Uranium miner Paladin makes $US40m loss Yahoo 7 Finance AAP , 15 Nov 13 Uranium miner Paladin Energy made a $US40 million loss in the three months to September as uranium prices remain low…….Its average realised uranium sales price for the September quarter was US$41.38 per pound, as the spot price trades around eight year lows. Paladin is looking to sell a stake in the Langer Heinrich mine. It is also cutting jobs and costs in response to falls in the price of uranium.
Archive for the ‘Paladin’ Category
Drastic loss for Paladin uranium miner
December 29, 2013Australian uranium company Paladin lurches from failure to failure
December 29, 2013Paladin chief calls for investor calm The Age, November 4, 2013 Peter Ker Resources reporter Paladin Energy chairman Rick Crabb has urged shareholders to cool their lust for executive scalps at the troubled uranium miner, saying that succession planning was in train and that board changes would be counterproductive while an asset sell-down was under way.
Mr Crabb and his managing director, John Borshoff, have been under extra pressure in recent times on the back of shareholder anger at the company’s direction.
An Asian hedge fund has been leading a group of Paladin shareholders that are trying to remove Mr Crabb and Mr Borshoff, and their rebel cause has been helped by proxy adviser ISS, which last week called for shareholders to reject a dilutive share placement that Paladin made in August.
The pressure is likely to continue before this month’s annual meeting, with the Australian Shareholders Association set to agree with ISS, plus name Mr Crabb at the top of its list of ASX chairmen who should stand down……..
Paladin failed to sell a stake in its Langer Heinrich mine in the September quarter, and Mr Crabb said sale negotiations were still under way, making it a bad time to overhaul the board…..
The ASA disagreed, with chairman Ian Curry saying that Paladin had not once delivered a dividend to shareholders since it started trading in 1994, yet had imposed billions of dollars worth of losses. : http://www.smh.com.au/business/paladin-chief-calls-for-investor-calm-20131103-2wusp.html#ixzz2jiZEkGKl
Uranium is a no go for investors
December 29, 2013Of course, the nuclear lobby is well-heeled and has its silver-tongued apologists who will do their best to discredit such stories. Beyond the despicable aspects of this, you should consider, from an investment point of view, the risk that the industry loses control of the public relations battle as more stories emerge – and legal consequences ensue……uranium stocks are a no-go as a long-term investment.
Meltdown Coming? The Uranium Story You Haven’t Heard Money Morning 27 November 2013 by Chris Mayer “……You remember the nuclear disaster at Fukushima? It was a horrible human tragedy that is still playing out – and in ways I am sure you will be surprised to learn.
The disaster also set back the so-called nuclear renaissance that was then in swing. Uranium prices fell like a piano tumbling down a flight of stairs, only recently crashing down to five-year lows and laying waste to uranium stocks.
But it’s been over two years since the meltdown at Fukushima, and memory is short. Here is Barron’s over the weekend, on its optimistic appraisal of Cameco, the world’s largest publicly traded producer of uranium:
‘Cameco shares recently rallied after stronger-than-expected third-quarter earnings, but are still flat for the year. They fetch just 15.2 times what the company has earned, well below its decade median of 24 times, and the low-cost producer generated net profit margins near 22% even when uranium prices slumped. Improving prices can only energize the stock.‘
Among the ‘reasons for optimism‘, Barron’s included ‘gradual progress toward the cleanup in Japan‘.
Barron’s piece inspired me to write to you today. As a long-term investor, I am not tempted – at all – by the apparent bargain in uranium stocks.
I want to preface what follows by saying I get the bullish case for uranium and nuclear power. I was a bull for a time and took positions in uranium stocks in February 2010, just before they started to lift.
The incident at Fukushima made me reverse course. We sold our uranium stocks in March 2011, shortly after the disaster. We took a 70% gain on Kalahari and saved a slim 7% profit on Paladin Energy. Kalahari got bought out and no longer trades. But Paladin, which I recommended selling at $3.29, is today 44 cents. In C&C, I also saved a 10% gain on Cameco and sold at $30. Today, it’s $20.
