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PDN - Paladin Energy

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Re: PDN - Paladin Resources

May have something do with Cameco's continuing run of setbacks - 3 in <2 weeks - see below.

Cameco announces third piece of bad news in less than two weeks with plant leak July 20, 2007 - 19:08 By: KRISTINE OWRAM TORONTO (CP) - Uranium producer Cameco Corp. (TSX:CCO) has suspended operations at its Port Hope, Ont., processing plant after uranium and chemicals were found in soil at the facility - the third piece of bad news for the Saskatoon-based company in less than two weeks. On July 11, Cameco, which is the world's biggest uranium producer, announced that it will take more time than expected to stop a flood at its new Cigar Lake project and then pump out the water. This will delay the planned production startup of the northern Saskatchewan uranium mine until 2011 instead of late 2010. Then, on Thursday, Cameco reported that Toronto-based subsidiary Centerra Gold Inc. (TSX:CG) has lowered its 2007 gold production estimates for the Kumtor mine in the former Soviet republic of Kyrgyzstan by one-third of the previous level.

Friday's announcement, that the Port Hope processing plant will be temporarily shut down while cleanup and testing is done at the site, adds another degree of uncertainty for Cameco shareholders.

Jul 20, 2007 06:13 PM Canadian Press SASKATOON – Uranium producer Cameco Corp. (TSX: CCO) has suspended operations at a processing plant in Port Hope, Ont., after uranium and chemicals were found in soil at the facility. ... Cameco says it discovered the contamination when it was excavating within the building for the installation of new equipment. The plant handles uranium hexafluoride, a chemical form of uranium used during its enrichment process. The company says it will be shut down for at least two months but no layoffs are planned. Further investigation and environmental testing is ongoing at the site.

Cameco closes Ontario plant after uranium found in soil Murray Lyons, CanWest News Service Published: Friday, July 20, 2007 SASKATOON ”” Uranium mining and processing giant Cameco Corp. said Friday it had shut down its Port Hope conversion facility in Ontario after discovering uranium in the soil near the plant. If the U-processing plant is closed for 2 months (maybe more if soil remediation is needed) then this puts a U producer such as PDN in the box seat, imho!!! DYOR of course

The company first discovered the uranium on July 13 and made the decision to shut the facility down while the company and third-party consultants try to figure out how the uranium got into the soil and how to contain it.

In an interview Friday, Cameco spokesperson Lyle Krahn said the decision to shut down the Port Hope conversion facility was made by the company and not the Canadian Nuclear Safety Commission.

“The decision to suspend production initially and the decision to suspend production for a minimum of two months ... were both at our initiative and not the regulator,” Krahn said. “We continue to keep them (commission officials) informed and they are requesting information and monitoring the situation as we move along.”
 
