered for sale in New Zealand) to a person who: + Isan investment business within the meaning of clause 37 of Schedule 1 of the FMC Act; + Meets the investment a
Slide 63: United Kingdom
PALADIN United Kingdom Neither 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 Services and Markets Act 2000, as amended (FSMA)) ha
Slide 64: Summary of Underwriting Agreement
Summary of Underwriting Agreement
Slide 65: Summary of Underwriting Agreement
Summary of Underwriting Agreement Overview Joint Lead Managers’ Obligations The Equity Raise will be fully underwritten by Canaccord Genuity (Australia) Limited (Canaccord) and Shaw and Partners Limited (Shaws) (together the Joint Lead Managers) on the terms and conditions set out in an underwriting
Slide 66: Summary of Underwriting Agreement: termination events
Summary of Underwriting Agreement “_..? PALADIN * The Joint Lead Managers have the ability to terminate their obligations under the Underwriting Agreement if certain events occur. If the Underwriting Agreement is terminated by the Joint Lead Managers, the Joint Lead Managers are not obliged to perfo
Slide 67: Summary of Underwriting Agreement: termination events (2/2)
Summary of Underwriting Agreement “_..? PALADIN * In addition to the above, some termination events will depend on whether the Joint Lead Managers have reasonable grounds to believe that the relevant event has or could be reasonably expected to have a material adverse effect on the success, settleme
Slide 68: Paladin: Clean energy. Clear future.
‘PALADIN Clean energy. Clear future. Level 4 502 Hay Street Subiaco WA 6008 +618 9423 8100 paladin@paladinenergy.com.au paladinenergy.com.au