As good as the uranium story sounds, I think there are bigger reasons to avoid the stocks as anything other than trades.
First, because the disaster at Fukushima could easily have an Act II that could be worse than anything we’ve seen so far.
The cleanup is not front-page news, but perhaps it should be……… the biggest threat is from No. 3.
The spent fuel rods weigh 400 tons and are packed tightly together like cigarettes. They hold the radiation equivalent of the atomic bomb that went off at Hiroshima — times 14,000.
They now sit in a damaged, tilting building, which is vulnerable to collapse. They must be removed. If they hit each other or break, they could explode and release massive amounts of radiation. They might have to evacuate Tokyo in such a case…………
Aside from the terrible human costs of such an event – which I do not want to minimise – what do you think it would do to uranium stocks?
Besides, there are still ongoing effects of the disaster we are only now beginning to understand. See, for example, recent headlines about the damaged thyroids of California babies exposed to radiation that traveled 5,000 miles across the Pacific.
Of course, the nuclear lobby is well-heeled and has its silver-tongued apologists who will do their best to discredit such stories. Beyond the despicable aspects of this, you should consider, from an investment point of view, the risk that the industry loses control of the public relations battle as more stories emerge – and legal consequences ensue.
The second reason I don’t want to own uranium stocks long term: Because there is certainly another Fukushima, another Three Mile Island, in the deck. We just don’t know when it will turn up. Just look at the US, which produces more nuclear energy than any country on Earth. It has over 104 reactors. Most of them are old. Twenty-four of them have the same design at the Fukushima reactors.
The late Alexander Cockburn and Jeffrey St. Clair, again in CounterPunch, wrote in 2011 about the number of aging reactors on US soil, several that sit on fault lines. They walk through a number of them, citing the age of the plants, past incidents and the potential for disaster………..
Human beings make many mistakes. We are a disaster-prone species, as any casual review of our bloody, imbecilic history will show. As an investor, is it not wiser to assume things will not go according to plan? Doesn’t it seem better to assume that bad things will happen? And with nuclear power, we have clear potential for such errors, not to mention a record of rare but devastating disasters. Timing is the only thing that is uncertain.
If you adopt this kind of thinking, then uranium stocks are a no-go as a long-term investment. http://www.moneymorning.com.au/20131127/meltdown-coming-the-uranium-story-you-havent-heard.html
No real confidence in ERA’s and Paladin’s uranium market prospects
October 31, 2013Little optimism in uranium market http://finance.ninemsn.com.au/newscolumnists/greg/8739108/little-optimism-in-uranium-market 15 Oct 13 Olympic Dam is Australia’s largest uranium source but outside of the diversified resource conglomerate that is owner BHP Billiton, Australia’s two “big” pure-play uranium producers are Energy Resources of Australia, operating in the Northern Territory and Paladin Energy operating in Namibia.
ERA has become basically a binary trade as an investment stock. Having been devastated by floods over past years, ERA’s sole Ranger Mine has been undergoing rehabilitation ever since above ground. That rehab is ahead of time and budget, but ERA’s fortunes depend entirely on whether or not the company decides to proceed with the Ranger Deeps underground mine. If so, well and good, if not, goodnight. In the meantime ERA is simply processing stockpiled ore.
The story is different for Paladin. Once the great Australian uranium hope, Paladin is continuing to burn cash at current uranium prices. The company’s latest quarterly production report showed prices received above spot, but lower than forecast production due to an extended maintenance shutdown at the Kayekalera development. Having already raised fresh funding, Paladin can only pray for a rebound in uranium prices sooner rather than later.
