After more than six years of care-and-maintenance, the Langer Heinrich uranium mine, in Namibia, has restarted production activities and, while Paladin Energy continues to target first commercial production by the end of the first quarter, lower contractor productivity over the Christmas and New Year period may mean a slight delay.

Despite the hiccup, there has been extensive collaboration between the commissioning team and the operations team, which has mitigated the impact of reduced productivity.

However, it may mean a slight delay in achieving commercial production to early in the second quarter.

The restart project is now more than 93% complete. Paladin is forecasting total capital costs of about $125-million, from the previous forecast of $118-million.

First ore was fed to the processing plant on January 20, following the successful commissioning of the beneficiation circuit, Paladin CEO Ian Purdy reported last month.

Ahead of commercial production starting, Paladin has executed a $150-million syndicated debt facility to provide capital flexibility.

The company executed the facility, comprising a $100- million amortising term loan over five years and a $50-million revolving credit facility with a three-year term, with Nedbank and Macquarie Bank.

Purdy said that the outlook for uranium prices was strong. Paladin has about $80 uncapped upside exposure to the uranium spot price until the end of 2030, the company said.

The company also has flexible shipping arrangements and early payment terms with its largest customer, providing significant delivery flexibility and improved cash flow during the Langer Heinrich operational ramp-up.

During the quarter, Paladin has executed a nonmaterial offtake agreement for the supply of uranium to an industry leading counterparty in Europe. Paladin has a geographically diverse offtake book, with seven offtake agreements executed with top-tier counterparties in the US, Europe and China. These contracts range in type and duration and provide base-escalated, fixed-price and market-related pricing mechanisms.

Paladin executed commercial agreements with two Western conversion facilities and has received export permits for 2024 from the Ministry of Mines and Energy in Namibia.

Langer Heinrich has an estimated 17-year mine life, supported by ore reserves of 84.8-million tonnes with an average uranium grade of 448 parts per million.
Life-of-mine production is estimated at 77.4-million pounds of uranium.