PDN - Paladin Energy

[tcoates]

Re: PDN - Paladin Resources

Some above asked about the reference to the eureka report and pdn. I am not sure whether I can provide a direct link to the article, but if you go to google and enter

"eureka report pdn"

the first item in the results page should be a link to the report in question.

Tim

 

[Gurgler]

Re: PDN - Paladin Resources

Thanks, Tim.

A long article, originally published 22 June '07 - but containing the forecasts that Fab was mentioning:

"Tradetech the uranium industry body has reported that the spot price recently reached $US138lb and the long term price, which is equivalent to the bottom of the contract price range, has risen by $US10lb to $US95lb. PDN is totally unhedged and has exposure of 50% of production at spot prices. At the current spot price based on the relationship between the share price and the uranium price that has existed for the last few years, PDN is worth between $13-14.

However the upside case for PDN is highlighted by the sxr Uranium One $US3.1b bid for UrAsia to form a $US5b company with a global footprint of uranium assets. The bid values UrAsia’s resources at $US31lb compared to $US16lb for PDN. Applying the same implied EV/lb multiple, PDN is worth $19 per share."

(Source: http://www.eurekareport.com.au/iis/iis.nsf/ak/YVQwxY?opendocument)

Not sure about the claim that 'PDN is totally unhedged' - is that true?

 

[Fab]

Re: PDN - Paladin Resources

Thanks, Tim.

A long article, originally published 22 June '07 - but containing the forecasts that Fab was mentioning:

"Tradetech the uranium industry body has reported that the spot price recently reached $US138lb and the long term price, which is equivalent to the bottom of the contract price range, has risen by $US10lb to $US95lb. PDN is totally unhedged and has exposure of 50% of production at spot prices. At the current spot price based on the relationship between the share price and the uranium price that has existed for the last few years, PDN is worth between $13-14.

However the upside case for PDN is highlighted by the sxr Uranium One $US3.1b bid for UrAsia to form a $US5b company with a global footprint of uranium assets. The bid values UrAsia’s resources at $US31lb compared to $US16lb for PDN. Applying the same implied EV/lb multiple, PDN is worth $19 per share."

(Source: http://www.eurekareport.com.au/iis/iis.nsf/ak/YVQwxY?opendocument)

Not sure about the claim that 'PDN is totally unhedged' - is that true?

Note that I have reading the Eureka report for 1 year now and they have very often been very good at picking trend and stocks. Like for example BHP and RIO that have kept on saying that they would go up and up and up.

This statement is of interest to if you believe in PDN:
"There should be no doubt that PDN shares could easily “do a Fortescue”.
So if you like me you believe this one will be a big winner in the mid term the jitters happening at the moment are only buying opportunities

 

[Yeti]

Re: PDN - Paladin Resources

Not sure about the claim that 'PDN is totally unhedged' - is that true?

Not according to this:

From page three of PDN's March 2007 Quarterly Financial Report and MD&A:-

It is in this context that the significance of Paladin's production readiness should be examined.
Paladin has term sales contracts to US utilities for approximately 7.5Mlbs U3O8 for delivery between
2007 to 2012. These contracts were required to meet bankers’ conditions for its Langer Heinrich
Project loan.

 

[Sean K]

Re: PDN - Paladin Resources

Well, this should give it some support:

SYDNEY (Dow Jones)--At least one London-based fund manager who holds shares in Austarlian uranium miner Paladin Resources Ltd. (PDN.AU) has been formally approached by parties linked to Cameco Corp. (CCJ) of Canada, The Australian Financial Review reports Tuesday.

Without citing sources, the newspaper said the approach comes amid speculation Cameco is looking closely at Paladin and could be preparing a takeover bid for the company.

