Paladin Turns A Profit In Q4

After a lean 2008, Paladin Energy (PDN-T) is beginning to reap the benefits of its recent constructive history. The Perth, Australia-based uranium miner has managed to get two uranium mines into production in Africa over the last five years and that industriousness is now moving the company out of the red.

While net profit for the miner came in at just US$400,000 for the fourth quarter, that sum is a vast improvement from the net loss of US$470.8 million recorded in the final quarter of 2008.

For the entire second half of 2009 the company still recorded a loss of US$19 million, but when compared to its US$475.6-million loss for the last six months of 2008, the outlook is promising.

Paladin built up the heavy losses in 2008 owing to high capital expenditures at its Langer Heinrich uranium mine in Namibia and its Kayelekera uranium mine in Malawi.

Its recent financial turnaround, however, comes on the heels of record U₃O₈ production from those very mines. Paladin turned out a total of 987,310 lbs. of U₃O₈ for the quarter compared to 673,982 lbs. for the same period last year, and 1.7 million lbs. for the second half, up from 1.3 million lbs. for the second half of 2008.

Both production levels mark a record in the company’s production history. Along with more production came increased efficiencies, which brought cost of sales for the second half down to US$26 per lb.

The increase came, in part, from the Langer Heinrich making it to Stage 2 production levels in the last quarter. That gave the mine a 36% increase in production over the quarter previous.

Paladin says stage 3 construction, which will bring total production for the mine to 5.2 million lbs. per year, is under way.

But the company doesn’t plan to stop there. Paladin is also considering a fourth stage that would up annual production to 10 million lbs. per year. A feasibility study on the stage 4 is currently underway.

As for Kayelekera, Paladin reports that production ramp-up was slower than expected. It says, however, that production is improving thanks to recent design upgrades. Kayelekera has 12.6 million tonnes of reserves grading 0.105% U₃O₈ for 29.3 million lbs. and a measured and indicated resource of 22.2 million tonnes grading 0.08% U₃O₈ for 39.1 million lbs. of U₃O₈.

Langer Heinrich has a measured and indicated resource of 56.4 million tonnes grading 0.06% U₃O₈ for 72.4 million lbs. of U₃O₈.

Paladin finished 2009 with US$432.6 million in cash.

In Toronto on Feb. 11 — the day its financial results were released — the company’s shares finished 3% or 11¢ higher at $3.62 on 3.6 million shares traded. The company has 717 million shares outstanding.