Paladin Energy shares dive on acquisition doubts
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More news: Shares in Paladin Energy tumbled at market open on the ASX after the uranium producer cast doubt over its acquisition of Canada's Fission Uranium.
Paladin shares plunged 11.9% to $10.78 by 10:40am AEDT, making it the worst performing stock on the ASX 200.
The company also flagged that it encountered "some short-term operational challenges" during the September quarter, which impacted ore feed, recovery rates and production volumes.
Paladin Energy says 'no certainty' of Fission acquisition
The news: Uranium producer Paladin Energy said "there can be no certainty" that it will receive the required approvals to complete its acquisition of Canadian explorer Fission Uranium, as it reported the continued ramp up of its Lander Heinrich Mine (LHM) during the September quarter.
The numbers: Production at the LHM in Namibia increased to 640,000 pounds of uranium yellowcake from 520,000 pounds in the June quarter.
The context: Paladin flagged that it encountered "some short-term operational challenges" during the quarter, which impacted ore feed, recovery rates and production volumes. The company said that it has started implementing operational improvements aimed at addressing these issues, de-risking the ramp up of the LHM to nameplate production.
Elsewhere during the quarter, Paladin received a notice of a national security review of its proposed acquisition of Canada's Fission Uranium. Paladin and Fission have made submissions in response to the notice, the company said, while Fission received a final order from the Supreme Court of British Columbia approving the acquisition.
However, Paladin noted that in light of the national security review it is uncertain if it will obtain clearance under the Investment Canada Act, which will prevent the deal from going ahead.
What they said: "The ramp up of production at the LHM continues to de-risk the project and demonstrates the benefits of the plant upgrades delivered during the LHM restart project," Paladin CEO Ian Purdy said.
"Whilst production in the second quarter of the ramp up encountered some process recovery and efficiency challenges, the onsite team have commenced the implementation of operational and process design improvements, which delivered improved performance towards the end of the quarter."
The source: ASX announcement
