PALADIN ENERGY LTD - Australian Securities · PDF filePaladin Energy Ltd Disclaimer and Notes...
Transcript of PALADIN ENERGY LTD - Australian Securities · PDF filePaladin Energy Ltd Disclaimer and Notes...
PALADIN ENERGY LTD ACN 061 681 098
Level 4, 502 Hay Street, Subiaco, Western Australia 6008 Postal: PO Box 201, Subiaco, Western Australia 6904
Tel: +61 (8) 9381 4366 Fax: +61 (8) 9381 4978 Email: [email protected] Website: www.paladinenergy.com.au
Ref: 402369_1.docx
12 November 2015 ASX Market Announcements Australian Securities Exchange 20 Bridge Street SYDNEY NSW 2000
By Electronic Lodgement
Dear Sir/Madam
30 September 2015 Quarterly Conference Call Presentation Attached please find the presentation in relation to the quarter ended 30 September 2015 conference call and investor update to be held tomorrow morning at 7.00am Perth time. Full details in relation to the call were announced on 11 November 2015. Yours faithfully Paladin Energy Ltd
ALEXANDER MOLYNEUX Interim CEO
For
per
sona
l use
onl
y
Alexander Molyneux – Interim Chief Executive Officer
Craig Barnes – Chief Financial Officer
Darryl Butcher – EGM Technical and Project Development
Andrew Mirco – GM Corporate Development and Investor Relations
September Quarter Results
Conference Call and Investor Update13 November 2015
For
per
sona
l use
onl
y
Paladin Energy Ltd
Disclaimer and Notes for JORC and NI 43-101
Mineral Resources and Ore Reserves
1
This presentation includes certain statements that may be deemed “forward-looking statements”. All statements in this presentation, other thanstatements of historical facts, that address future production, reserve or resource potential, exploration drilling, exploitation activities andevents or developments that Paladin Energy Ltd (the “Company”) expects to occur, are forward-looking statements.
Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, suchstatements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-lookingstatements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices,exploitation and exploration successes, and continued availability of capital and financing and general economic, market or businessconditions.
Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differmaterially from those projected in the forward-looking statements. Readers should not place undue reliance on forward-looking information.The Company does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, futureevents or otherwise.
In the following presentation, for those deposits that are reported as conforming to the Joint Ore Reserves Committee (JORC) 2004 or 2012code, the terms Inferred Mineral Resources, Indicated Mineral Resources, Measured Mineral Resources, Ore Reserves, Proved Ore Reserves,Probable Ore Reserves and Competent Person are equivalent to the terms Inferred Mineral Resources, Indicated Mineral Resources, MeasuredMineral Resources, Mineral Reserves, Proven Mineral Reserves, Probable Mineral Reserves and Qualified Person, respectively, used inCanadian National Instrument 43-101 (NI 43-101).
The technical information in this presentation that relates to Exploration Results, Mineral Resources and Ore Reserves is based on informationcompiled by David Princep B.Sc. and Stephanie Raiseborough B.E., both of whom are Fellows of the Australasian Institute of Mining andMetallurgy. Mr. Princep and Ms. Raiseborough each have sufficient experience that is relevant to the style of mineralisation and type of depositunder consideration and to the activity that they are undertaking to qualify as Competent Persons as defined in the 2012 Edition of the“Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”, and as Qualified Persons as defined in NI 43-101. Mr. Princep and Ms. Raiseborough are full-time employees of the Company and consent to the inclusion of the relevant information in thisannouncement in the form and context in which it appears.
Previous tonnages, grades, assays and other technical data relating to the Oobagooma deposit are taken from historical records prior to theimplementation of the current NI 43-101. While the data is believed to have been acquired, processed and disclosed by persons believed to betechnically competent, they were estimated prior to the implementation of NI 43-101 and are therefore regarded as historical estimates for thepurposes of NI 43-101 and as an exploration target for the purposes of JORC disclosure. A Qualified Person as defined in NI 43-101 has notdone sufficient work to classify the historical estimate as current Mineral Resources. The Company is not treating the historical estimates ascurrent Mineral Resources as defined in NI 43-101 and for this reason the historical estimates should not be relied upon. At present, theCompany considers that these resources have no equivalent classification under NI 43-101 and should therefore be considered as unclassified.The historical information is presented on the basis that it may be of interest to investors.
