Paladin Energy shares drop as Slater and Gordon files class action
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The news: Law firm Slater and Gordon has filed a class action against Paladin Energy, alleging the ASX-listed uranium miner engaged in misleading or deceptive conduct and contravened its continuous disclosure obligations.
The numbers: The class action has been brought on behalf of investors who bought shares over a five-month period.
The claim, filed in the Victorian Supreme Court, alleges the investors incurred financial losses after acquiring Paladin shares between 27 June 2024 and 11 November 2024.
On 27 June, Paladin announced to the market that its Langer Heinrich mine in Namibia was likely to produce 4-4.5 million pounds of uranium concentrate in FY25, at a cost of USD28 to USD31 per pound. The miner reaffirmed this guidance to the ASX twice, on 22 July and 5 August 2024.
But on 28 October, Paladin reported quarterly production results below expectations, which saw the company's share price drop by 15%.
Paladin then withdrew its previous guidance on 12 November 2024 and said it expected the Langer Heinrich mine to produce between 3-3.6 million pounds of uranium concentrate in FY25, around a million pounds less than previously stated. That announcement saw the price of Paladin shares plummet by 22% over two days.
Paladin shares were last down 4.2% to $4.39, extending losses of nearly 70% over the last 12 months.
The context: Slater and Gordon's practice group leader Nathan Rapoport said the class action claim alleges that Paladin had no reasonable basis to provide its June guidance.
He said Paladin "knew or ought to have known" that its June guidance was "unreasonably optimistic" and was never going to be met.
What they said: “We allege that the company was aware of material risks to its uranium production targets well before it disclosed these to the ASX,” Rapoport said.
“When investors purchase shares in a listed company, they are entitled to assume that all of the material information relevant to that company’s financial position and prospects has been disclosed.
“For shareholders of Paladin, this was not the case.
“Had the true situation been revealed to the ASX, it’s reasonable to say that group members would have acquired shares at a lower price, or may not have acquired the shares at all.”
The source: Slater and Gordon media release
