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

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 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.