By Hilary Mare
URANIUM miner Paladin Energy has warned shareholders of a delay in the completion of the sale of a 24 percent interest in the Langer Heinrich mine in Namibia, to a Chinese company.
The dual-listed firm is selling a 24 percent interest in Langer Heinrich to CNNC Overseas Uranium Holdings and up to 75 percent of its Manyingee project, in Australia, to MGT Resources for a combined N$2700 million.
Paladin told shareholders this week that the definitive agreement contemplated in the nonbinding term sheet for the sale of the Langer Heinrich stake had not yet been executed, saying that the company was likely to miss the fourth quarter transaction close.
However, discussions with CNNC were still ongoing.
Paladin, which owns 75 percent of the Langer Heinrich mine, signed a nonbinding term sheet to sell a 24 percent stake for over N$2,4 billion a few months ago.
The deal includes long-term arrangements for uranium off take.
“The parties are working to prepare definitive documentation for formal execution, including a sale and purchase agreement, a shareholders agreement and documentation for the uranium off take arrangements,” Paladin said soon after the deal.
Langer Heinrich has been Paladin’s only operating mine since it closed Malawi’s Kayelekera mine in 2014 and, if completed, the sale will take Paladin’s stake in the mine down to 51 percent.
As recently as January 2014, Paladin owned 100 per cent of Langer Heinrich, but that month it sold a 25 percent stake to China National Nuclear Corporation for $US190 million ($254 million).
Further, Paladin has signed a binding term sheet with MGT Resources, for the acquisition, over two stages, of 75 percent of the Manyingee project, excluding the Carley Bore deposit.
On closing of the transaction, MGT will acquire an initial 30 percent interest in the project for $10million and will form a joint venture (JV) over the project with Paladin.
MGT will then have an option to acquire an additional 45 percent of Manyingee JV from Paladin for $20million, exercisable for 12 months following Manyingee JV’s preparation of a plan to conduct a field leach trial for uranium extraction by in-situ recovery method.
Under the terms of the agreement, MGT will issue Paladin options to subscribe for new shares equivalent to five percent of MGT’s shares outstanding for a period of 12 months from closing of the transaction at A$0.06 a share; and options to subscribe for new shares equivalent to five percent of MGT’s shares outstanding for a period of 24 months from closing of the transaction at A$0.08 a share.
Paladin will issue MGT options to subscribe for new shares equivalent to two percent of Paladin’s shares outstanding for a period of 12 months from closing of the transaction at A$0.35 a share; and options to subscribe for new shares equivalent to two percent of Paladin’s shares outstanding for a period of 24 months from closing of the transaction at A$0.45 a share.
In Namibia, Paladin Resources acquired the mineral title in 2002 and in 2005 finalised a favourable bankable feasibility study. The defined mineral reserves provided for a mine life of 11 years and a process plant life of 15 years. The designed mill throughput of 1.5 Mtpa of calcrete ore would result in the production of 1,180 tpa U3O8 at a head feed grade of 0.0875 percent U3O8. Currently, an updated mineral reserve estimate extended the mine life to 27 years.
Mining operations employed at the Langer Heinrich open pit mine are conventional truck and shovel operations followed by beneficiation, alkaline leaching, counter-current decantation, ion exchange, and precipitation and calcining. The Langer Heinrich uranium project was officially opened by former President Hifikepunye Pohamba on March 15 2007.
Confidente. Lifting the Lid. Copyright © 2015