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Paladin Energy chairman Rick Crabb. Picture: Tony Ashby/The West Australian.
Paladin Energy chairman Rick Crabb. Picture: Tony Ashby/The West Australian.

UPDATE 1.25pm: Paladin Energy has moved to reassure nervous shareholders that the company is travelling well despite its ailing share price.

In a market update from chairman Rick Crabb, the uranium miner said it had received queries from its "investor base" seeking confirmations and clarifications on its quarterly update last week.

Paladin shares slid to a seven-year low of 74 cents on Friday, spooking shareholders.

But Paladin today restated its full year production guidance of 8-8.5 million pounds and insisted operations at its Langer Heinrich and Kayelekera mines in Namibia were "going well".

The company said it was already starting to benefit from its cost rationalisation program.

Paladin conceded the uranium spot price had recently slumped to $US40.75 a pound, its lowest since March 2010, but had since stabilised to $41.25 a pound.

"Paladin believes the current spot price is a result of a near term market imbalances," Mr Crabb said in a statement.

"It should be noted that because of its blend of term price and fixed price contracts, together with spot sales, Paladin is likely to achieve average sales prices about 10-15 per cent above the prevailing average uranium spot price in the current market."

Mr Crabb insisted the company was in full compliance with all debt covenants applying to its project financing and convertible bond funding.

"There are no covenants relating to Paladin's market capitalisation so the recent decline in the company's market capitalisation has no impact whatsoever on these debt facilities," he said.

He said the company also remained in full compliance with its continuous disclosure obligations.

Paladin also insisted managing director John Borshoff's recent decision to sell shares was done for personal reasons and with board approval.

It noted the "extremely narrow windows a chief executive has available" to sell shares and that it was the first time he had sold shares since the inception of the company in 1994.

Mr Crabb said the company's board and management believed it was "ticking all the boxes" across it operations and recent cost cutting measures would make it sustainable even at low uranium prices.

"This strengthening of the company will enable it to be in full readiness to take advantage when the uranium price makes its expected recovery," he said.

Investors took some comfort from the update, sending Paladin shares up 7.5 cents, or 9.04 per cent, to close at 90.5 cents.

Paladin has been dogged in recent months by sliding uranium prices prompted by the Fukushima nuclear disaster in Japan and production problems at its uranium mines.

The Fukushima nuclear disaster sent the industry into freefall as heavy nuclear users, including Japan and Germany, shut nuclear reactors and sought alternative power sources.

The situation for the industry is still dire with prices recently hitting two-year lows.