Paladin Energy: Chairman's Address at 2012 Annual General Meeting
PERTH, WESTERN AUSTRALIA -- (Marketwire) -- 11/22/12 -- Paladin
Energy Ltd ("Paladin" or "the Company") (TSX:PDN)(ASX:PDN) notes the
address to the Company's 2012 Annual General Meeting delivered by
Paladin's Chairman, Rick Crabb:
"Paladin's core focus over the past 12 months has been building on
the foundations of sustainability of its business under extremely
challenging market conditions. The depressed uranium price in the
wake of the events in Japan in March 2011 has put significant
pressure on our Company, concerned our investors and compelled us to
closely watch and prudently manage our costs, debt and resources.
Our key response to this challenge has been to focus on optimising
the operation of our plants to target an operating surplus and thus
maximise their return on investment. The completion of the
construction and development of our mining operations in Namibia and
Malawi, as well as achieving full production levels this year, has
been key to our business sustainability.
We expect next month to launch on the Paladin website the Company's
inaugural sustainability report utilising a number of the key
indicators suggested by the internationally used Global Reporting
Initiative or "GRI". Whilst this report together with the enhanced
Sustainability Report within Paladin's current Annual Report, will be
valuable for our stakeholders, it is the commitment itself that is
critical for the future of our business. We see sustainable business
practices as a cornerstone of a successful and responsible
enterprise, and it will be our internal yardstick for how we measure
our future performance. While our focus this past year has been on
the commercial sustainability of our business, we have not lost sight
of other sustainability elements that underpin our daily operations.
As a uranium producer, aspects such as health and safety,
environmental management, human rights, social responsibility and
product responsibility are core considerations in our decision-making
We have also taken key steps to further integrate sustainability into
the fabric of our business, including establishing an internal
Sustainability Committee chaired by Mr Phil Baily, one of our
members with significant experience in the
uranium industry. Sustainability has also had significant visibility
at Board meetings during the year. From a compliance and due
diligence perspective, we have undergone a range of environmental
audits as well as establishing a Compliance Committee, to oversee the
Company's anti -fraud and corruption policies and procedures.
Accountability and transparency are important parts of our
sustainability principles. Unfortunately we must spend a great deal
of time dealing with spurious unfounded allegations made in purported
news sites usually by people who are anti-mining, anti-uranium or are
pushing some other vested interest. I wish to assure shareholders and
other stakeholders including the people of Namibia and Malawi that
our Company takes its responsibilities seriously. The good governance
policies explained in the Annual Report and on the website are
As shareholders you will be acutely aware of the volatility of the
Company's share price. Last week in particular was a worrying period
for us all. It is fair to say that the Board and management were
perplexed and disappointed with the negative share market reaction
coinciding with the release of what we considered to be a positive
quarterly report. Following numerous enquiries from our investor base
seeking confirmation and clarification I felt it necessary on behalf
of the Board and management to reiterate, in Tuesday's stock exchange
release, some key points.
The mining operations at both Langer Heinrich and Kayelekera Mines
have reached design targets and are producing at or very near
nameplate. The production guidance given for FY13 of 8Mlb to 8.5Mlb
The cost cutting targets have been identified and announced to the
market. This cost rationalisation programme has been initiated and
has already reduced cash outflows. Additional cost benefits are
expected when all production optimisation programmes are implemented.
During the September quarter our strategic initiative efforts
resulted in the announcement of the Long Term Contract finalised with
Electricite de France (the largest nuclear utility in the world)
incorporating a break-through US$200M prepayment. I am very pleased
with the relationship we have developed with EdF.
The uranium spot price recently declined to US$40.50/lb, its lowest
weekly level since March 2010, but has since strengthened to
US$41.80/lb. Paladin believes the current spot price is a result of
near term market imbalances and we, like many in the industry, expect
that this price level can reasonably be anticipated to recover to the
mid to high 40's over the next several months and move to
significantly higher levels in the mid-term.
The Company is in full compliance with all covenants applying to its
project financing and convertible bond funding. I emphasise that
there are no covenants relating to Paladin's market capitalisation,
so any decline in the Company's market capitalisation has no impact
whatsoever on these debt facilities.
From some quarters there was, in my view, unfair commentary
concerning Mr Borshoff's sale of a portion of his shareholding. It
should be noted this was done with the Board's knowledge (although
not in a blackout period in any event), and recognising the extremely
narrow windows the CEO has available to trade shares. I note that
this was the first time since inception of the Company in 1994 that
Mr Borshoff has parted with some of his shares, was done for personal
reasons and I am sure this does not at all change the confidence he
has for the future of Paladin.
Fortunately we have seen a turnaround this week in the share price
and it was pleasing to see the highly regarded sovereign fund, The
Government of Singapore Investment Corporation, become a substantial
shareholder of our Company.
I will close by reiterating that Paladin's aspiration to be
recognised as a tier 1 international uranium producer is predicated
on having multiple high yield operations, backed by deep industry
knowledge, technical innovation and excellence in sustainability
practice. We may not be at "tier 1" level yet but we are certainly
laying these foundations for the future."
ACN 061 681 098
Paladin Energy Ltd
+61-8-9381-4366 or Mobile: +61-419-912-571
Paladin Energy Ltd
Investor Relations Contact
+1 905 337-7673 or Mobile: +1 416-605-5120 (Toronto)
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