Paladin looks to join top-tier uranium producers

(In U.S. dollars, unless noted)

TORONTO, Aug 26 (Reuters) - Paladin Energy (PDN.AX) is looking to escape the ranks of junior uranium miners and join the big leagues as it ramps up output and plans acquisitions.

The Australian company, which has struggled with production this year at its main Langer Heinrich mine in Namibia, expects production to rise sharply at the end of the year with an expansion of the site, followed by the opening of its Kayalekera mine in Malawi in January 2009.

All told, Paladin produced 1.7 million pounds of uranium oxide in the fiscal year ended June 30. But output should gradually rise to 9.3 million pounds by 2012, based on its current pipeline of properties.

The ramp-up in production over the next few years will "allow us cash flows that will give us the stepping stones for growing the company into a major mining house," Managing Director John Borshoff said on a conference call.

Paladin, which has recently been rumored as a potential target for world No. 1 uranium producer Cameco Corp (CCO.TO), also plans to grow through acquisition, Borshoff said.

"What we need to do is obviously grow and eat, or be eaten," he said on a call to discuss earnings.

Paladin lost $36 million, or 6 cents per share, during the year to June 30, as uranium revenue was overshadowed by exploration, financing, and other costs. That compared with a year-earlier loss of $37.6 million, or 7 cents a share.

Despite the loss, the company has a strong balance sheet, with $338 million in cash, which should be augmented as production increases, company executives said.

Paladin, whose shares are listed in both Australia and Toronto, were down 2.6 percent at C$4.81 on the Toronto Stock Exchange.

($1=$1.05 Canadian) (Reporting by Cameron French; Editing by Ted Kerr)