Troubled Tier 1 uranium mine is ready to be back in the game
Paladin Energy Limited (ASX:PDN) announced the results of the Langer Heinrich Mine Restart Plan. The Restart Plan marks the completion of an extensive work package aimed at delivering a reliable mine restart to bring the globally significant Langer Heinrich Mine back into production under the right Uranium pricing environment.
The Restart Plan is now complete confirming restart capital, costs and operational performance;
Langer Heinrich can be brought back into production for US$81M of pre-production cash expenditure, allocated as follows:
o operational readiness (US$34M) required to mobilise the work force, undertake maintenance and provide the working capital requirements to commence production; and
o discretionary capital (US$47M) specifically aimed at improving process plant availability and reliability to lift production capacity by more than 10%.
Low restart capital intensity (US$14/lb) and competitive C1 Cost of Production (US$27/lb) confirms Langer Heinrich is well positioned alongside other Tier 1 operations to deliver product
into a recovering Uranium market;
The Restart Plan has confirmed a 17-year mine life for Langer Heinrich with peak production of 5.9Mlb U3O8 per annum for 7 years;
The Life of Mine Plan outlines three distinct operational phases being Ramp-up (year 1), Mining (year 2-8) and Stockpile (year 9-17). The utilisation of stockpile material in the Ramp-up phase greatly reduces operational start up risk and provides a strong platform for the operation to move toward nameplate capacity within a 12-month period;
Langer Heinrich remains fully permitted to resume mining and Uranium exports; and
Paladin’s cash position of US$35M provides financial flexibility and the Company will only consider a restart when it secures an appropriate term-price contract with sufficient tenor and value to
deliver an appropriate return to all stakeholders.
Paladin CEO, Ian Purdy said “The completion of the Langer Heinrich Mine Restart Plan is a significant step forward for the Company and completes the vast amount of study work undertaken over the past 18 months. The operational and economic parameters identified in the chosen restart plan show the strategic significance of the Langer Heinrich asset and highlight the potential economic returns that can be delivered under the right Uranium price environment. Paladin will continue to refine and progress work packages under The Restart Plan and I look forward to updating the market on our ongoing activities”.
Paladin owns 75% of the Langer Heinrich Mine, located in Namibia. The remaining 25% is owned by CNNC Overseas Uranium Holdings Limited, a subsidiary of China National Nuclear Corporation (CNNC), a leading Chinese nuclear agency. The Langer Heinrich Mine commenced operations in 2007 and has produced and sold over 43Mlb of U3O8 to date. The mine was transitioned into care and maintenance in August 2018 due to the sustained low Uranium price.
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