The total start-up project cost for Langer Heinrich Mine is now about N$2,4 billion (US$125 million), up from the previously announced N$2,2 billion (US$118 million).
The Langer Heinrich, which went into care and maintenance in May 2018, may restart commercial production in the second quarter of 2024.
Paladin, which owns 75% of the mine, said the restart project expenditure is N$897 million (US$47.2 million), and the operations expenditure is N$196 million (US$10.3 million).
According to an interim financial report for six months ended December 31, 2023, pre-production costs are N$116 million (US6.1 million).
The interim report also said Paladin held N$1.2 billion (US$61.6 million) of cash and cash equivalents as at December 31, 2023, excluding restricted cash of N$19 million (US$1 million), and had no corporate debt at the balance date.
Paladin executed a N$2.9 billion (US$150 million) syndicated debt facility in January 2024 to provide capital flexibility for the restart of operations at the Langer Heinrich Mine.
Initially, Paladin had said production would start in the first quarter of 2024, but lower contractor productivity in December 2023 delayed the process.
Nonetheless, the project is over 93% complete, with final construction and ongoing commissioning activities continuing across the processing plant.
Production activities commenced with the first ore feed into the processing plant on January 20, 2024, following the successful commissioning of the beneficiation circuit.
Operational readiness activities are nearing completion, with operational systems for safety, maintenance, and production completed.
The demobilisation of the contractor workforce commenced with approximately 760 personnel on site in January 2024, a significant reduction from the peak of 1,200.
Paladin has approximately 80% uncapped upside exposure to the uranium spot price through the end of 2030.
The mines ministry granted Paladin export permits for 2024.
The company says it has flexible shipping arrangements and early payment terms with its largest customer, providing significant delivery flexibility and improved cash flow during the Langer Heinrich Mine operational ramp-up.
Paladin has also executed a non-material offtake agreement to supply uranium to an industry-leading European counterparty, apart from the seven offtake agreements executed with top-tier counterparties in the US, Europe, and China.
“These contracts range in type and duration and provide base-escalated, fixed-price, and market-related pricing mechanisms,” Paladin said.
