ASX/TSX-listed uranium miner Paladin Energy has confirmed it has and will not sell its Malawi-based Kayelekera mine, currently on care and maintenance.
The statement is in response to an article which appeared in Malawi’s The Daily Times recently, titled “Paladin sells off Kayelekera Mine”.
The article incorrectly asserts Paladin has sold all or part of its 85% interest in Kayelekera Mine to China National Nuclear Corporation. There has been no change in its ownership of the Kayelekera Mine in Malawi Paladin’s interim CEO Alexander Molyneux confirms.
Kayelekera mine was placed on care and maintenance in May 2014 due to low global uranium prices. A restart of the mine under favourable uranium market conditions would have the potential to quickly expand Paladin’s overall production by in excess of 40%.
Repurchase of $6 million in convertible bonds due 2017
Paladin Energy has also repurchased a principal US$6 million of its outstanding $243 million Convertible Bonds due in 2017.
The cash expenditure for the repurchase is approximately $5.6 million as the bonds were bought back at an average price of 91.75%. It has resulted in approximately $1 million in cash savings to Paladin in the form of avoided principal and coupon payments over the period to maturity of the 2017 Convertible Bonds.
The company has funded this repurchase and the $11 million repurchase of 25 November 2015 out of operating cash flow, which has been building since the commencement of the December quarter.
Paladin is experiencing positive operating conditions during the quarter, including the benefits of continued low reagent consumption since the reconfiguration of the bicarbonate recovery plant at Langer Heinrich in September and the impact of Namibian Dollar depreciation, which has fallen more than 8% over the course of the quarter to date.
The repurchase of $6 million together with the earlier repurchases of $31 million has reduced the principal amount outstanding of the Convertible Bonds due 30 April 2017 from $274 million to $237 million.