Some of the information in this presentation, in relation to the mineral resources and ore reserves for all deposits except Manyingee andMichelin, was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with JORC Code 2012 on thebasis that the information that the estimates are derived from has not materially changed since it was last reported.
For
per
sona
l use
onl
y
Paladin Energy Ltd
Paladin….
2
A GLOBAL URANIUM LEADER
OWNS LANGER HEINRICH, A STRATEGIC TIER ONE MINE
HAS OPTIMISATION AS A CORE COMPETENCY
PROVIDES BEST SENIOR LEVERAGE TO URANIUM UPSIDE
For
per
sona
l use
onl
y
Paladin Energy Ltd
Global Uranium Leader
3
ARMZ/Uranium One
Cameco
Rio Tinto
KazAtomProm
Areva
Navoi
Paladin
BHP Billiton
27.4
24.5
23.5
23.5
21.4
11.8
8.8
8.0
6.2
Paladin is the world’s leading independent pure
play uranium miner
Government owned
Divisions of diversified companies
Integrated with non-mining
Annual Capacity
Mlb
For
per
sona
l use
onl
y
Paladin Energy Ltd
Langer Heinrich A Strategic Tier One Mine
4
First Quartile C1 Cash Cost1
32.7MlbsCumulative production
Top 10 Uranium Mine by Production
2
4th largest open-pit
+20 Year Mine Life3
1 Source – UxC Uranium Production Cost Study – August 20152 Source – TradeTech Uranium Market Study – 2015: Issue 3 (based on 2015 production)3 At current processing rates
For
per
sona
l use
onl
y
Paladin Energy Ltd
Quarter to 30 September 2015 Highlights
5
C1 Cash Cost US$27.82/lbVs September quarter guidance
US$26/lb to US$30/lb
LTIFR 1.39Compared to 2.41 last quarter and
4.10 for 3 months ended 30 September 2014
US$46.12/lb ASP26.4% above average spot
US$11.3M Gross ProfitIncrease of 707% from
US$1.4M in 2014
Production 1.083Mlbs
Drummed Production 1.2Mlbs
Cash US$108.4M Vs pro forma guidance for repurchase
of CB’s US$101.5M to US$111.5M
Bicarbonate Recovery Plant (BRP) implemented and operating 200% of design
Repurchased US$20M of the US$274M Convertible Bond due 2017 for US$18.5M
Cash flow optimisation initiatives substantially implemented
C1 cash cost decreased 16% from US$33.03/lb in September 2014
For
per
sona
l use
onl
y
Paladin Energy Ltd 6
Sales revenue US$36.9M 0.800Mlb sold at average
realised price of US$46.12/lb
Loss of US$16.4M Lower than loss of
US$38.8M in 2014
EBITDA US$6.4MUS$21.6M turnaround from 2014
negative EBITDA of US$15.2M
US$20M Repurchase
of 2017 CBResulted in savings of approx. US$3.9M
Gross Profit US$11.3M
Increase from 2014 Gross Profit of US$1.4M
Cost of Sales US$25.7MDown from 2014
Cost of Sales US$37.9M
Down 32%
Down 5%
Down 58%
References below to 2015 and 2014 are to the equivalent three months ended 30 September 2015 and 2014 respectively.
