Paladin Energy’s Langer Heinrich uranium mine in Namibia recorded a 19% decline in production during the September 2026 quarter, but benefited from a 12.5% increase in uranium selling prices, which helped cushion the financial impact of lower sales volumes as production costs rose.
The mine produced 1 million pounds of uranium oxide (U₃O₈), compared with 1.23 million pounds in the preceding quarter, while its average realised selling price increased from US$70.60 to US$79.40 per pound, according to Paladin’s quarterly report released on 14 October.
Despite the stronger prices, production costs increased by approximately 19% from US$51.60 to US$61.60 per pound, as a planned maintenance shutdown, weaker processing recoveries and low uranium inventory within the processing plant contributed to lower output.
Uranium sales declined from 1.35 million to 1.16 million pounds, but higher prices helped limit the decline in estimated sales value to approximately US$3.2 million, from US$95.3 million to US$92.1 million, based on the company’s rounded quarterly sales figures.
Paladin, which holds a 75% interest in Langer Heinrich, maintained its full-year production guidance of between 5.1 million and 5.6 million pounds for the financial year ending June 2027, with higher production expected as mining advances into better-grade sections of the J Pit.
Lower recoveries weigh on production
Paladin attributed the decline in quarterly production to a combination of planned maintenance, lower uranium recoveries and the mining sequence required to reach higher-grade ore.
The processing plant treated 1.17 million tonnes of ore during the quarter, compared with 1.19 million tonnes in the preceding three months, indicating that the reduction in uranium output was considerably greater than the decline in the quantity of material processed.
The average uranium feed grade remained relatively stable at 486 parts per million, compared with 488 parts per million previously, but the plant’s uranium recovery rate fell from 90% to 85%, meaning a smaller proportion of the uranium contained in the processed material was recovered.
The company said ore characteristics associated with the mining sequence contributed to the weaker recovery performance, while low uranium inventory within the processing circuit at the beginning of the quarter also affected production.
These factors, together with the maintenance shutdown, reduced output and contributed to the increase in unit production costs.
Paladin reported that processing performance improved during September as mining advanced in the J Pit, with throughput strengthening towards the end of the quarter.
Managing director and chief executive Paul Hemburrow said the mine remained on track to achieve its annual production targets despite the weaker start.
“The quarter was impacted by the shutdown and the pit transition, with feed grade, plant performance and in-circuit inventory improving during September. We expect production to increase in the second half of FY2027 and we remain on track to deliver our FY2027 guidance.”
J Pit development continues
Although uranium production declined, overall mining activity increased as Paladin continued removing waste and preparing access to the main orebody.
Total material mined increased from 7.45 million tonnes to 7.73 million tonnes during the quarter, while waste removal rose from 5.57 million tonnes to 5.89 million tonnes.
Ore mined declined slightly from 1.87 million tonnes to 1.84 million tonnes, reflecting the continuing transition towards areas expected to provide higher-grade material.
Mining activities remained concentrated in the J Pit, where Paladin is progressing towards the main orebody while stripping topsoil and waste to open access to primary ore.
The company expects this work to continue throughout the financial year as mining advances into the pit’s lower southern benches.
Waste removal is an important part of open-pit mining because material covering or surrounding an orebody must be excavated before the underlying mineralisation can be accessed.
Although this work does not immediately translate into additional uranium production, it prepares the mine to process ore scheduled for extraction in subsequent quarters.
Paladin expects the ongoing development to provide higher-grade feed and improve metallurgical recoveries, supporting increased production and lower unit costs as the financial year progresses.
The company has indicated that the second half of the financial year will be particularly important for production, when increased quantities of higher-grade ore are expected to become available to the processing plant.
Stronger prices support uranium sales
Higher uranium prices provided an important financial cushion during the weaker production quarter.
Langer Heinrich sold 1.16 million pounds of uranium at an average realised price of US$79.40 per pound, compared with 1.35 million pounds at US$70.60 per pound in the preceding quarter.
