Paladin Energy boosted performance at its flagship Langer Heinrich uranium mine in Namibia in the September quarter, but low uranium prices and concerns about its debt levels have kept its shares under pressure.
Langer Heinrich, the largest of Paladin's two mines, produced 1.43 million pounds of uranium oxide in the three months to the end of September on record recoveries from its processing plant. But an extended shutdown at its Malawian mine dropped group production to 2.04Mlb from the previous quarter's 2.14Mlb.
Paladin did not disclose its production costs at either mine in yesterday's quarterly report, or its cash position. The company declared revenue of $US69.2 million for the quarter after selling 1.67Mlb at an average price of $US41.38/lb - down from $US46.22 in the June period.
RBC Capital Markets analyst Chris Drew told clients yesterday that Paladin had delivered a "mixed September quarter", with production results and received prices above RBC expectations, but the focus was still on the company's balance sheet.
With only $US78.1 million in cash at the end of June, Paladin was forced into a heavily discounted $88 million capital raising to strengthen its balance sheet. But with $276 million in unsecured convertible bonds maturing in late 2015, and a further $236.6 million falling due 18 months later, doubt still lingers about Paladin's ability to generate enough cash to repay the debt.Paladin shares closed down 0.5Â¢ to 43.5Â¢ yesterday, well below the 70Â¢ investors paid in the August capital raising.