There is little reason for Paladin to feel confident. At the International Uranium Fuel Seminar held in Texas last week, the tone was less than optimistic for uranium sellers, industry consultant TradeTech reports. The international uranium market is currently in balance on a demand-supply basis, despite the Russian HEU agreement coming to a conclusion. Japanese reactor restarts remain the swing factor, but even then there is no great expectation of a significant price rebound given any price improvement will only be met with increased production.
A total of four transactions totalling 400,000 pounds were concluded in the spot market last week, TradeTech reports, and the year to date spot transactions total of 32.2mlbs is ahead of the 23.8mlbs booked by this time last year. Yet there has been little joy in pricing terms, with the consultant’s weekly spot price indicator unchanged on US$35.25/lb.
One US utility looking for 1.3mlbs in the term market selected a supplier last week, and several other term buyers are evaluating offers. The term market is more active than the spot market at present, but TradeTech’s price indicators remain at $38/lb (mid) and US$51/lb (long).
uranium investing has lost its glow
October 31, 2013The price fall that started six years ago could continue, especially with major new reserves being readily discovered in Australia and Africa. And it seems nuclear incidents are never too far away.
Those holding shares in uranium companies, or considering them, should handle them with great care.
Uranium best handled with care TONY KAYE THE AUSTRALIAN OCTOBER 05 IT isn’t all about Japan, Iran, the “China syndrome”, or even the swarm of moon jellyfish that forced a shutdown this week of all three reactors at Sweden’s Oskarshamn nuclear plant.
But the cold reality of the meltdown afflicting the uranium sector globally was best demonstrated on Wednesday when Australian group Paladin Energy announced it was slashing its operating costs across the board in the face of a further weakening in the spot price of the nuclear fuel it mines in southern Africa. (more…)
Investment analysts downgrade Paladin Energy
October 31, 2013Translating business language – “outperform” – means good to invest. “Sector Perform” mean s not so good
Outperform. The stock’s total return is projected to exceed the average return of the industry (or its sector or its peers). This means the stock will perform better than the competition and is likely rated a “Buy”.
Sector Perform). The stock is expected to perform in line with the average return of the market or sector or its peers. Similar to a “Hold” or a “Neutral” rating.
Paladin Energy Limited Downgraded to Sector Perform at RBC Capital (PDN) North fork vue.com October 2nd, 2013 Paladin Energy Limited (ASX:PDN) was downgraded by investment analysts at RBC Capital from an “outperform” rating to a “sector perform” rating in a note issued to investors on Wednesday, American Banking News reports. They currently have a A$0.80 ($0.75) price target on the stock……..
A number of other analysts have also recently weighed in on PDN. Analysts at TD Securities cut their price target on shares of Paladin Energy Limited (ASX:PDN) from A$0.90 ($0.84) to A$0.65 ($0.61) in a research note to investors on Friday, August 30th. They now have a “hold” rating on the stock. Separately, analysts at BMO Capital Markets cut their price target on shares of Paladin Energy Limited (ASX:PDN) from A$0.80 ($0.75) to A$0.60 ($0.56) in a research note to investors on Friday, August 30th. Finally, analysts at Raymond James downgraded shares of Paladin Energy Limited (ASX:PDN) from an “outperform” rating to a “market perform” rating in a research note to investors on Monday, August 5th. Three equities research analysts have rated the stock with a hold rating and one has issued a buy rating to the stock. The stock presently has an average rating of “Hold” and a consensus price target of A$0.96 ($0.90).
Paladin Energy Ltd (ASX:PDN) is a uranium production company with projects in Australia and two operating mines in Africa. http://www.northforkvue.com/finance/10712/paladin-energy-limited-downgraded-to-sector-perform-at-rbc-capital-pdn/
Paladin Energy’s cost cutting exercises
October 31, 2013Paladin cuts top-echelon base salaries, overall spending amid low uranium price TIMES COLONIST OCTOBER 2, 2013 PERTH, Australia – Paladin Energy Ltd (TSX:PDN) is cutting the base salaries of its board and management by 10 per cent as part of cost-saving measures due to low spot prices for uranium — its main commodity.
