Paladin Energy to raise $200m as uranium production restart looms

Thu 31 Mar 22, 3:22pm (AEST)
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Key Points

  • A $200m capital raising will fund Paladin Energy's Langer Heinrich Mine into production
  • Formal restart project launched expected in July 2022
  • Paladin expects to hit production status in 2024

Paladin Energy (ASX: PDN) is among several uranium companies tapping into shareholders for capital to fund project development activities as spot prices climb to 11-year highs. 

A $215m equity raise was launched to support the restart of Paladin’s ‘globally significant’ Langer Heinrich Mine in Namibia.  

Equity raise details 

  • $215m placement plus a share purchase plan to raise up to $15m

  • Offer price of 72 cents (8.9% discount to last traded price)

  • Represents 11.1% of existing Paladin shares on issue

The placement proceeds will be used for:

  • Restart capital of $116m

  • Working capital and fees of $99m 

Next steps 

Paladin has already kicked off early works including the mobilisation of key staff and ordering of long lead time capital equipment. The company expects a formal restart project to launch in July 2022. 

The Langer Heinrich Project is expected to hit commercial production status in 2024. 

Uranium sales tender

Paladin Energy received a uranium sales tender award to supply a North American utility company up to 2.1m lb of uranium over a 6-year period.

Paladin does not consider the tender amount to be material in the context of Langer Heinrich's overall production profile. However, considers the tender a sign of "continuing strong uranium market fundamentals."

The pricing for the tender will be based on an agreed US$ base price per lb plus a range of other considerations.

Paladin Energy Ltd (ASX PDN) Share Price - Market Index
Paladin Energy 12-month price chart


Earlier this month, Bell Potter released a note describing Paladin as the "largest and most liquid exposure to uranium on the ASX."

The broker held a "Speculative Hold" rating for the stock with a 96 cents target price.

Further upside drivers include resource expansion, extending Langer Heinrich's mine life and/or materially higher uranium prices.

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University and was Vice President of the University Network for Investing and Trading (UNIT). He is an avid swing trader, and drawn to breakouts and technical set ups. Outside of writing and trading, Kerry is a huge UFC fan, loves poker and bouldering.

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