Published on Thursday January 16 2014 (AEST)
Paladin Energy said talks around the sale of its Langer Heinrich uranium mine were progressing as the price for uranium begins to improve.
LANGER HEINRICH MINORITY INTEREST SALE
Strong interest from a variety of parties to sell a minority interest in Langer Heinrich continues. Paladin offers a unique platform in the uranium supply sector generating competition from the nuclear industry for an association both for current production and future growth.
Paladin has confidence in an outcome which will alleviate shareholder concerns regarding debt, noting the next tranche of Convertible Bonds is not due until November 2015.
The Perth-based miner flagged its intentions to sell its stake in the African mine in August when it announced a raft of cost-cutting measures to combat the weakening price of uranium.
While it was widely thought a deal would be inked before Christmas, Paladin chief executive John Borshoff said more details would become available in the next few weeks, The West Australian reported.
"Things are progressing and we will see what the next month or so will bring," he said.
The company’s quarterly report is due this week, but yesterday Paladin released an update for its Manyingee deposit, 80km east of Onslow.
The project has been upgraded, with the company reporting it now holds an inferred and indicated resource of 25.9 million pounds at an average grade of 850ppm, making it WA's fifth largest uranium project.
While Borshoff the project was a long-term play for the miner, he said the stubbornly low uranium price meant all new developments had been put on the backburner.
"It's unsustainable at the moment," Borshoff said.
"Everyone has declared a moratorium on new projects. It's all hanging by a thread and at some point this year it has got to turn."
Last year the company made a $US173 million loss in the three months to June.
Paladin signalled it would slash corporate and exploration costs by $US10.8 million, a 24 per cent reduction.
While capital expenditure will be cut by $US12.4 million over the next two financial years.
The miner said production costs have fallen 12 per cent at Langer Heinrich, with further targets aimed at reducing this to 15 per cent.
While cash costs at Kayelekera have dropped by 20 per cent, with the company aiming for a 22 per cent target.
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