Although sales volumes fell by approximately 14%, the increase in realised prices meant that the estimated value of uranium sold declined by only about 3.4%.
Based on the reported sales volumes and average prices, uranium sales were worth approximately US$92.1 million during the September quarter, compared with approximately US$95.3 million previously.
These are calculated estimates rather than separately disclosed quarterly revenue figures, and the final recognised revenue may differ because of rounding and the timing of sales recognition.
The higher average price reflected increasing uranium prices and a greater proportion of sales linked to market-related pricing arrangements.
Paladin’s uranium sales contracts include different pricing mechanisms, meaning the average price received can change depending on the mix of deliveries and prevailing market conditions.
The company said quarterly sales volumes and realised prices are also influenced by customer delivery schedules and shipping arrangements.
While higher uranium prices supported sales value, the increase in production costs meant that the mine did not receive the full benefit of stronger market conditions.
Paladin’s reported production cost rose by US$10 per pound, from US$51.60 to US$61.60, largely reflecting the impact of lower uranium output on unit costs.
The company’s production-cost measure covers direct mining and processing expenditure but excludes several other expenses, including royalties, depreciation, capital expenditure and certain inventory-related costs.
It therefore does not represent the mine’s total cost of sales or provide a complete measure of profitability.
Langer Heinrich ended September with finished uranium product inventory of 1.98 million pounds, compared with 1.69 million pounds at the end of June.
The company also reported outstanding uranium product loans of 400,000 pounds, which provide flexibility in meeting customer delivery commitments.
Capital expenditure and drilling
Paladin continued investing in Langer Heinrich despite the weaker quarterly production figures.
Capital expenditure increased from US$5.1 million to US$6.9 million, while capitalised stripping costs amounted to US$6.3 million, compared with US$7.3 million in the preceding quarter.
The company also recorded US$6.2 million in costs associated with mining and stockpiling lower-grade ore for future processing, down from US$9.4 million.
These amounts are accounted for separately from the reported production cost per pound and reflect expenditure associated with maintaining and preparing the operation for future production.
Resource definition work also continued within Mining Licence 140, where two drilling rigs completed 15,222 metres during the quarter.
The programme included infill drilling intended to improve geological confidence in areas scheduled for near-term mining, together with exploration drilling targeting extensions of known uranium mineralisation.
The results are expected to assist mine planning by providing additional information about the grade, location and continuity of uranium-bearing material.
Paladin reported no supply disruptions arising from the conflict in the Middle East during the quarter, although it continues monitoring stock levels of operating inputs and inbound shipments.
At group level, the company ended September with US$209 million in unrestricted cash and investments and an undrawn US$70 million revolving credit facility.
Higher production needed to meet annual target
The September results leave Langer Heinrich facing a demanding production schedule over the remaining nine months of the financial year.
Paladin has maintained its annual production guidance of between 5.1 million and 5.6 million pounds of uranium oxide for the year ending June 2027.
With 1 million pounds produced during the first quarter, the mine must deliver another 4.1 million to 4.6 million pounds during the remaining three quarters to achieve that target.
This would require average quarterly production of approximately 1.37 million to 1.53 million pounds, substantially above the September quarter’s output.
Paladin expects much of the improvement during the second half of the financial year as higher-grade ore becomes available from the J Pit and processing recoveries improve.
The company has also maintained its full-year production cost guidance of US$44 to US$48 per pound, significantly below the US$61.60 recorded during the September quarter.
Achieving that target will require a substantial improvement in unit production costs during the remaining quarters, supported by higher output and improved processing performance.
However, Paladin has cautioned that its guidance is based on current operating conditions and assumptions and could be affected by geopolitical disruptions or other operational challenges.
The September performance therefore places greater importance on the effectiveness of ongoing pit development and the processing improvements expected in subsequent quarters.
Although the decline in production and recovery demonstrates the operational challenges facing Langer Heinrich, stronger uranium prices helped protect sales value during the period.
The coming quarters will determine whether the mine can translate progress in the J Pit into the higher production volumes and lower unit costs needed to meet its annual targets.
