Shares in Paladin Energy slid yesterday after the uranium
miner again disappointed the market with a shortfall on
guidance.
Paladin told the market that it had missed production targets
yet again and had been forced to reduce its annual production
targets.
The shares eased 3c to $1.775 by the close yesterday.
The company told the ASX that uranium production at its
flagship Langer Heinrich mine (in Namibia) was 10% below the
company's target during the first three months of 2012, while its
secondary mine also missed its production targets.
Paladin has earned a reputation in the past for missing
targets, and the company blamed the latest poor result at Langer
Heinrich on bottlenecks.
"This shortfall was mainly due to early quarter commissioning
bottlenecks and the planned lower grade feed in line with the
mine plan. These bottleneck issues have now been rectified," the
company said in a statement.
Problems at the secondary mine, Kayelekera (in Mali), were
blamed on a new chemical reagent, which was being trialled as
part of Paladin's cost-cutting drive.
"Production for the quarter was slightly
down on target at both sites. At Kayelekera, a new reagent, which
has potentially significant cost savings, was tested with
negative results.
"This test resulted in approximately a 40,000lb loss of
production at Kayelekera. At Langer Heinrich, early quarter
issues with ramping up the additional CCD circuit caused delays,
as did the tailings thickener.
"For the reasons outlined, Paladin now expects FY12 production
to be about 2% below the previously announced lower guidance of
7.1Mlb," the company said yesterday.
The previous target was itself a reduced figure from original
estimates.
Overall production for the first quarter of 2012 was 1.77
million pounds, down 2.6% from the level in the December
quarter.
"Langer Heinrich produced 1,052,364lb U3O8 (uranium oxide),
10% short of internal target for the quarter. Over a 6- month
period, 86% of Stage 3 design capacity achieved. - crushed
680,369 tonnes (t) of ore, an all-time record and an increase of
8% from the previous quarter.
" Kayelekera delivered a record 724,551lb U3O8, a 15% increase
over the previous quarter and 88% of nameplate," the company
said.
The company said it made sales of 1,137,477 pounds of uranium
oxide at average price of US$59.17/lb, worth around $US67.3
million.
The 40,000 pounds of loss of production at the Kayelekera mine
was worth around $US2.3 million at the average price.
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