Kayelekera output slumps 1.3%
Dual-listed uranium producer Paladin Energy, whose subsidiary Paladin (Africa) Limited owns Kayelekera Mine (KM) in Karonga, has indicated that the mine’s output dropped 1.3 percent in the quarter ending March 2013.
KM output at 761 992 pounds (364 tonnes) of triuranium pentoxide (U3O8) and achieving 94 percent of its name plate capacity in the period is down from last quarter’s 772 280 pounds U3O8.
The quarterly output is despite KM achieving an all-time high daily production in the quarter ending March 2013.
However, year to date, comprised of the first nine months of the current financial year, production of 6.11 million pounds was 26 percent ahead of production when compared with the same period in the previous year and was 96 percent of the combined nameplate capacity, which was in line with guidance.
Combined sales for the quarter at KM and Langer Heinrich Mine (LHM), one of Paladin’s mine in Namibia, totalled 1.92 million pounds U3O8, which generated revenue of $106 million (K46 billion).
The average sales price was $55.22 per pound U3O8, well above the average spot price of $42.71 per pound of U3O8.
Comparatively, the miner achieved record sales revenue of $133.9 million in the December quarter, selling 2.78 million pounds U3O8 at an average price of $48.10 per pound.
The combined production from its two mines for the March quarter totalled 1.99 million pound of triuranium pentoxide (U3O3), which was 95 percent of the nameplate production, and a decrease of nine percent from the December-record quarter.
Paladin said KM is in a good position to beat its production target of eight million by 0.5 million pounds of U3O8.
The quarterly activities report shows that feed grades of 1 094 parts per million (ppm) is on track with a record recovery of 87.1 percent.
The mine has maintained ‘self-sufficiency on acid requirements’ and a safety milestone of 365 lost time injury free days achieved.
“Strategic initiative work [is] advancing well with results expected mid June quarter. The financial year 2013 production guidance of 8.0 to 8.5 million pounds U3O8 remains well on target,” said the report.
On unit cost improvement, Paladin said the cost savings and optimisation initiatives through technical innovation continue to successfully reduce total costs and unit production costs at both mines.
At KM, C1 (cash cost) cost of production continued to drop substantially with a reduction of 8.5 percent in the March quarter from the C1 cost of production of $43.50 per pound U3O8 for the December quarter.
“C1 cost of production reduction for the December and March quarters of 20 percent is significant and is better than forecast given in the November 2012 announcement,” said the report.
Comparatively, at LHM, C1 cost of production remained steady in the March quarter compared to the December quarter C1 costs of production of $29.60 per pound U3O8, according to the report.
In 2007, Paladin (Africa) Limited reached agreement with the Malawi Government to enter into a Development Agreement for the KM.
The terms of the fiscal regime detailed in the Development Agreement, among others, are as follows; a 15 percent carried equity in project company to be transferred to Malawi, in return for corporate tax rate reduced from 30 percent to an effective 27.5 percent and the 10 percent resource rent tax in Malawi reduced to zero.
Paladin’s participation in the mine is both via its 85 percent equity stake in the project company and via interest on the inter-company loans that provide up to 80 percent of the funding for the project company.