 

[56gsa]

Re: PDN - Paladin Resources

Not according to this:

From page three of PDN's March 2007 Quarterly Financial Report and MD&A:-

It is in this context that the significance of Paladin's production readiness should be examined.
Paladin has term sales contracts to US utilities for approximately 7.5Mlbs U3O8 for delivery between
2007 to 2012. These contracts were required to meet bankers’ conditions for its Langer Heinrich
Project loan.

From memory I think these sales were at US$60 / lb and represent about 50% of production over the next couple of years (perhaps more if they fail to meet their production targets)...

PDN down 1.5% on TSX overnight but Cameco interest as K mentioned should keep things bouyant...

 

[Fab]

Re: PDN - Paladin Resources

From memory I think these sales were at US$60 / lb and represent about 50% of production over the next couple of years (perhaps more if they fail to meet their production targets)...

PDN down 1.5% on TSX overnight but Cameco interest as K mentioned should keep things bouyant...

That explains the current 5% jump in good volume. That is exactly what PDN needed to put a rocket under it share price

 

[eMark]

Re: PDN - Paladin Resources

I guess some of you have seen the recent announcement. PDN's management are denying any takeover rumours. That shot the SP down again. I for one seem to have been caught in the crossfire...

But where there's smoke, there's fire? Any comments

 

[dj_420]

Re: PDN - Paladin Resources

I guess some of you have seen the recent announcement. PDN's management are denying any takeover rumours. That shot the SP down again. I for one seem to have been caught in the crossfire...

But where there's smoke, there's fire? Any comments

well cameco seem to be fishing for a position in PDN prior to a takeover attempt. thats the way i read it.

this would mean that if a takeover went to an acceptance vote then cameco have the swing or advantage in already holding a position.

 

[eMark]

Re: PDN - Paladin Resources

Not a bad finish to the day considering the drop in the SP after the 'emphatic denial' announcement from PDN earlier in the day. Dropping from 8.88 to 8.34 before recovering to 8.52 on close, says to me there may be something in the 'speculation rumours'. The following article is probably now considered old, but I can't be sure if it was published before or after PDN's announcement of 'I know nothing...'

A good read anyway.

Cameco may bid for Australian miner Paladin-paper
Mon Jul 16, 2007 6:20PM EDT

SYDNEY, July 17 (Reuters) - Cameco Corp. (CCO.TO: Quote, Profile, Research), the world's No. 1 uranium supplier, may be preparing a takeover bid for Australian uranium miner Paladin Resources Ltd. (PDN.AX: Quote, Profile, Research) to boost its sources of supply, the Australian Financial Review said on Tuesday. Citing no sources, the paper said it understood at least one fund manager had been approached by parties representing Canada-based Cameco. It said Paladin was aware of the takeover speculation but had declined to comment.

The speculation comes as Cameco's overhaul of its flooded Cigar Lake uranium mine in Canada is set to take months longer than it previously expected, potentially delaying production to 2011.

The mine, which sits on one of the world's richest uranium deposits, flooded last year, putting additional pressure on global uranium supply as demand has soared.

The paper said a drop in Paladin's share price has made it a possible takeover target. The Australian company cut its production forecast for its main Namibian mine last month.

Paladin acquired fellow Australian uranium miner Summit Resources Ltd. (SMM.AX: Quote, Profile, Research) in April.

http://www.reuters.com/article/topNews/idUKSYD2187620070716?rpc=44&sp=true

 

[Fab]

Re: PDN - Paladin Resources

well cameco seem to be fishing for a position in PDN prior to a takeover attempt. thats the way i read it.

this would mean that if a takeover went to an acceptance vote then cameco have the swing or advantage in already holding a position.

This type of rumours are often denied in order to get a better deal but are rarely unfounded. PDN is the ideal target in the U sector. Price went south recently and they are a producer.

 

[philby3]

Re: PDN - Paladin Resources

a couple of large orders went through after close today

17-07-2007 05:04 PM $8.610 159141 $1,370,204.010 Portfolio Special Crossing,Crossed

17-07-2007 04:38 PM $8.280 258161 $2,137,573.080 Portfolio Special Crossing,Crossed

Mean anything?

