Paladin Energy Q3 Earnings Call Highlights

Key Points

• Paladin raised FY2026 Langer Heinrich production guidance to 4.5–4.8 million lbs after Q3 output of 1.29 million lbs (up 5%), with sales of 1.03M lbs at an average realized price of $68.30/lb; management says the ramp‑up remains on track and the company held $219.5M cash plus a $70M undrawn revolver.
• The company kept its $44–$48/lb production cost guidance despite higher output, trimmed FY capex/exploration to $15–$17M from $26–$32M, and warned recovery may normalize below the quarter’s 92% toward a plant target of 85–90%.
• At the PLS project Paladin received EIS approval on Feb 20 but is facing a judicial review filed by the Métis Nation–Saskatchewan on Mar 31; the company says it will continue engagement, ongoing drilling (~11,000m) and front‑end engineering while pursuing permits.

Paladin Energy TSE: PDN reported higher quarterly uranium production at its Langer Heinrich Mine and raised its FY 2026 production guidance, while also highlighting regulatory progress and ongoing engagement with indigenous stakeholders at its Patterson Lake South (PLS) project in Canada.

Langer Heinrich production increases as ramp-up continues

Managing Director and CEO Paul Hemburrow said Langer Heinrich produced 1.29 million pounds of U₃O₈ during the quarter, up 5% from the prior quarter, which he attributed to “strong plant performance.” Sales volume totaled 1.03 million pounds at an average realized price of $68.30 per pound.

Operationally, Hemburrow said mining continued to ramp up with delivery and commissioning of the remaining mining fleet completed, with activity “heavily focused on the G pit.” Total mined material was 6.17 million tons, up 12% from the previous quarter. Crusher throughput was 1.21 million tons at an average ore feed grade of 503 ppm, and the company produced 1.29 million pounds at an average recovery rate of 92%.

Hemburrow reiterated that the ramp-up remains on track for completion by the end of FY 2026, while noting the company is monitoring potential impacts from events in the Middle East. He said inbound supplies to site and outbound shipments to customers were not impacted at the time of the call, and that the company was taking steps to maintain security of key process inputs.

Guidance revised upward; cost range maintained amid uncertainties

Following year-to-date production of 3.6 million pounds, Paladin raised its FY 2026 Langer Heinrich production guidance to 4.5–4.8 million pounds, up from the prior 4.0–4.4 million pounds.

Hemburrow said sales guidance remained 3.8–4.2 million pounds, and the company maintained its cost of production range at $44–$48 per pound (US). Capital and exploration expenditure guidance was reduced to $15–$17 million from $26–$32 million. CFO Anna Sudlow said the capital guidance change reflected reprioritization and timing shifts, with some spending deferred into FY 2027.

Asked why costs were unchanged despite the higher production outlook, Sudlow said the company expects higher costs in the final quarter as it transitions away from benefiting from the medium-grade stockpile. “There’ll be no reliance on the medium grade stockpile,” she said, adding that Paladin was “starting to see some cost escalation as a result of the conflict in the Middle East,” and cited uncertainty about how that will evolve.

On quarterly performance and the implied run rate, Hemburrow said the revised production range was “realistic and achievable,” while describing the mine’s transition from the G pit toward the next pit as a period where grades and ore handling characteristics can vary. He said the company was working on mitigation through blending strategies and aiming to maintain recovery performance, while also setting expectations that recovery rates may not stay at the quarter’s 92% level. Hemburrow said the plant’s target range is 85%–90%.

Hemburrow said Paladin intends to provide FY 2027 guidance in July, but cautioned that uncertainty related to the Middle East makes forward-looking commentary more difficult.

Sales, inventories, and liquidity update

Hemburrow said cost of production was $40.30 per pound in the quarter, supported by use of the remaining MG3 stockpile. As of March 31, Paladin held $219.5 million of unrestricted cash investments and had an undrawn $70 million revolving credit facility. The company made a scheduled $4 million payment on its term loan, reducing the balance to $36 million.

