Paladin Energy Shares Rise on Six-Year Supply Deal: Sydney Mover
Paladin Energy Ltd. (PDN), the Australian company producing uranium in Africa, gained the most in seven months in Sydney trading after signing a six-year supply deal with an unidentified utility.
The shares rose 10 percent to A$1.39, the biggest gain since Jan. 17, while Australia’s benchmark S&P/ASX 200 Index declined 0.3 percent.
Paladin, operator of the Langer Heinrich mine in Namibia and the Kayelekera project in Malawi, will receive an initial $200 million payment, allowing the company to repay debt, the Perth-based company said today in a statement. The company, which is developing assets in Australia, Canada and Niger, forecasts that uranium prices will climb this year.
Paladin will deliver 13.73 million pounds of uranium oxide to the utility starting in 2019 from its mines in Africa or a project yet to be developed, the company said. It will use the $200 million to repay its $134 million in convertible bonds due next year, according to the statement.
The utility will hold 60.1 percent of Paladin’s Michelin project in Canada as security, with that stake lowered as Paladin continues work on the venture, the company said. The payment to Paladin will be made in tranches to be completed by Jan 31, 2013, it said.
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