A Unique Platform Positioned for the Future John Borshoff – Managing Director/CEO BMO Capital Markets 2015 Global Metals & Mining Conference, Miami 22-25 Feb 2015
Disclaimer and Notes for JORC and NI 43- 101 Mineral Resources and Ore Reserves This presentation includes certain statements that may be deemed “forward-looking statements”. All statements in this presentation, other than statements of historical facts, that address future production, reserve or resource potential, exploration drilling, exploitation activities and events or developments that Paladin Energy Ltd (the “Company”) expects to occur, are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, and continued availability of capital and financing and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Readers should not place undue reliance on forward-looking information. The Company does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise. In the following presentation, for those deposits that are reported as conforming to the Joint Ore Reserves Committee (JORC) 2004 or 2012 code, the terms Inferred Mineral Resources, Indicated Mineral Resources, Measured Mineral Resources, Ore Reserves, Proved Ore Reserves, Probable Ore Reserves and Competent Person are equivalent to the terms Inferred Mineral Resources, Indicated Mineral Resources, Measured Mineral Resources, Mineral Reserves, Proven Mineral Reserves, Probable Mineral Reserves and Qualified Person, respectively, used in Canadian National Instrument 43-101 (NI 43-101). The technical information in this presentation that relates to Exploration Results, Mineral Resources and Ore Reserves is based on information compiled by David Princep B.Sc. and Simon Solomons B.E., both of whom are Fellows of the Australasian Institute of Mining and Metallurgy. Messrs Princep and Solomons each have sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that they are undertaking to qualify as Competent Persons as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”, and as Qualified Persons as defined in NI 43-101. Messrs Princep and Solomons are full-time employees of the Company and consent to the inclusion of the relevant information in this announcement in the form and context in which it appears. Previous tonnages, grades, assays and other technical data relating to the Oobagooma deposit are taken from historical records prior to the implementation of the current NI 43-101. While the data is believed to have been acquired, processed and disclosed by persons believed to be technically competent, they were estimated prior to the implementation of NI 43-101 and are therefore regarded as historical estimates for the purposes of NI 43-101 and as an exploration target for the purposes of JORC disclosure. A Qualified Person as defined in NI 43-101 has not done sufficient work to classify the historical estimate as current Mineral Resources. The Company is not treating the historical estimates as current Mineral Resources as defined in NI 43-101 and for this reason the historical estimates should not be relied upon. At present, the Company considers that these resources have no equivalent classification under NI 43-101 and should therefore be considered as unclassified. The historical information is presented on the basis that it may be of interest to investors. 2
Presentation Outline Key Achievements and Update Uranium Market Project Update Positioned for the Future 3
Paladin: A Unique Platform Positioned for the Future Paladin is the world’s only independent pure Who is Paladin? play uranium producer • World’s top seven producer, mkt cap ~ US$525M Mlb • Employs 1,100 staff and contractors Rest of World 27.4 • Only substantial new producer to emerge in the past 30 years Share of production • Total production approaching 38Mlb U 3 O 8 (2007 ‐ 2014) from majors • Head office in Perth KazAtomProm 24.5 What is its track record? • Only company to have successfully developed two greenfield Areva 23.5 conventional mines in past 20 years • First of kind technical innovation at Langer Heinrich (alkaline leach) Miner with Government Ownership Cameco 23.5 upstream and Kayelekera (resin ‐ in ‐ pulp) has given Paladin competitive assets advantage • Invested $1.5bn in project pipeline via acquisition and organic growth ARMZ/Uranium One 21.4 • Assembled and preserved a strong technical team with expertise across all aspects of the uranium business Rio Tinto 11.8 Diversified Strong partnerships created miners BHP Billiton 8.8 $200mm prepayment agreement 25% asset JV of its flagship Langer Henrich Mine Paladin 8.0 Cornerstone investor in 2014 placement and largest shareholder Navoi 6.2 83% of production from top 8 producers but produce ~90% of the global production (2013 production) 4
5 5 Project Locations – A Global Footprint
Material Achievements have De-Risked Paladin KEY FOCUS AREAS - WE ARE TICKING THE BOXES Achieve strong Deleverage the Establish Take advantage operational balance sheet sustainable of future price Key Paladin Achievements performance cash flows resurgence Significant ongoing cost reductions and (2012-15) production optimisation at LHM Long term sales deal with EdF, a leading global (Aug 12) nuclear utility (US$200M prepayment) LHM and KM project finance refinancing - (Jan 14) US$60M KM care & maintenance, leading to cost reduction / asset preservation (US$35M saving (Feb 14) over 2 years) Michelin M&I Resource increased by 25% and (May 14) open pit M&I grades increased by 36% Minority equity stake sale in LHM (US$190M) and establishing a successful partnership with (July 14) CNNC, a major Chinese nuclear utility Strategic investor & entitlement offer (US$170M) (Dec 14) Up to US$150M CB issue & US$300M Tender (Feb 15) Offer DRAFT – PRIVATE & CONFIDENTIAL 6
Financial Status December 2014 Half Year Balance sheet strengthened — initiatives to de-risk the balance sheet have been successful, boosting cash balances to US$334M in half year (and to US$484M post US$150M CB) — net debt decreased by 48% to US$305.6M — gearing ratio down to 40% from 58% June 2014 Gross profit of US$3.9M (2013*: gross loss of US$29.3M) — gross US$ C1 costs for the half year were 5% lower than 2013* — admin, marketing and non production costs of US$10.2M, 23% on 2013* — total exploration expenditure of US$3.1M, 14% on 2013* Cost reduction and optimisation initiatives ongoing — FY15 corporate costs cut by US$2.4M, 17% over FY14 (in addition to US$7.4M reduction over FY13) — FY15 exploration costs cut by US$1.0M, 12% over FY14 — executive/senior management 10% pay reduction extended for another 12 months — targeting gross US$ C1 cost reductions of 6% over FY15 *references to 2013 are to the equivalent six months ended 31 December 2013 7 7
US$300M CB Tender Underway (ready to capitalise with stronger balance sheet) Previous uncertainty around US$300M CB repayment has overshadowed Paladin’s business case in recent times undue pressure on Paladin share price — taken the focus away from Paladin’s achievements, positioning and quality asset pipeline — potential strategic partners have wanted to see a solution — New US$100M CB with potential US$50M upsize provides essential de-risking and related benefits 7% coupon, 25% premium, 5 year vanilla CB — surplus cash out to 2017 post full repayment of $300M CB — clear path to negotiate with strategic partners, unclouded by refinancing risk — $50M upsize will only be given to a potential strategic partner if real tangible benefits offered — share price free to trade with uranium price movements and reflect underlying asset values — management can now focus on optimising production and delivering further strategic objectives — $274M CB maturing 2017 will be dealt with in timely fashion to avoid uncertainty De-risking of the balance sheet will enable full strategic value of Paladin to be realised placing Paladin in a position of strength for current strategic discussions DRAFT – PRIVATE & CONFIDENTIAL 8 8
Presentation Outline Key Achievements and Update Uranium Market Project Update Positioned for the Future 9
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