Hemburrow also noted quarterly sales revenue included $47.3 million, with cash receipts expected during the June 2026 quarter.

Addressing inventories, management said finished product levels were “slightly elevated” due mainly to a shipping delay, with “quite a large number of pounds on the water” as of March 31. The company said it expects a normalized inventory level of about four months of production on average, noting that inventories fluctuate quarter to quarter.

On sales volumes, the company said it was “trending towards the top end” of its sales guidance range, while emphasizing that production and sales timing can diverge due to shipping and logistical delays.

Operational inputs and water supply: reagent inventory and desalination status

In response to questions on supply chain risk, Hemburrow outlined key reagents used in Paladin’s alkaline leach process, including sodium bicarbonate, sodium carbonate, sodium hydroxide, hydrogen peroxide, some sulfuric acid, and flocculants, as well as diesel and heavy fuel oil. He said Paladin held between 3 and 10 months’ supply of key reagents.

COO Scott Barber provided an update on water supply linked to Orano’s desalination plant, saying the desalination facility was “in full operation” and that Paladin had not experienced major disruptions year-to-date. He said there was “a little bit of sulfur” during the quarter but “nothing that really stopped us.” Barber added that water storage was full and that some rainfall helped top up supplies. A desalination shutdown was planned for late June, but he said the site had enough water to manage through it.

On diesel cost exposure, Sudlow said diesel costs were “sub 10, 15%” of total cost of production, largely through the mining contractor, with a smaller amount used in the plant. Management said the impact of global diesel price changes would depend on the magnitude of price outcomes.

Canada: PLS environmental milestone, legal challenge, and ongoing engagement

At the PLS project in Saskatchewan, Hemburrow said Paladin received ministerial approval of its environmental impact statement (EIS) on February 20, calling it an important regulatory milestone and a prerequisite for further permitting and licensing toward construction and operating approvals.

However, the company disclosed that on March 31 it was advised that the Métis Nation–Saskatchewan (MNS) had applied for a judicial review challenging the EIS approval decision. Hemburrow said such challenges are “not an infrequent occurrence” and characterized it as a challenge to the Saskatchewan government’s authority to grant approval, noting he was not aware of successful challenges to date. He said Paladin would continue constructive engagement with the Métis Nation and that “there’s nothing stopping us from continuing down that pathway towards receiving the license to construct,” as the company remains focused on front-end engineering design work and engagement with the Canadian Nuclear Safety Commission (CNSC).

In response to questions about mutual benefit agreements (MBAs), Hemburrow said an MBA is “not absolutely compulsory,” and not a prerequisite for a permit to construct, though it is what the company wants to achieve. He said Paladin has MBAs in place with the Clearwater River Dene Nation and the Buffalo River Dene Nation, with negotiations ongoing with other parties.

On exploration, Hemburrow said Paladin drilled just over 11,000 meters across the PLS project during the quarter, targeting the Saloon East deposit and resource conversion and extension drilling at Triple R. He said assay results were pending.

At the Michelin projects, Hemburrow said there were no substantive mining exploration activities during the quarter, though target assessments continued. He also said the company commenced a regulatory process to reduce project tenure by approximately 18% as part of a tenement rationalization program.

In closing remarks, Hemburrow said the company was “building momentum” in both production and progress at PLS, while maintaining close watch on the Middle East for potential business impacts in coming months.

About Paladin Energy TSE: PDN

Paladin Energy Ltd TSE: PDN is an Australia-headquartered company engaged in the uranium industry, with activities spanning exploration, development, mining and the sale of uranium concentrate to the global nuclear fuel market. The company focuses on advancing uranium projects through the full project lifecycle, from resource definition and permitting to production and product marketing, aiming to supply U3O8 to utilities and traders that fuel nuclear power generation.

Historically, Paladin's most prominent assets have included the Langer Heinrich uranium mine in Namibia and the Kayelekera project in Malawi.

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