Outlook spurs mine purchase

3 October 2002

Paladin Resources of Australia is to buy the Langer Heinrich uranium deposit in Namibia, southern Africa, in response to what the company says is an "improving market outlook" for nuclear energy worldwide.

Paladin managing director John Borshoff said: "The improving market outlook worldwide for the use of nuclear energy for production of electricity, due to both economic competitiveness of the technology and the benefits it has in reducing global warming greenhouse gases, places Paladin in a stronger position with access potentially to a further 10,000t of uranium." Borshoff also highlighted the continued improvement in the spot price for uranium oxide, which he said had risen 35% in 12 months, and was now "testing the critical $10 per pound barrier." He added that market analysts were predicting further increases in the price over the medium term.

Paladin will pay Aztec Resources A$15,000 ($8000) and a production royalty of A¢12/kg of yellowcake product sold and delivered to a buyer. Cash will be paid upon finalisation. Paladin's acquisition, combined with its Kayelekera uranium project in Malawi, will give it control of the two most important uranium projects in Africa.

The Heinrich uranium deposit was discovered in 1972 by South African mining house Gencor. The calcrete-type deposit contains a global resource of 34,000t U308 at a grade of 0.55% and is located in the Namib Desert. Aztec acquired the project from Gencor in 1998.

• Also anticipating an upward trend in uranium prices, Cameco has restarted mining at its Rabbit Lake facility in Saskatchewan, Canada.

The company announced that production had begun at the facility's Eagle Point underground mine. It suspended mining operations in 1999 in response to a uranium mining freeze.

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