Paladin Energy is banking on higher-grade uranium ore from the J Pit at its Langer Heinrich mine to achieve its production target of between 5.1 million and 5.6 million pounds for the financial year ending 30 June 2027, despite a decline in output and rising production costs during the September quarter.
The company, in its quarterly financial report released on 5 November 2026, said mining is progressing towards the main orebody in the J Pit, where improved uranium grades and processing recoveries are expected to increase production and reduce costs during the remainder of the financial year.
Paladin expects higher production during the second half of the financial year as mining advances into the lower southern benches of the J Pit, making higher-grade ore available to the processing plant.
The company has consequently maintained its annual production guidance of between 5.1 million and 5.6 million pounds of uranium, together with its production cost forecast of US$44 to US$48 per pound.
The outlook comes despite Langer Heinrich producing 1 million pounds of uranium during the three months ended 30 September 2026, compared with 1.23 million pounds in the preceding quarter, a decline of 230,000 pounds.
Production costs increased from US$51.60 to US$61.60 per pound, while the processing plant’s recovery rate fell from 90% to 85%.
Paladin attributed the weaker performance to a planned maintenance shutdown, ore characteristics associated with the mining sequence and low levels of material within the processing circuit at the beginning of the quarter.
The company said the recovery rate was at the lower end of its target range, contributing to reduced production and higher unit costs.
Despite these challenges, mining activities continued according to plan, with total material mined increasing from 7.45 million tonnes in the June quarter to 7.73 million tonnes during the September quarter.
All mining activity was concentrated in the J Pit, where the company continued removing waste and developing access to the main orebody.
Ore processed during the quarter amounted to 1.17 million tonnes, compared with 1.19 million tonnes previously, while the average uranium feed grade remained relatively stable at 486 parts per million, against 488 parts per million in the June quarter.
Paladin reported that production improved during September as mining advanced in the J Pit and processing plant performance strengthened, with throughput increasing during the month.
The company expects improvements in ore grade and metallurgical recovery as mining reaches the lower southern benches to support higher production and lower costs over the remainder of the financial year.
Its production guidance remains unchanged from the forecast announced on 22 July 2026, although Paladin cautioned that the outlook depends on prevailing operating conditions and could be affected by geopolitical disruptions.
Langer Heinrich generated US$92.4 million in revenue during the September quarter after selling 1.16 million pounds of uranium at an average realised price of US$79.40 per pound.
Revenue was slightly below the US$95.3 million recorded in the June quarter, when the mine sold 1.35 million pounds at an average realised price of US$70.60 per pound.
The higher selling price reflected strengthening uranium prices and a greater proportion of market-related sales during the period.
Compared with the September 2025 quarter, revenue increased from US$36 million to US$92.4 million, supported by higher sales volumes and improved uranium prices.
During the corresponding period last year, Langer Heinrich sold 530,000 pounds at an average realised price of US$67.40 per pound.
Paladin said quarterly revenue and sales volumes are influenced by customer delivery schedules, shipping arrangements and the pricing mechanisms contained in its uranium sales contracts.
The increase in production costs contributed to Paladin recording a group loss after tax of US$300,000 during the September quarter, compared with a profit of US$700,000 in the preceding quarter.
Cost of sales increased from US$75.4 million to US$78.2 million despite lower sales volumes, reflecting the higher cost of producing each pound of uranium.
However, the latest loss was substantially smaller than the US$9.9 million recorded during the corresponding quarter in 2025.
Gross profit increased from US$7.9 million to US$14.2 million over the same period, supported by stronger uranium sales and prices.
The company also recorded a US$19.3 million net operating cash outflow during the quarter, compared with a US$74.1 million inflow in the June quarter.
Paladin attributed the change partly to the timing of customer receipts, explaining that US$32.6 million in September-quarter revenue had already been received during the preceding quarter.
Paladin completed 15,222 metres of resource drilling at Langer Heinrich during the quarter, using two drilling rigs within Mining Licence 140.
The drilling programme focused on improving resource definition in areas scheduled for near-term mining and testing extensions to known uranium mineralisation.
Capital expenditure at the mine increased from US$5.1 million in the June quarter to US$6.9 million in September.
The company also spent US$6.2 million on mining and stockpiling lower-grade ore for future processing and recorded US$6.3 million in capitalised stripping costs.
Paladin holds a 75% interest in Langer Heinrich, which resumed commercial production in March 2024 and completed its operational ramp-up during the financial year ended 30 June 2026.
The company expects higher-grade ore from the J Pit to support increased uranium production and lower unit costs during the remainder of the current financial year.