Re: PDN - Paladin Resources

Hmmmm...posting to myself?! Oh well, price sensitive ann out 3.21pm 24 July 07-
Summit Resources Limited (“Summit”) (aka 90%PDN) is pleased to advise the following update on its uranium projects in the Mt Isa region in the North-West of Queensland. The projects that are 100% owned by Summit combined with the areas under the Isa Uranium Joint Venture represent the third largest uranium province in Australia, with the parties involved working to fast track development. The forthcoming program will have a clear focus on resource definition and expansion in the key target areas with upgraded preliminary metallurgical scoping work and the commencement of indicative base line environmental data.
PROGRAM OUTLINE
Isa Uranium Joint Venture – Summit (50%) / Paladin (50%)
Summit and Paladin share a 50% interest each in the Valhalla and Skal ore bodies through the Isa Uranium Joint Venture. The Isa Uranium JV (comprising a 50% shareholding of Summit and 50% held by Paladin – through Valhalla Uranium Ltd) recently had the first meeting of its operating committee. Paladin is also a major 82% shareholder of Summit. Summit is the manager of the Joint Venture and is pleased to advise that the operating committee has approved a budget of $8,000,000 for the financial year 2007/08 (being a 320% increase over the previous year’s expenditure). This amount includes a proposed drilling program (see below), metallurgical test work, and environmental and radiation baseline studies.
Drilling at the Valhalla and Skal deposits
The budget approval covers an extensive drilling program at both the Valhalla and Skal deposits - with the aim of both extending the existing resource envelopes along strike and improving the current resource classification. The proposed plan includes 147 drill holes at Valhalla for a total of 49,620m. Of this 33,030m will be RC and the remaining 16,230m Diamond drilling. The program is aimed at ensuring that the majority of the top 400m of the resource will fall into the Measured and Indicated Resource categories. This depth has been targeted as it is expected to be the current underground is not seen as a priority at this time.
A number of 80m spaced drill lines have been planned to test the expected strike extension of the mineralisation and add to the Inferred portion of the resource. Radiometric down-hole logging will be used to check all drill holes in conjunction with geochemical assaying of selected drill holes for verification purposes. The aim of this is to accelerate the collection of data and aid in refining the drilling plan. Approximately 28 drill holes for 5000m are planned to test the Skal North and King George mineralised areas with the intention of converting current historic resources to JORC standards. The program is also aimed at extending and infilling the area between Skal North and King George. Historic information has recently been sourced indicating the potential for additional mineralisation at King George. This is going to be followed up.
Mt Isa Uranium – Summit (100%)
A further $2,000,000 has been earmarked for Summit’s other uranium projects. Work on these prospects will include additional resource drilling at Mirrioola and exploratory holes at other prospects. Other work will include mapping, ground radiometrics and evaluation of previous data. This does not include expenditure under the Georgina Basin Joint Venture, which is yet to be determined and will be funded by Newland Resources Ltd if it elects to remain in the joint venture.
CORPORATE
Bid by Paladin Resources Ltd
On 1 June 2007, Paladin Resources Ltd (“Paladin”) announced the closure of its takeover bid for all of the fully paid ordinary shares in Summit, in which it now holds 81.82% of the issued shares. Summit welcomes Paladin as a major shareholder and considers the investment by Paladin to be fortuitous, given the stage of development of Summit’s major projects.
Paladin will contribute substantially to the expertise necessary to develop a uranium project and brings with it a depth of experience in:
uranium geology, exploration and geophysical review;
resource evaluation;
metallurgical technical and functional experience across a range of uranium processing operations;
feasibility development and review;
land management;
environmental assessment;
radiation management;
production development; and
marketing
The benefit of this experience would not otherwise be available to Summit. Paladin also has significant financial capability and experience in debt and equity funding, which will be crucial for Summit’s funding requirements if it is to proceed to the production phase.
 
Re: PDN - Paladin Resources

drmb said:
Hmmmm...posting to myself?! Oh well, price sensitive ann out 3.21pm 24 July 07-
Click to expand...

Nahh! I just think there's not a lot to post about at times with this stock.

Well yesterday PDN held it's ground, after the DOW 150pt loss, giving up only 2c. But today it loses 31c after the DOW gains 92 pts. Go figure. I'm not saying the two are linked, far from it. It's just interesting.

What I did notice though is that CCO.TO lost well over $3.00 last night, due to a run of bad announcements. But again PDN.TO lost only 2c. Still doesn't explain todays PDN.AX weakness.

Just playing the waiting game...
 
Re: PDN - Paladin Resources

For a fund who will be specialising in investing in u stocks, it's interesting to see their investment spread (detailed in the list at the bottom).


Uranium Focused Energy Fund - Rights offering (TSX: UF.UN)
EXPIRES AUGUST 29, 2007

