Langer Heinrich Mine: Weathering the Storm

The Langer Heinrich Mine (LHM), a cornerstone of Paladin Energy's uranium production, has faced an unprecedented challenge. A "one-in-fifty-year rainfall event" in Namibia has disrupted operations, forcing the company to withdraw its production guidance for FY2025. This weather event, while a setback, offers a unique opportunity to assess Paladin's resilience and strategic planning.

The heavy rainfall led to significant disruptions, including transportation difficulties, restricted feed to the crushers, and excess surface water limiting access to the processing plant. Despite these challenges, Paladin has re-established access to the LHM and resumed processing plant operations. The company expects the processing plant to return to normal operation as the in-circuit inventory and chemistry stabilise and stockpiled ore saturation levels decrease.



The rain has also delayed the mobilisation of key mining equipment and personnel, resulting in water ingress into the open mining pits. While the onsite pumping infrastructure is adequate to de-water the pits, access to the pits to commence mining is likely to be delayed. This disruption to the early commencement of mining, along with the short-term impact of the suspension of operations and the difficulties associated with processing saturated stockpiled ore, has led Paladin to withdraw its production guidance for FY2025.

Paladin still expects to improve production levels in the second half of CY2025 with the blending of ore from the open pit mines. However, the disruption to the anticipated start of mining means that the Company does not expect the LHM to achieve the nameplate run-rate guidance of 6Mlb by the end of CY2025. The acceleration of mining was a key initiative in offsetting the underperformance of stockpile ore and achieving nameplate production.

The withdrawal of production guidance for FY2025 could affect investor confidence and stock performance in the near future. Investors typically rely on production guidance to make informed decisions about the company's future performance and potential returns. The uncertainty introduced by the withdrawal of this guidance may lead to increased volatility in the stock price as investors reassess their expectations. Additionally, the delay in achieving the nameplate run-rate guidance of 6Mlb by the end of CY2025 could further impact investor sentiment, as it indicates that the company may not meet its previously stated production targets.

However, Paladin's continued efforts to drive operational improvements and progress the advancement of mining, along with the strong levels of plant recoveries and improved water supply outcomes, provide a platform for improving plant production. The company's preferred mining contractor, Trollope Mining, has commenced mining equipment mobilization and the recruitment and training of operators, which could help mitigate some of the negative impacts on investor confidence and stock performance.

In conclusion, while the recent weather event has presented significant challenges for Paladin Energy, the company's strategic planning and operational improvements offer a path forward. Investors should closely monitor Paladin's progress in the coming months, as the company works to resume normal operations and achieve its long-term production goals. The resilience and adaptability demonstrated by Paladin in the face of this unprecedented challenge will be crucial in determining the company's future success.