In total, the miner — which lists its shares on the Toronto and Australian stock markets — is aiming to reduce cash costs for its 2014 financial year by US$23 million.
The cuts include a $10.8-million reduction in spending on overhead and exploration and a US$12.4-million reduction in discretionary capital spending at two mines in southern Africa….The Langer Heinrich mine in central Namibia will see its capital spending cut by US$10 million compared with the 2013 financial year while a further $2 million will be cut from the capital budget for the Kayelekera mine in Malawi. http://www.timescolonist.com/business/paladin-cuts-top-echelon-base-salaries-overall-spending-amid-low-uranium-price-1.645930
Uranium market collapse bad for Paladin Energy
October 31, 2013The industry hopes that reactor restarts in Japan will improve the situation − but restarts will be slow and in many cases strongly contested. The industry hopes that new build in China will improve the situation − but pre-Fukushima nuclear growth projections have been sharply reduced and China now plans to approve a “small number” of new reactors projects each year.
Uranium price slumps, Paladin Energy in trouble Jim Green WISE/NIRS Nuclear Monitor #768, 27 Sept 2013 The spot uranium price fell to US$34.50 / lb U3O8 in late July, a price not seen since December 2005 during the upswing of a spectacular price bubble which peaked in June 2007 at US$138 / lb. The 12% price slump in July was the biggest monthly loss since March 2011. Since September 2, the spot price has been still lower, at US$34.00. Those prices are just over half the spot price of US$66.50 / lb on 11 March 2011, the first day of the triple-disaster in north-east Japan.[1]
The long-term contract price has been reasonably stable in recent months at US$57 / lb. At that price, the value of annual global uranium requirements for power reactors is around US$10 billion.
FNArena wrote on September 17: “The issue of low uranium prices discouraging new supply is not just one of the spot price itself but one of the marginal cost of new supply. Producers suggested to Ux that the average marginal cost of production of operating mines is around where the spot price is now, but the marginal cost of developing a new mine is more like US$65-70/lb. From the nuclear energy prospective, respondents rated the most significant demand-side influences as, in descending order of influence, Japanese reactor restarts, Chinese reactor build, the premature shutdown of older US reactors and the emergence of newcomer countries to nuclear energy (about equal), and the upcoming French nuclear licence renewals.”[19]
Raymond James analyst David Sadowski expects an average spot price of $40 per pound this year, $52 in 2014, and $70 in both 2015 and 2016.[2] Michael Angwin from the Australian Uranium Association expects low prices until about 2017/18, and a nasdaq.com article states that “the road to recovery for this battered commodity will be a long haul”.[3,4] Rob Atkinson, outgoing CEO of Energy Resources of Australia, says the uranium spot price is woeful, making it extremely difficult to make the case for developing a new mine, and the market will remain difficult for at least another two years.[21]
The industry hopes that reactor restarts in Japan will improve the situation − but restarts will be slow and in many cases strongly contested. The industry hopes that new build in China will improve the situation − but pre-Fukushima nuclear growth projections have been sharply reduced and China now plans to approve a “small number” of new reactors projects each year.[5]
The industry hopes that the end of the US-Russian ‘Megatons to Megawatts’ program − downblending highly enriched uranium from weapons programs for use in power reactors − will improve the situation. But mine production has met an increasing proportion of demand in recent years − 78% in 2009 and 2010, 85% in 2011 and 86% in 2012 (the shortfall was around 10,000 tonnes of uranium in 2011 and 2012).[6] This suggests that the end of the Megatons to Megawatts program will have a moderate impact. There is scope for weapons material to continue to supply the civil market regardless of future bilateral US-Russian agreements.[7] Ux Consulting noted last year that reduction in demand stemming from the Fukushima accident “essentially negates much of the reduction in supply resulting from the end of the US-Russia HEU deal”.[8] Utilities have built up uranium stockpiles in recent years as a result of low uranium prices (the World Nuclear Association estimated commercial inventories totalling 145,000 tonnes of uranium in 2010 − enough to supply global demand for two years).[9]
Jeb Handwerger, described by Uranium Investing News as a “uranium bull and stock guru”, says that “Smart money recognizes the bottom.”[10] But smart money is heading for the door. At the Paydirt Uranium Conference in February 2012 in Australia, it was clear many companies were looking elsewhere, prompting an industry veteran to quip that copper and gold had never before enjoyed so much airtime at a uranium conference.[11] A year later, attendance was so poor that the conference was reduced from two days to one day and shifted from the Hilton Hotel to a less opulent venue.