TORONTO, July 23 /CNW/ - Middlefield Group, on behalf of Uranium Focused
Energy Fund, is pleased to announce that it has filed a final prospectus in
connection with an offering of Rights to its unitholders to subscribe for
Units. Unitholders of record at the close of business (Toronto time) on
July 31, 2007 will receive one Right for each Uranium Unit held on the record
date. Three Rights will entitle the holder to purchase one Fund Unit at a
price of $9.30 until 4:00 p.m. (Toronto Time) on August 29, 2007, at which
time all unexercised Rights will expire. If all the Rights are exercised, the
Fund will issue approximately seven million Units and receive net proceeds of
approximately $64 million.
Each holder of Rights who subscribes for all of the Units to which that
holder is entitled under the Basic Subscription Privilege may subscribe for
any number of additional Units at a price equal to the subscription price for
each additional Unit, subject to availability. Units issued pursuant to this
rights offering will participate in the September 2007 distribution. The
directors and officers of the Manager intend to exercise all their Rights to
acquire Units under the Basic Subscription Privilege.
Uranium Focused Energy Fund is a TSX-listed fund focused predominantly on
the securities of issuers that operate in or have exposure to the uranium
sector, supplemented with securities of other energy related issuers. The Fund
has been designed to capitalize on the view of the Advisor, Middlefield
Capital Corporation, that the uranium sector will continue to provide
attractive opportunities for investment over the next several years. The
strong fundamentals underlying the uranium industry include rising demand for
nuclear power on the back of concerns over carbon emissions from coal-based
power generation as well as the high cost of alternative fuels like natural
gas.
Middlefield Capital Corporation is a specialty investment manager with
over $4.0 billion in assets under management. Since its inception in 1979,
Middlefield has established a strong reputation as a creator and manager of
unique investment products designed to balance risk and return to meet the
demanding requirements of investment advisors and their clients. Middlefield
has developed particular expertise in the oil and gas, mining and uranium
sectors.
Global Fuel Solutions, an independent uranium industry consultant based
in Los Altos, California, has been engaged to provide Middlefield with
analysis and opinion regarding uranium market supply-demand fundamentals and
associated pricing implications.
The net asset value of the Fund at the close of business on July 19, 2007
was $9.26. The Fund trades on the Toronto Stock Exchange under the symbol
UF.UN.


<<
-------------------------------------------------------------------------
TOP 25 HOLDINGS REPRESENTING APPROXIMATELY 80% OF TOTAL ASSETS OF OVER
$ 210 MILLION

(AS AT JULY 19, 2007 - IN ORDER OF LARGEST TO SMALLEST HOLDING)

1. Paladin Resources Ltd. 10. Major Drilling Group International
Inc.
2. Cameco Corporation 11. Ur-Energy Inc.
3. Denison Mines Corp. 12. Areva CI
4. BHP Billiton Ltd. 13. Uranerz Energy Corporation
5. Rio Tinto plc 14. Energy Resources of Australia Ltd.
6. Uranium One Inc. 15. Shaw Group Inc.
7. UEX Corporation 16. Energy Fuels Inc.
8. First Uranium Corporation 17. Aurora Energy Resources Inc.
9. Uranium Participation Corp. 18. General Electric Company

19. Energy Metals Corporation
20. Laramide Resources Ltd.
21. Husky Energy Inc.
22. Mega Uranium Ltd.
23. Canadian Oil Sands Trust
24. Fronteer Development Group Inc.
25. Suncor Energy Inc.
 
Re: PDN - Paladin Resources

News coming from PDN appear good nevertheless PDN seems to have some problems resuming its upward trend. My guess is that it is temporary. $8 appears to be a strong resistance point and if that breaks $7.50 is even stronger so I am guessing that PDN will bounce back on one of these 2 resistance points. Also a takeover is possible at this price.
 
Re: PDN - Paladin Resources

Here is why PDN is a big big buy.

Uranium

In this context we believe the uranium industry is both strategic, and on the verge of global consolidation. Xstrata has already confirmed that uranium is a strategic commodity target and there is no doubt that this view was a major consideration in the failed bid for Western Mining. In addition CVRD has recently farmed into two uranium exploration assets in W.A. The long term fundamentals of the uranium market remain very strong, with a significant increase in global demand, against a backdrop of future supply shortages, supported by the first synchronised effort by world Government's to reduce global carbon emissions.

Supply constraints

Interestingly, the uranium market is supported by precisely the same supply characteristics as base metals. There are major production constraints and serious delays in the supply response against a significant increase in global demand. Since 1985 static mine production has resulted in up to 50% of reactor uranium requirements sourced from secondary supply. However, the security of this supply is problematic with the rundown in Western inventory supplies to critical levels of just 12 months reactor feed.

