Energy: The good old days are coming back for uranium miner Paladin Energy
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In 2007, uranium was selling for $US140 per pound and Paladin Energy’s (ASX:PDN) world class Langer Heinrich uranium mine in Namibia was capitalising.
From these all time highs uranium gradually fell out of favour with investors in the wake of Japan’s Fukushima disaster, with prices falling below i$US20/lb until recently.
At these prices, there weren’t many uranium producers making a profit so Paladin mothballed the mine hoping for a recovery.
Many believe that in order to feed the world’s growing contingent of nuclear power plants these low prices are unsustainable going forward.
Paladin is betting on this price rise as it looks to restart Langer Henrich, which produced 43.3 million pounds in ten years before being halted in August last year.
Today, the company released the first stream of its Preliminary Feasibility study for this restart.
It estimates production of 5.2 million pounds of uranium per annum. Furthermore, Paladin declared a vanadium resource of 38.8 million pounds and it plans to sell this as a by-product.
It will need $US80 million ($118 million) to restart the mine – nearly half of which will be spent on plant repairs and improvements. The company told shareholders it had potential to be production ready during mid-2021, subject to funding and uranium prices recovering.
“The Langer Heinrich mine is world class uranium asset and this study confirms Paladin’s key position as a first mover back into production in a recovering uranium market,” CEO Scott Sullivan said.
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UK-focused explorer Doriemus (ASX:DOR) expects to complete coring operations at its Horse Hill oil well early this week – this involves taking a rock sample from a drill hole. But its local operator has added an additional core due to new data indicating the oil water contract may be deeper than previously recognised. The core’s drilling will be designed to provide necessary data to confirm if more oil is present.