Uranium gloom and doom is also being felt in the enrichment sector. Urenco posted a 45% drop in revenue for the first half of 2013 and a 31% fall in earnings (compared to the first half of 2012). Revenue fell to 384 million euros and earnings dropped to 319 million euros. Urenco said it expects a “substantial rebalance” during the second half of the year due to continued capacity expansion in its US facility and the construction of a new unit in the UK. The UK government owns one third of Urenco, as does the Dutch government, with the final third held by German utilities E.On and RWE. All the owners have been looking to sell their stakes but have so far failed to secure a deal.[20]…..
References:
[1] www.infomine.com/ChartsAndData/
[2] www.edmontonjournal.com/business/Lamphier+Uranium+producers+singing+blues/8770941/story.html
[3] https://informaaustralia.wordpress.com/2013/08/05/the-future-of-uranium-nuclear-energy-in-australia/
[4] www.nasdaq.com/article/uranium-prices-finding-a-bottom-cm267210
[5] www.world-nuclear-news.org/NP_Chinas_emerging_nuclear_power_policy_2410121.html
[6] www.world-nuclear.org/info/Nuclear-Fuel-Cycle/Mining-of-Uranium/World-Uranium-Mining-Production
[7] www.mineweb.com/mineweb/content/en/mineweb-uranium?oid=175742&sn=Detail
[8] www.uxc.com/products/rpt_usa.aspx
[9] www.wna-symposium.org/pdf/2011_Fuel_Market_Report_Summary.pdf
[11] www.theage.com.au/business/uranium-sector-does-it-tough-20120309-1upy3.html
[12] http://au.news.yahoo.com/thewest/a/-/breaking/18043640/uranium-industry-in-crisis-borshoff
[14] www.businessweek.com/news/2013-08-01/paladin-to-sell-shares-after-dropping-uranium-mine-stake-sale
[16] www.miningnews.net/storyview.asp?storyid=801570952
[17] www.theage.com.au/business/paladin-still-paying-price-of-uranium-freeze-20130830-2sw6c.html
[18] www.afr.com/p/business/resources/energy/paladin_to_boost_production_and_v3UP706brxBjdnjGlBHApK
[19] www.fnarena.com/index2.cfm?type=dsp_newsitem&n=958A1B64-CE96-B1FD-3FF4394EC99F9F0A
[20] www.cityam.com/article/1378857855/nuclear-firm-urenco-track-year-despite-45pc-fall-revenue
Australia’s uranium miners face gloomy future if Japan does not restart nuclear reactors
October 31, 2013Japan goes nuclear-free The Motley Fool, By Justin Loiseau – September 16, 2013 Japan is closing down its last operating nuclear reactor for scheduled maintenance, putting the country in “nuclear-free” territory for the first time since the Fukushima crisis necessitated nationwide inspections two years ago. Japan has 50 commercial reactors nationwide, and the March 2011 Fukushima disaster marked the first time in over 40 years that the country pulled power exclusively from non-nuclear sources.
Japan is split on the future of this fuel. While Prime Minister Shinzo Abe and utilities point to the need for nuclear to meet Japan’s growing energy demands, the general public and environmental activist groups remain apprehensive about the safety of local reactors.
