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UPDATE 2-Paladin signs U.S. uranium sales deals, shares up
August 22, 2011 / 2:30 PM / 6 years ago

UPDATE 2-Paladin signs U.S. uranium sales deals, shares up

* Signs contracts with 3 new U.S.-based customers

* Langer Heinrich expansion nears completion

* Shares open up 7 percent at C$2.12 on TSX

TORONTO, Aug 22 (Reuters) - Uranium producer Paladin Energy (PDN.AX) PDN.TO said on Monday that it had signed sales agreements with three new customers in the United States, sending its Toronto-listed shares 7 percent higher.

The agreements, covering more than 2.8 million pounds of output from the Langer Heinrich mine in the African nation of Namibia, will strengthen Paladin’s presence in the U.S. nuclear market.

The Perth, Australia-based miner said the Langer Heinrich Stage 3 expansion project is nearly complete, increasing annual production at the mine to 5.2 million pounds from 3.7 million pounds. Total fiscal 2012 output is expected to be 7.4 million pounds of uranium.

BMO Capital Markets analyst Edward Sterck called the news “neutral” in a note to clients, noting that pricing for the contracts will range from the low to mid-$60s per pound.

The uranium spot price is about $50.50 per pound.

“The pricing mechanisms and the small size of the contracts relative to Paladin’s total forecast production base do not significantly impact forecasts in any given year,” said Sterck.

The company expects to begin deliveries in 2012, extending through 2016, it said in a statement.

Paladin’s shares opened 7 percent higher at C$2.12 on Monday on the Toronto Stock Exchange. Its Australian-listed shares closed at A$1.98 on Monday.

($1=$0.99 Canadian)

Reporting by Julie Gordon in Toronto and Abhiram Nandakumar in Bangalore; Editing by Frank McGurty

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