Despitea third quarter after-tax loss, the mood at Perth-based Paladin Energy Ltd onThursday was that of: this time around, all was not in vain.
Duringthe quarter to 31 March, the TSX and ASX-quoted uranium miner finally managed toreduce its quarterly losses, which had hovered at above US$11-million since thethird quarter of its previous financial year, while improving performance atits 100%-owned Langer Heinrich uranium mine and fast-tracking the developmentof its 85%-owned Kayelekera Uranium Project in Malawi.
Forthe first time the company's production at Langer Heinrich mine, which came onstream early last year, was within expectations. Since the mine came on streamin January last year, Paladin had not met its production targets and had atsome points been forced to revise them downwards.
Thecompany described the third quarter loss of US$8.4 million, down from US$11.4million in the previous corresponding period, as a consequence of improvedperformance. It said a US$7.7-million profit from Langer Heinrich mine wasoffset by a US$2.5-million investment in exploration and evaluation, and theloss included US$7-million in finance costs and US$6.6-million in net corporatecosts.
Sinceits first nameplate production month in December 2007, Langer Heinrich Uraniumhas been progressively and methodically optimising mine and processing plantoperations, Managing Director John Borshoff said in a notice accompanyingPaladin Energy's third quarter results.
LangerHeinrich's production for the March quarter was 490,800 pounds of uranium oxide(U3O8) plus an additional 60,600 pounds U3O8 loaded in a temporary uraniumprecipitate thickener, which will be converted to drummed product as anincrement to design production when a new thickener comes on line.
Revenuefor the quarter rose to US$15.3 million from US$3.1-million thanks to increaseduranium production. Sales for the quarter were US$13.8-million comprising208,000 pounds U3O8 at an averagerealized price of US$66 per pound, which was in line with the revised sales andshipping plan foreshadowed in the last quarter to overcome shipping delays.
Lossafter tax for the nine months ending 31 March 2008 was at US$34.2-million,which Paladin said consisted of US$5.8-million profit for Langer Heinrich'soperational ramp up activities in 2007, US$9.1-million in investment inexploration and evaluation expenditure, US$20.4-million in financial costs andUS$10.5-million in net corporate costs, including foreign exchange losses andshare based payments.
However,cash receipts from customers for the quarter were lower at US$3.3 million as aresult of the timing of invoice receipts. But the company had a strong balancesheet with net assets of US$1.4-billion including US$417-million in cash as at31 March, said Borshoff, and its credit committee had approved offers receivedfor finance totalling US$167 million for the Kayelekera Uranium Project.
Borshoffsaid Paladin had commenced work on its US$50 million ($53.3 million) stage-twoexpansion of Langer Heinrich to 3.7 million pounds of uranium a year, withplanning underway for a further expansion to 6 million pounds a year.
Thisis being carried out in conjunction with Stage II construction work to expandthe facility's overall capacity to 3.7-million pounds of uranium concentrateper annum, he said.
The3.3-million pounds per annum Kayelekera Uranium Project remained on schedule tocommence commissioning and production ramp up from the beginning of the firstquarter of 2009 with the project currently 31% complete.