 

[Fab]

Re: PDN - Paladin Resources

a couple of large orders went through after close today

17-07-2007 05:04 PM $8.610 159141 $1,370,204.010 Portfolio Special Crossing,Crossed

17-07-2007 04:38 PM $8.280 258161 $2,137,573.080 Portfolio Special Crossing,Crossed

Mean anything?

Can anyone explain me how an order can go through after close of trade.
I personally believe the explanation is that there is some truth in the takeover speculation and this will be happening sooner or later.

 

[eMark]

Re: PDN - Paladin Resources

PDN. TO. How do you think the stock will fare tonight in light of PDN's denial of a takeover? Last night it appeared to react positively jumping from 7.25 to 7.71 after spending most of the earlier session falling. News must have filtered through for PDN. TSX around that time, when the SP turned around. But tonight....in light of the denial? It would appear that it will knocked about a bit? Hope it finds support from somewhere.

 

[Fab]

Re: PDN - Paladin Resources

PDN. TO. How do you think the stock will fare tonight in light of PDN's denial of a takeover? Last night it appeared to react positively jumping from 7.25 to 7.71 after spending most of the earlier session falling. News must have filtered through for PDN. TSX around that time, when the SP turned around. But tonight....in light of the denial? It would appear that it will knocked about a bit? Hope it finds support from somewhere.

The denial from PDN indeed knocked the share down a bit. Actually I believe this is a great opportunity to pick up some more PDN at what I believe is a bargain price before a takeover offer happens. Cameco has been mentioned but Xstrata or Areva are also company that might be interested in buying PDN specially at the current price.
Personally I have place an other order today to buy some more warrants as I believe it is just a question of time before takeover happens on PDN

 

[56gsa]

Re: PDN - Paladin Resources

down 3% on the TSX overnight but this in todays Australian... be nice sitting on 9 million shares in PDN!

Paladin's African troubles ease
Kevin Andrusiak | July 18, 2007

ANALYSTS have upgraded their forecast for Paladin Resources' 2006-07 financial year to a loss of $31.5 million, as teething problems and shipping delays at the company's African operations are largely resolved.

Southern Cross Equities has elevated the stock to a "buy" recommendation on the back of continued strength in the uranium market and the successful $1 billion acquisition of Summit Resources.

The broker added that the Valhalla project, which it now controls virtually outright after initially having a 50 per cent stake prior to the Summit bid, would become a "cornerstone" growth project for Paladin.

"With the share price retreating in recent months, value is now emerging in Paladin," Southern Cross analysts said in a note to clients.

"While on a price to EBITDA ratio, Paladin compares well with its global peers.

"Our target price of $10 a share is a premium of 1.5 times the 12 month net present value of $6.57. We use a premium as Paladin is one of the few largely unhedged producers in the robust uranium market, which should give it the opportunity to grow rapidly, either organically or through acquisition."

Southern Cross has also upgraded its short-term spot uranium price from $US95 a pound to $US125/pound against a current spot price of $US129/pound.

Paladin's share price high of $10.70 was reached on April 10 from where it retreated to a low of $7.78 as it struggled with teething problems at its Langer Heinrich mine in Namibia.

Meanwhile, Paladin has dismissed rumours it has recently become a takeover target for uranium heavyweight Cameco.

"The company can emphatically state that Cameco has not approached Paladin in this regard," company managing director John Borshoff said in a statement to the Australian Securities Exchange.

Paladin's share register is very open with no one entity controlling more than 4.4 per cent of the available stock.

According to Bloomberg, Mr Borshoff has a 3 per cent stake in the company while chairman Rick Crabb owns about 8.97 million shares, or 1.5 per cent.

Paladin shares gained 24c to $8.52.

