UPDATE 1.20pm: Paladin Energy has confirmed the sale of a 25 per cent stake in its Langer Heinrich uranium mine in Namibia to China National Nuclear Corporation (CNNC) for $US190 million.
Paladin said an offtake component of the agreement would allow CNNC to purchase its pro-rata share of product at the prevailing market spot price.
"There is also an opportunity for Paladin to benefit by securing additional long term offtake arrangements with CNNC, at arm's length market rates, from Paladin's share of Langer Heinrich production," the company said in a statement.
The boards of both companies have approved the transaction but the deal is still subject to Chinese regulatory approval and consents from Paladin's project financiers and the Bank of Namibia.
CNCC has agreed to pay a $US20 million non-refundable deposit to Paladin in the interim.
Paladin managing director and chief executive John Borshoff said the significant cash injection from the deal would largely be applied to debt reduction, which the board considers an essential step during a time of unprecedented low uranium prices.
"This will help stabilise the company, establishing an incredibly strong platform that will enable us to maximise the value of our assets and ensure increased production of much needed uranium once the price is sufficient to support the planned future growth of nuclear energy in China and elsewhere."
Paladin shares have been on a downward spiral in recent years because of slumping uranium prices, its large debt levels and production problems at its two mines.
Shares in the company closed up just half a cent at 56.5 cents after initially soaring to a peak of 65.5 cents on the news.