Up 707%
Quarter to 30 September 2015 HighlightsF
or p
erso
nal u
se o
nly
Paladin Energy Ltd 7
Quarter to 30 September 2015 Cash Flow
Sales proceeds of US$36.9M only
received in October 2015
108.4
(18.0) (1.2)(4.3)
(5.7)
(37.4)(3.2) (1.8)
(3.7)
183.7
0.0
50.0
100.0
150.0
200.0
US$
M
Q1 FY2016 change in cash and cash equivalents
Includes US$1.2M cash
portion of Carley Bore
acquisition cost
For
per
sona
l use
onl
y
Paladin Energy Ltd
(0.8) 6.8
8.2
(44.6) (0.1)
36.9
(1.3) 0.1 0.8
0.4
6.4
-35
-30
-25
-20
-15
-10
-5
0
5
10
15
20
US$
M
COS variance
(15.1)
18.7
(20.8) (0.2)
13.6
4.4
1.5
1.9
2.4
6.4
-20
-15
-10
-5
-0
5
10
US$
MRevenue variance
COS variance
8
EBITDA Variance Analysis
Quarter to 30 September 2015 vs. Quarter to 30 September 2014 Quarter to 30 September 2015 vs. Quarter to 30 June 2015
Revenue variance
For
per
sona
l use
onl
y
Paladin Energy Ltd
63.86
46.25
0.39
1.55
0.44
(7.47)
(3.98)
(0.78)
(3.64)
(3.05)
(0.44)
(0.63)
30.00 35.00 40.00 45.00 50.00 55.00 60.00 65.00
Q1 FY2015 Actual all-in cash costs
Currency
Volume and grade
Efficiency - mining
Efficiency - processing
Efficiency - other
Capital expenditure
KM C&M
Exploration
Corporate
Debt servicing
Q1 FY2016 Actual all-in cash costs
US$/lb
9
All-in Cash Spending (Breakeven Price)
All-in spending reduced by
US$17.61/lb Vs. equivalent
quarter last year (excluding one
off items)
Volume effect Vs. the quarter to
30 June 2015
All-in spending in-line with plan
for US$39-41/lb range on full
year FY 2016 basis
Quarter to 30 September 2015 vs. Quarter to 30 September 2014
63.86
48.9146.87 45.48 46.25
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
Q1 FY2015 Q2 FY2015 Q3 FY2015 Q4 FY2015 Q1 FY2016
All-in cash expenditure
FY2015 Average US$50.75/lb
FY2016
Guidance
US$39-41/lb
US$/lb
For
per
sona
l use
onl
y
Paladin Energy Ltd
Capital Management
10
Total debt reduction1
― US$449.6M since June 2012
― US$20M during Sep Quarter
Next maturity is April 2017
Outlook for improved
operating cash flows
Strategic initiatives being
considered
2017 CB Funding Gap
Reduced to US$150-
US$180M
Breakdown of Key Debt Instruments 1 US$M
LHM Syndicated Facility Agreement 61
Convertible Bonds due April 2017 254
Convertible Bonds due March 2020 150
Total Debt 465
1 Reductions based on face value of debt
For
per
sona
l use
onl
y
Paladin Energy Ltd
Optimisation a Core Competency
11
Paladin maintains a world class
technical services team focused on
cash flow optimisation
BRP Enhancement 4 now operational
Capital Cost of additional
<US$100k of our original capital
cost of US$6.8M
Recovery of sodium bicarbonate
now exceeds 200% of design
Total operating cost saving now
>US$6/lb (>US$30Mpa)
Additional secondary benefits
33% Reduction
For
per
sona
l use
onl
y
Paladin Energy Ltd
Optimisation a Core CompetencyFY2016 Cash Flow Optimisation Initiatives
12
Mining and processing
optimisation:― Full-year impact of BRP plus increase in expected
performance to over 200% of design
― Alliance style mining contract
Other Controllable costs:― Reduction of head office staff and admin costs
― Exploration on care and maintenance (i.e., minimal
spend to meet licence commitments)
All in total expenditure including annualised impact and optimisation initiatives1
Assumed USD/NAD of 12.60 Vs 11.48 for FY2015
9.6% reduced grade to 694ppm offset by volume increase
1Includes: Operating cash flows; investing cash flows; and debt servicing (including principal and interest payments on the LHM syndicated facility agreement)
US$/lb
For
per
sona
l use
onl
y
Paladin Energy Ltd
Best Leverage to Uranium UpsideUranium is not affected by recent commodity rout
13
30
40
50
60
70
80
90
100
110
120
130
Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15
Oil Bloomberg Commodity Index Uranium
Reb
as
ed
to
10
0%
For
per
sona
l use
onl
y
Paladin Energy Ltd
Best Leverage to Uranium UpsideUranium has a positive outlook and Paladin has leverage
14
Current situation is positive
― Japan 2 reactors restarted and
25 have applied to follow
― 2017 will see record nuclear
power generation
― 65 reactors under construction
– 59% in Asia
― Mined supply reduced 10% in
2014
― Higher prices are needed
Paladin is leveraged
― Publicly-listed uranium pure
play exposure
― FY2016 85% spot-related
exposure
― FY2017 & FY2018 almost
100% spot relatedSource: TradeTech for historical spot. Analysts’ forecast is based on average of 16
analyst forecasts as shown in latest available reports (analysts include: BAML; BMO;
Cantor; CIBC; CIMB; Cormark; CS; Dundee; JPM; Raymond James; RBC; RFC
Ambrian; Salman; Scotiabank; TD; and UBS).