In addition the Russian government recently announced that it would not continue the "Megatons to Megawatts" programme when it expires in 2013. This program has been the major source of secondary supply. According to World Nuclear Association (WNA) figures, last year the deficit between mine supply of 39,655kt, and global demand was a massive 40%. In other words, last year secondary supply totalled 22,981kt.

Cigar Lake

However, the mine supply response has recently suffered a huge blow with the flooding of the massive Cigar Lake project in Canada. The reserve estimate of 100kt was expected to support full production of 8kt pa in 2010. However recent news from Cameco indicated that Cigar Lake production will be delayed until 2011.

The implications of the unexpected delay in the Cigar Lake project cannot be underestimated. This project was expected to provide 10% of global supply.
Considering there is a 4-5 year lead time to convert uranium to a reactor fuel source, utilities require long dated contracts of at least 5 years for security of supply. This comes after the ERA announcement that FY 08 production will be 25% to 35% lower than last year's production.
Consequently, the massive spike in the uranium spot price is reflecting a significant gap in the supply horizon.

Uranium price upgrade

The prospect of a significant decline in secondary supply and the current production problems of Cameco and ERA have exacerbated the supply deficit.
In addition considering these problems and the continuing strength of the uranium market, we have upgraded our price assumptions. Our forecast for
FY08 is now US$125/lb (previously US$95/lb).

However the market is currently focusing on the recent fall in the spot price from $US138lb to $US129lb. At the same time analysts have conveniently ignored the long term price which has remained constant at its all-time high of $US95lb. In contrast, we believe the fundamentals for the uranium price have actually improved. We think this is a minor correction in a long term bull market which is providing another opportunity for the short termists to promote a negative view.

M&A activity

Unsurprisingly there was a rumour yesterday that Cameco, the world's largest uranium miner, was poised to make a takeover bid for Paladin (PDN). The delays at Cigar Lake have left a "massive hole" in Cameco's production profile and a takeover for PDN, which is currently in production, makes very good commercial sense. Subsequently PDN confirmed emphatically that no such offer had been received but interestingly Cameco made no comment. Mmmm interesting.

Paladin

Paladin is in the process of ramping up its first uranium mine, Langer Heinrich in Namibia, and is constructing its second, Kayelekera in Malawi.
Further out, there is the potential to develop the promising Mt Isa region, which PDN has recently secured through a A$1B takeover of Summit Resources.
PDN is in a unique position in the industry with an exciting growth profile exposed to the spot uranium market, whereas most of its competitors are locked into punitive long-term contracts.

The Langer Heinrich project, (aka Langer/Hayden), is located in Namibia and 40km south of RIO's existing Rossing uranium mine. The area is highly prospective, but more importantly the Government is encouraging development.
PDN has recently confirmed FY 08 production guidance of 1200tpa. Our current estimate of the mine life is 17 years which includes the Stage 2 project, and assumes a 76% conversion of current resources to reserves. Given the Heinrich mineralisation we think this is reasonably conservative.

However we believe the jewel in the crown is the Valhalla deposit. Valhalla is a large, high-grade deposit that should enable a high tonnage, long life operation near Mt Isa. The current resource is estimated at 31kt, but we think this will prove very conservative considering the ore body is open on all sides. After a proposed start up in 2H 11, Valhalla is expected to ramp up to full production of 3,465kt pa for 10 years. In addition it gives PDN access to the Bigrlyi deposit in the NT where the resource has recently been upgraded by 26% to 6400kts.

Production guidance

Paladin has recently downgraded its Langer Heinrich June 2007 half production forecast to 270klbs from 400klbs, due to problems associated with commissioning the new plant. Most of these problems have now been rectified and the company expects to meet its FY08 guidance for production of 1,200t pa.
Importantly we have not changed our long term production forecasts. We expect current production to rise 140% over the next 2 years to 2,953t in FY 10.However with first production from Valhalla in 2011 this will rise significantly. As a result we expect PDN to become a top 10 global producer.
 
