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Namibia’s iconic Langer Heinrich uranium mine is stirring awake after a six-year slumber. While the first commercial production remains targeted for the first quarter of 2024, a slight delay might occur due to lower contractor productivity over the festive season.
Despite this hiccup, the commissioning and operations teams have collaborated effectively, minimizing the impact. However, achieving commercial production might inch into early Q2.
The restart project is nearing completion, with over 93% of the work done. Paladin Energy, the mine’s operator, now expects total capital costs to reach $125 million, slightly above the initial $118 million forecast.
Encouragingly, the first ore entered the processing plant on January 20th, following successful commissioning of the beneficiation circuit, as reported by Paladin CEO Ian Purdy.
To bolster financial flexibility ahead of commercial production, Paladin secured a $150 million syndicated debt facility with Nedbank and Macquarie Bank. This comprises a $100 million amortizing term loan over five years and a $50 million revolving credit facility with a three-year term.
Purdy expressed optimism about the uranium price outlook, highlighting Paladin’s significant exposure to potential price increases. The company boasts flexible shipping arrangements and early payment terms with its main customer, offering better cash flow during the Langer Heinrich ramp-up phase.
Further boosting the company’s position, Paladin signed a non-material off-take agreement with a leading European counterparty, adding to their geographically diverse portfolio. Seven other off-take agreements are secured with top-tier entities across the US, Europe, and China. These contracts offer various pricing mechanisms, including base-escalated, fixed-price, and market-related options.
Commercial agreements are also in place with two Western conversion facilities, and export permits for 2024 have been obtained from the Namibian Ministry of Mines and Energy.
With an estimated 17-year lifespan, Langer Heinrich possesses substantial reserves of 84.8 million tons of ore, averaging 448 parts per million uranium grade. Life-of-mine production is projected to reach 77.4 million pounds of uranium.