39
48
55
68
Analysts’ forecast
US$/lb
For
per
sona
l use
onl
y
Paladin Energy Ltd
Strategy
15
1. Maximise LHM operating cash flows through optimisation
initiatives that preserve the integrity of the long-term life
of mine plan
2. Maintain KM and exploration on a “minimal expenditure,
care and maintenance basis”
3. Minimise corporate and administrative costs
4. Progress strategic initiatives with respect to partnerships,
strategic investment, funding and corporate transactionsFor
per
sona
l use
onl
y
Paladin Energy Ltd
FY2016 Guidance
16
5.0 - 5.4Mlbs Production
LHM C1 US$25-27/lb7-14% lower than FY2015
Cash flow neutral
for FY2016Subsequent quarters to
be cash flow positive
December Quarter Sales 1.5 - 1.7Mlb
LHM C1 US$25-27/lb
Cash build to US$110-120M
US$4/lb ASP Premium to spot
US$19M corporate costs,
KM care and maintenance
and explorationUS$14M lower than FY2015
For
per
sona
l use
onl
y
Paladin Energy Ltd
Appendix
17
For
per
sona
l use
onl
y
Paladin Energy Ltd
Langer Heinrich Project Update
18
Production September Quarter― 1.083Mlb (drummed 1.200Mlb)
― recovery 82% (has now improved with reversion to typical ore)
― Bicarbonate Recovery Project (BRP) Enhancement 1 now operational at >200% of design
further significant reduction in reagent usage
further consequential benefits but one adverse (leach extraction)
C1 Cost US$27.82/lb, on track to achieve $25-27/lb for FY2016
Optimisation and innovation for further unit cost reduction
― further application of membranes― other focal areas:
process recovery operator training and operating systems process plant utilisation
Guidance FY2016 of 5.0 - 5.4Mlb
Actual
Sept Qtr
FY2015
Actual
Sept Qtr
FY2016
Ore processed 0.734Mt 0.847Mt
Ore feed grade 786ppm 706ppm
Recovery 85.6% 82.2%
U3O8 production 1.090Mlb 1.083Mlb
For
per
sona
l use
onl
y
Paladin Energy Ltd
Pipeline Projects
19
Kayelekera Mine ― now stable in C&M― restart feasibility study near completion and
current focus― site stable in terms of water and other
environmental issues for the long term
Michelin Deposit Canada― minimum expenditure planned for FY2016
Manyingee WA― Minimum activity planned for FY2016F
or p
erso
nal u
se o
nly
Paladin Energy Ltd
Paladin Energy Ltd – Contact Details
20
Head Office
Level 4, 502 Hay Street
Subiaco Western Australia 6008
PO Box 201, Subiaco
Western Australia 6904
Telephone: +61 (0) 8 9381 4366
Facsimile: +61 (0) 8 9381 4978
Email: [email protected]
Website: www.paladinenergy.com.au
Investor Relations
Andrew Mirco
Telephone: +61 (0) 8 9423 8162
Mobile: +61-409-087-171For
per
sona
l use
onl
y