 

[Fab]

Re: PDN - Paladin Resources

down 3% on the TSX overnight but this in todays Australian... be nice sitting on 9 million shares in PDN!

That confirms the bullish view that I have got nevertheless there seems to be pressure on the downside that I don't understand completely at the moment. Can anyone try to explain ?

 

[champ2003]

Re: PDN - Paladin Resources

Kayerekera gets the go ahead to mine by the IAEA so hopefully we will see a further rise in the coming days to greater heights.

 

[eMark]

Re: PDN - Paladin Resources

Interesting occurence last night which I don't think happens very often. The DOW closes down 150 points, and PDN.TO closes up 5c, to 7.74. At one point up 14c to 7.83 (and that was in the last 10 minutes) before retracting to 7.74. There seemed to be some solid support for PDN.TO last night in my opinion.

Usually if the DOW tanks, PDN freefalls. But not last night, it went up. I'm not sure what this will mean for PDN. AX on Monday, but it's got to lend it some support.

Also Gold was strong, as well as the base metals.

 

[Sean K]

Re: PDN - Paladin Resources

Interesting occurence last night which I don't think happens very often. The DOW closes down 150 points, and PDN.TO closes up 5c, to 7.74. At one point up 14c to 7.83 (and that was in the last 10 minutes) before retracting to 7.74. There seemed to be some solid support for PDN.TO last night in my opinion.

Usually if the DOW tanks, PDN freefalls. But not last night, it went up. I'm not sure what this will mean for PDN. AX on Monday, but it's got to lend it some support.

Also Gold was strong, as well as the base metals.

I'm not sure if there's too much to read into a one off occurrence. Perhaps if this occurred a few times recently then you could make some conclusions. From what I've read on PDN there seems to be more bull than bear longer term on PDN. Here is an article from FN Arena which gives some differing, but overall more bullish, views:

Support For Paladin
FN Arena News - July 19 2007

By Rudi Filapek-Vandyck

Equity strategists at UBS made no secret of the fact they have been searching the Australian share market for laggards to add to their model portfolio. For what it’s worth, the broker remains a firm believer in strong global economic growth in the year ahead, albeit with the potential for the US to disappoint. Bond yields should remain contained in the six months ahead.

UBS sees value in Australian banks, selected infrastructure stocks (see bond yields above), and selected long-duration growth stocks. Add resources to this list as the strategists believe the market has not reached the hype stage yet. As they expect this to happen at some time the sector should offer more upside still.

Investors in the uranium sector may be heartened by the fact that the broker has added Paladin Resources (PDN) to its model portfolio. Paladin is currently the broker’s most preferred resources stock in the Australian share market showing a firm belief in further upside for uranium prices as well as management’s ability to bring the Kayelekera project on line.

UBS currently has a $11 target for the shares and that is, to our knowledge, only beaten by the $12.10 target ABN Amro placed on the stock in April this year. The average target price in the FNArena database is $10.60, well above current share price levels of $8-something.

GSJB Were has maintained Paladin as a Sell on its Conviction List. The broker did remove Rio Tinto (RIO) as a Conviction Buy from the list after the proposed takeover of aluminium producer Alcan had been announced.

However, UBS’s positive view on Paladin’s share price prospects received support from resources analysts at Royal Bank of Canada (RBC) this week with RBC arguing Paladin remains the best exposure to uranium in Australia. RBC is less enthusiastic about Energy Resources of Australia (ERA), predominantly because of the latter’s legacy contracts.

In breaking news for the uranium market, the US Department of Energy (DOE) has announced it will be soliciting proposals to sell eight lots of Natural Uranium Hexafluoride (UF6) – up to 200 metric tons (MTU) by August 17th.

Stockinterview.com reports the amount being offered for sale, in terms of U3O8 equivalent, represents less than 520 thousand pounds. However, the DOE’s decision comes at a time when the uranium market is in seemingly oversupply which has caused the weekly spot price to decline in each of the past three weeks.