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Paladin Energy moves ahead in Namibia

The board of Paladin Energy Limited – a uranium production company listed on the Australian Securities Exchange, the Toronto Stock Exchange and the Namibian Stock Exchange – has given its approval to start the Stage III expansion of its 100%-owned Langer Heinrich uranium mine in Namibia.

Confirming this in a letter to the Australian Securities Exchange, the company revealed that this decision had been taken after investigating a number of production and technical scenarios in the feasibility study it had just completed. The project would be carried out under the following conditions:

  • Nominal production to increase to 5.2Mlb pa of U3O8 with a target completion date of September 2010, 
  • Minimised capital cost now estimated at US$71million (R568 million) with no significant additional infrastructure required,
  • Payback would take 15 months based on current U3O8 term pricing, 
  • Mine life is maintainable at approximately 20 years with further infill drilling, and 
  • There is potential for further expansion.

Paladin explained that original investigations had targeted a nominal production of 6Mlb pa of U3O8, which required a significant expenditure to upgrade both the power and water supply infrastructure. This expansion model would have required project commitment of US$174 million (R1.4 billion).

A revised expansion model adopted by Paladin for Stage III provides an excellent basis for further progressing and expanding the project. The expansion concept adopted has achieved 87% of the originally stated production using only 41% of the original planned capex.

It said this Stage III expansion moved Paladin Energy – through the Langer Heinrich operation –yet another step towards becoming acknowledged as a true Tier 1 uranium producer.

In another significant step forward in its strategy to become a major uranium mining house, the company has reached a very advanced stage of ramping up production at its new Kayelekera mine in Malawi, and expects to reach full production of 3.3 Mlbs pa by January next year.

Capex for the Kayelekera project has amounted to US$200 million (R1.6 billion). Life of mine has gone up to nine years, but several new satellite pits have been identified, and life of mine could rise to a level of 15 to 20 years.

www.paladinenergy.com.au

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