Japan and Australia may be oceans apart, but the two countries are closely linked. Energy Resources of Australia (ASX: ERA) is one of the largest uranium producers in the world, the secret sauce of nuclear reactors. Rio Tinto (ASX: RIO) has a 64% stake in the company as well, and Japan’s exit from nuclear could push prices down drastically if it bids adieu indefinitely. Paladin Energy (ASX: PDN) and its 82%-owned Summit Resources(ASX: SMM) subsidiary tell a similar story. Spot prices have already dropped from $65 highs in 2011 and are currently hovering around $35, similar to 2006 markets.
Japan’s nuclear notions are unclear, and proponents of the energy have warned of blackouts if the country doesn’t jump back on the nuclear track. Opponents, including Greenpeace Japan, are instead pushing Japan to seize the opportunity to become a leader in renewable energy.
Regardless of the ultimate outcome, this latest nuclear shutdown is another bump in the road (read “increased risk”) for nuclear energy and its uranium producers……http://www.fool.com.au/2013/09/16/japan-goes-nuclear-free/
Dire market forecast for Paladin Energy, and uranium market as a whole
September 14, 2013Japan’s nuclear energy intentions are the swing factor at present. … if Japan does not start turning back on more reactors, Japanese uranium stockpiles will continue to hit the market to pay for increased fossil fuel imports. Nor is it helping at present that the US is also talking about turning off reactors.
Meanwhile, traders and speculators stuck with material and producers suffering cash flow problems are ever more desperate to offload material.
No rush to buy uranium, 9 News Finance by FN Arena 2 Sept 13, The spot market for uranium was never of much interest until the big surge took prices up well over US$100/lb in 2006. In that era, legacy contract obligations at much lower prices impacted on the earnings potential of the large and long-established players, such as Energy Resources of Australia in Australian terms, while new kids on the block, such as Paladin Energy relished the opportunity to secure contracts at more spot-aligned pricing.
Fast forward to the post-Fukushima era of 2013 and the tables have turned. Those noughties contract obligations have largely run off and the uranium price is wallowing in the depths. Lower cost, long-established producers such as BHP Billiton can at least bungle along (ERA has had its own specific production issues) while the high-cost later entrants are struggling to stay afloat. Paladin is the classic example.
It is interesting to recall that back in the uranium bubble period, one supportive argument for pricing into the future was that of the ultimate completion of the US-Russian HEU (highly enriched uranium) agreement, known as “Megatons to Megawatts”. Back in 2006 analysts were looking ahead to 2013 when the dismantling of Cold War surplus nuclear warheads and subsequent shipment of enriched uranium to the US for energy purposes was due to come to an end, highlighting the big supply hole the world would fall into at that time. No one, back then, could foresee Fukushima or its subsequent impact on the uranium price, although increased mine supply was always expected given then attractive uranium prices.
Well, history was made last week when the final shipment of Russian warhead uranium left the plant en route for St Petersburg for shipment to the US. And that’s how it ends: not with a bang, but with a whimper. Industry consultant TradeTech’s spot price indicator fell US$1.00 to US$34.00/lb last week.
The Cold War means little in 2013, despite 2006 expectations that it would. Japan’s nuclear energy intentions are the swing factor at present. China’s reactor-building program provides underlying support for global uranium demand, but if Japan does not start turning back on more reactors, Japanese uranium stockpiles will continue to hit the market to pay for increased fossil fuel imports. Nor is it helping at present that the US is also talking about turning off reactors.
There is hence no rush from end-users of uranium, the utilities, to jump in and buy uranium supplies. Not at spot anyway. Utilities can pick around the edges at low prices but in terms of meaningful supply, contracts for 2014 delivery are of more interest and even then there’s no great rush. Meanwhile, traders and speculators stuck with material and producers suffering cash flow problems are ever more desperate to offload material….. http://finance.ninemsn.com.au/newscolumnists/greg/8717126/no-rush-to-buy-uranium
uranium news 