Re: PDN - Paladin Resources


Largely unhedged

PDN has already committed 50% of Stage I production to a long term contract at $US60lb with an escalator for price participation above $US80lb. This is well above the legacy contracts for the incumbent producers of $US15-25lb.
However the other 50% of production is expected to be sold into the spot market where the current price has risen to $US129lb. Consequently PDN is totally unhedged, and fully leveraged for 50% of production at the spot price. As a result, PDN is in a very advantageous and highly profitable position compared to the global peer group.

While the market agonises over the small decline in the spot uranium market we think analysts are overlooking two very important issues. PDN is a current producer with an increasing production profile in a global market where supply is becoming increasingly constrained and demand is accelerating rapidly. Secondly PDN's production is 50% unhedged providing a unique opportunity to lock in current prices which have risen from just $US 25 less than 2 years ago. The global mining consolidation is about scale and leverage and clearly PDN has both.

Valuation and 12 month target

Our analyst Rob Bishop on a base case, values PDN's "non-producing"
resources, other than Langer Heinrich, at US$7/lb which is just 15% of our long term price is $6.57. However using a US$12.50/lb figure based on prices paid for recent transactions in the uranium industry, our upside valuation increases to A$9.74 supporting our 12 month target of $10.00.

However on a global consolidation of the industry I think the takeover price would be in excess of $12.00. PDN is a serious company, with some very serious credentials, however it appears that institutional investors are viewing PDN with the same scepticism they previously viewed FMG. All I know is that through time perceptions change. PDN will either be re-priced to reflect its unique position, or will be re-priced by a corporate. I suspect the latter is more likely. PDN is a strong buy.
 
Re: PDN - Paladin Resources

Fab, please cite your sources or they will be removed.

Who wrote this and where did it come from? Please provide a link if possible.
 
Re: PDN - Paladin Resources

Joe Blow said:
Fab, please cite your sources or they will be removed.

Who wrote this and where did it come from? Please provide a link if possible.
Click to expand...

Eureka report is the source and I believe the person who wrote it is Charlie Aikens. Very good article by the way
 
Re: PDN - Paladin Resources

Looks like PDN is on target from the latest annoucement a bit of a delay but still a rare producer in the U mining industry. Plus more mining on their way. Also there appears to be a lot of support around $7.50. Sounds good for this one to bounce back
 
Re: PDN - Paladin Resources


a lot of shares went thru this arvo in a few minutes, so someones buying in quick at lows.
pressed the price down to mid 720's.
seemed strange after a reasonably good report from their langer plant.
a wild day for the shares. varied from -2% to +3%
 
Re: PDN - Paladin Resources

Indeed a lot of volume on this one and the SP is plunging. Surprising as the announcement was good. Also this might get some interest from company looking at buying PDN and the low 7 are very cheap for PDN as a producer.
 
Re: PDN - Paladin Resources

Fab

thanks for posting the article. sounds good. PDN has really struggled and consolidated and struggled since the Feb correction.

the sprice hasn't really reflected its fundamentals - the quality of its assets.
 
Re: PDN - Paladin Resources

purple said:
Fab

thanks for posting the article. sounds good. PDN has really struggled and consolidated and struggled since the Feb correction.

the sprice hasn't really reflected its fundamentals - the quality of its assets.
Click to expand...

Still...how confident are you that the $7.40 support will hold up??

As Kennas says, its like catching falling daggers. Paladin is still in a very big downtrend, so perhaps we will see some sideways action if the support does hold up.
 
Re: PDN - Paladin Resources

Go Nuke said:
Still...how confident are you that the $7.40 support will hold up??

As Kennas says, its like catching falling daggers. Paladin is still in a very big downtrend, so perhaps we will see some sideways action if the support does hold up.
Click to expand...

Indeed the downtrend has to stop first. Very surprising to me that PDN is actually in a downtrend so any explanation would be welcome?
 
Re: PDN - Paladin Resources

Paladin Resources Ltd is an Australian listed company involved in the mineral resource sector with projects both in Australia and Africa. Paladin has adopted a dual strategy for creating wealth for its shareholders from its uranium assets and its proprietary database. The resource arm of Paladin has a strong emphasis on uranium. With the recent acquisition of the Langer Heinrich Uranium Project.
Low volume on todays decline only positive so far
 

Attachments

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Re: PDN - Paladin Resources

Wow, dline, great find. I haven't seen this stock before, thanks for introducing it to us!! Looks like a goer!

