Offtake agreement sets uranium miner’s future a-glow

0 Comment
 02 Oct 2012   Posted by admin


URANIUM miner Paladin Energy has signed a US$200 million, long-term offtake contract (LTC) with a major US utility that will see it deliver 13.73 million pounds of uranium between 2019 and 2024.
The company reported that it would fulfil its delivery commitment from either its current African mining operations (which include projects in Namibia, Malawi and Niger); a project yet to be developed; or from a combination of both options.
A US$200 million prepayment will be made in tranches before January 31, 2013. To secure Paladin’s obligation to deliver product representing a specified prepayment amount, the utility will hold security on 60.1 per cent of Paladin’s Michelin project in Canada.
Paladin reported that the percentage of Michelin secured would be reduced as the project’s value was enhanced by ongoing work on site.
In a statement released last month, Paladin said that the Michelin security could also be replaced by other appropriate security if required.
The prepayment will be applied to repayment of the balance of March 2013 convertible notes worth US$134 million with the remainder retained for working capital.
“The specific nature of the LTC, leveraging off forward production, is in itself a strong indication of the uranium industry’s future supply challenges and fully endorses Paladin’s development vision to date,” Paladin said in the statement.
The company stated that it would re-evaluate its strategic options “in the light of this major achievement”.


Leave a Reply

Your email address will not be published.