With realisation of the acid recycling and grid power initiatives at KM, significant further cost reductions are expected at this site.
PRODUCTION GUIDANCE FY13 and FORECAST for FY14
The combined operations achieved a total production of 8.255Mlb for FY13, which was well within the stated guidance range of 8.0 to 8.5Mlb U3O8.
Combined production guidance for FY14 is forecast to be 8.3 to 8.7Mlb U3O8.
AURORA - MICHELIN URANIUM PROJECT, Canada (100%)
Work is now substantially complete on an updated mineral resource estimate for the Michelin deposit. Final Quality Analysis/Quality Control and peer review of the mineral resource is now underway and announcement of the results is expected in the next quarter.
Preparation for the upcoming summer exploration programme is ongoing.
ANGELA PROJECT, Australia (Paladin 100%)
With Paladin becoming the sole owner of the Angela project following the completion of an agreement to purchase the 50% interest previously held by Cameco Australia Pty Ltd, the Company gained an additional 15.4Mlb U3O8 to its attributable mineral resource base.
The Angela-Pamela sandstone uranium deposits are located 25km south of Alice Springs in the Northern Territory. The deposit contains an Inferred mineral resource of 30.8Mlb (10.7Mt) U3O8 at an average grade of 1,310ppm U3O8 at a 300ppm cut-off grade. The mineral resource was estimated by Paladin in 2010/11, reported in 2011, and is in compliance with both the NI 43-101 and JORC guidelines.
MANYINGEE PROJECT, Australia (100%)
Work at Manyingee concentrated on updating the geological model to provide input into an updated mineral resource estimate. Water sampling was undertaken to obtain baseline data and hydrogeological modelling was commenced in support of an application for a future Field Leach Trial.
Preliminary metallurgical test results indicate that an alkaline leach solution under six bars of oxygen pressure (approximately equivalent to the depth of the ore body under the water table) will leach up to 90% of the contained uranium.
Terrorist attacks on the Areva mining operations at Arlit and in the nearby town of Agadez in Niger have halted the Company's planned activities on its nearby exploration properties. Paladin is currently in discussion with the relevant Niger authorities and has applied for a Force Majeure consideration so it can halt expenditure until the security situation improves.
STRATEGIC INITIATIVE EFFORTS
In June, Paladin advised that the strategic initiative outcome expected to be finalised at the end of June has been delayed until mid to late August. Advanced negotiations have been ongoing regarding finalising a minority equity position in the Company's flagship Langer Heinrich Mine in Namibia.
The Company is confident a sale will be successfully achieved; however, a revised bid from one of the parties requires reconsideration and the approval process will be extended. Paladin believes it is in its best interest to accommodate this and, as such, finalisation of the transaction moved into the September quarter.
URANIUM MARKET COMMENTS
The Ux spot price moved in a narrow range during the quarter from a high of US$42.25/lb U3O8 in April before softening to $39.65/lb U3O8 in June. The Ux term price rose by US$1/lb to US$57.00/lb U3O8 for the quarter.
The recent weakness in uranium prices is partially attributable to uncertainty surrounding the timetable for reactor re-starts in Japan where 48 out of 50 operable nuclear power plants have been offline since the Fukushima events of March 2011.
On July 8 the independent Nuclear Regulation Authority of Japan (NRA) promulgated new safety reassessment standards to apply to all nuclear power plants in Japan. Four utilities subsequently applied to re-start 10 idled plants as soon as inspections can be undertaken and national and local government approvals obtained, which might be as soon as early 2014. The re-start plan for the remaining plants is still not certain, although the national government has adopted a pro-nuclear policy and is known to support returning as many plants as possible to service once they comply with the NRA standards.
On May 28 construction formally began on Barakah-2, a 1345MWe Pressurised Water Reactor being built for Emirates Nuclear Energy Corporation in the United Arab Emirates, which joins its twin, Barakah-1, which began construction in July 2012. Worldwide, there are now 68 nuclear power plants under construction, six more than at the time of the Fukushima events.
The information in this Announcement relating to exploration and mineral resources is, except where stated, based on information compiled by David Princep B.Sc who is a Fellow of the AusIMM. Mr Princep has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves", and as a Qualified Person as defined in NI 43-101. Mr Princep is a full-time employee of Paladin Energy Ltd and consents to the inclusion of this information in the form and context in which it appears.
ACN 061 681 098
Paladin Energy Ltd
John Borshoff, Managing Director/CEO
+61 8 9381 4366
Mobile: +61 419 912 571
Paladin Energy Ltd
Greg Taylor, Investor Relations Contact
905 337-7673 or Mobile: 416 605-5120 (Toronto)
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