Paladin Energy Ltd to Discuss Langer Heinrich Mine Update and Revision of FY2025 Guidance Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Mitch Ryan - Jefferies - Analyst : The first one relates to -- with regards to today's downgrade to your outlook. Can you please attribute -- how much of it is attributable to the change in stockpile grade or stockpile variability? And then what component would be related to water availability? And then in terms of the third bucket, yes, if you could apportion sort of percentages or what are the biggest drivers.

Question: Mitch Ryan - Jefferies - Analyst : As a derivative of that, so what data points should we be watching for to give us comfort that the water issues have been resolved?

Question: Mitch Ryan - Jefferies - Analyst : Yes. I guess I was looking more for a specific data point with relation to the water itself. You're saying that NamWater deliverability has been an issue and also then tailings recovery. So those sorts of data points, will they be provided? And when do you expect to be able to give us confidence that they have been -- that they are no longer ongoing?

Question: Mitch Ryan - Jefferies - Analyst : Okay. And then can you just give us a bit more color on -- [note 5], prices realized for uranium sales is dependent on production levels and volumes. Can you just extrapolate on that comment, please?

Question: Mitch Ryan - Jefferies - Analyst : Okay. So if I was to sort of pull that together, if you're towards the top end of your range at 3.6, then you will have more sales volume available for spot sales. So you would -- at current -- assuming spot rates remain, you would receive a higher realized price, whereas if you come in at the bottom end of your guidance, they'll be less available for spot sales, so you'll have a lower realized price. Is that a fair sort of summary? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 12, 2024 / 12:00AM, PDN.AX - Paladin Energy Ltd to Discuss Langer Heinrich Mine Update and Revision of FY2025 Guidance Call

Question: Cameron Taylor - Bank of America - Analyst : Just a question around the water issues, specifically with NamWater. Was that a sort of a regional issue? Is it statewide? Or is it more sort of specific around the delivery to the pallet and Langer Heinrich Mine? And then further to that, what sort of water storage do you have at Langer Heinrich? How many days buffer do you have? And are you looking to build new water storage to provide a bit more buffer?

Question: Cameron Taylor - Bank of America - Analyst : Fantastic. And then also on the mining side, like, I mean, you have targeted for July 2025. Is there any way to bring that forward slightly to sort of offset that variability in stockpile grade?

Question: Cameron Taylor - Bank of America - Analyst : Yes, because you don't want to waste that sort of high-grade mined ore when you got these issues with the water and whatnot. So I understand that. That's great. Just last question. Any further CapEx expenditure above sort of what's expected in consensus for any upgrades? Or do you see any major sort of purchases required? I know you're putting some tailings facility pumps and stuff, but I imagine they're quite small, right?

Question: Andrew Hines - Shaw and Partners Limited - Analyst : Yes. Look, obviously, a major reaction in the market today. The stock is down 25% as we're sitting here now, and sort of scratching head and trying to work out what the market's seeing and all this. So I think worst-case scenario, what you've lost 1 million pounds out of your resources in the stockpiles processing for this year, which at a margin of $40 a pound should only be about $60 million of value. So the market cap down $800 million, clearly, there's something else going on. I'm just wondering whether the market's getting concerned about your balance sheet. So I wonder whether you could talk to us about where you're at currently with cash, the balance sheet situation. Is there a risk that you need to come back to the market for further equity at any point? Or now that you're cash positive, is that not an issue?

Question: James Bullen - Canaccord Genuity Group Inc. - Analyst : Just a question here around -- I guess you're caught out with your grade in the stockpiles. I was wondering what additional work that could possibly be conducted prior to you entering the mining phase to make sure you don't get caught out on grades there and whether that's been conducted.

Question: James Bullen - Canaccord Genuity Group Inc. - Analyst : Got it. Just during the late life at Langer Heinrich and its previous existence, it averaged about 480 PPM, but you are a bit higher than that in terms of your assumptions around grade. So that's just based on all the geological work that you've done to date and you're quite confident in that number, yes?

Question: Regan Burrows - Bell Potter Securities - Analyst : Just sort of following on from Mitch's line of question to start, just on a sales delivery point of view. From memory, I think when you were having to restart, your contract book was fairly full for the first two years. I guess the risk is obviously lower production guidance that in order to feed into those contracts, you sort of need to purchase pounds in the spot market. And I guess following on from that, there was a note in the announcement this morning just on the 200,000-pound loan material. Can you sort of just elaborate on that?

Question: Regan Burrows - Bell Potter Securities - Analyst : And just on that loan specifically, what are the terms on it? I assume you have to pay an interest on that.

Question: Regan Burrows - Bell Potter Securities - Analyst : Yes. Okay. Great. And just obviously, I guess, more broadly, the whole of Southern Africa is going through quite a sort of sustained drought at the moment. I mean what's the risk that your allocation for water at Langer Heinrich gets sort of revised lower from NamWater?

Question: Shannon Sinha - Morgan Stanley - Analyst : I'll just keep it brief because I'm just trying to understand as well the share price reaction. So maybe once the mining restarts, is there any other issues that could -- we could see at the plant apart from the water issues that were flagged today?