Strong emphasis on U?
Recent acquisition of LH?

..decline only positive...?????

What the???
 
Re: PDN - Paladin Resources


Where did you get that graph from? and at what support point should PDN bounce back up?? I still believe this is unusual downtrend for PDN.
 
Re: PDN - Paladin Resources

uauhauhahauhaa! Wait a second - Paladin eh?

What exactly is it these white knights of the west do?
 
Re: PDN - Paladin Resources

Fab said:
Indeed the downtrend has to stop first. Very surprising to me that PDN is actually in a downtrend so any explanation would be welcome?
Click to expand...

There has been a production downgrade. Following is an extract from FNarena today.

--------------------------------------------------------------------------------

Paladin Production Downgrade Concerns Analysts
FN Arena News - July 31 2007

By Greg Peel

If there is a common belief among resource analysts it is that markets tend to get carried away with the valuation of start-up projects, without giving sufficient regard to the teething problems that invariably occur. Paladin Resources (PDN) much feted Langer Heinrich uranium project was never going to be an exception. But in the wider story of uranium demand/supply fundamentals and the euphoria surrounding the market, teething problems in Namibia were something that could possibly be pushed to the background.

Paladin's sensational run has been all about the fact the uranium price has soared and is expected to rise further, and about the fact that Paladin actually has a uranium resource and the go-ahead to mine it, unlike many of the sought after juniors in the Australian uranium space. When the Paladin share price first passed $10 the company had not yet mined a jot, and while it was clear the uranium price would keep heading north it seemed that was already in the market's valuation. Paladin may well have pulled back on its own merits, but given its heavy dilution to acquire most of the still restricted Summit Resources there was enough of a pullback catalyst anyway. And now the uranium price has pulled back some as well, which is hardly a shock.

So in this environment it was time to turn to stark reality, and that is that Paladin actually has to pull the stuff out of the ground, process it and ship it. Early set-backs were encountered, but these never bothered the analysts as that is exactly what they were expecting. This latest production downgrade has, however, bothered the analysts.

Paladin's "drummed" production (ie U3O8 mined, processed and put in a drum) to June 2007 was 119,586lbs. This compares to 200,000lbs guidance, and occurred as a result of a dryer problem late in June. This is not a downgrade on actual ore - it just means there are now stocks retained waiting to reach the drummed stage. It does mean however that Paladin's new FY08 production guidance is only 2.2Mlbs compared to a previous 2.6Mlbs.

This downgrade is more than analysts had otherwise factored in for the Langer Heinrich ramp-up. It has sparked a raft of profit downgrades (as much as 48% in FY08 from UBS) although analysts are allowing some scope for Paladin to catch back up. But what it has also done is evoked a drop in confidence.

Macquarie analysts summed up a general feeling in saying "we are not yet alarmed, but certainly more than a little concerned". Deutsche Bank notes that as late as June 13 management suggested "essentially the project is achieving design throughput". But it hasn't, and Macquarie suggests previous flow-sheet modifications have not been as successful as hoped.

At the end of the day, the bulls remain bullish, with UBS (Buy) and Deutsche Bank (Buy) both citing their longer term positive view on uranium. GSJB Were (Sell) believes the production problems seem quickly solvable but the broker remains concerned that the stock is overvalued. Macquarie (Neutral) is remaining in cautious mode and has issued a warning to investors in all uranium juniors that uranium is not an easy game, and that operational delivery, project development timing and valuation metrics provide short, medium and long term risks respectively for all uranium plays.

A wary Macquarie has dropped its target from $9.30 to $7.75, while Deutsche has moved from $10.00 to $9.12, UBS from $11.00 to $10.70 and Weres has stayed put at $7.79.

ABN Amro, where are you? The average target in the FNArena database now sits at $9.49 (stock price down more than 3% this morning to $7.19) and the B/H/S ratio is 3/1/1 but ABN has not piped up since April and it has a Buy with a $12.10 target. Take that out, and the average is $8.84.



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