Q4 2024 Paladin Energy Ltd Earnings Call

Thank you for standing by and welcome to the pellet and energy limited does seem that 2020 forecast the LAE results call.

All participants are in a listen only mode. If you wish to ask a question you will need to press. The stocky followed by the number one on your telephone keypad.

I would now like to hand, the conference I imagine a misstep whole Himba C. I R. Please go ahead.

Speaker Change: Good morning, everybody and welcome to the pellet and energy second quarter reports of <unk> 25.

My name is Paul <unk>, Chief operating officer of Palatin and with me today is in Petty Chief Executive Officer, and <unk>, Chief Financial Officer, and Alex Raw that Chief Financial Officer.

We're pleased to be here today to present, our quarterly results and then discuss the number of positive outcomes that we've achieved during the last quarter.

Ramp up of operations at Longhorn rate continues and we're seeing positive progress in the operation, particularly coming out of the shutdown in November.

The shutdown was well executed with all of the intended activities completed on time.

December 2024 recorded the highest monthly production volumes since the restart of national production in March 24.

There are a number of notable achievements in the quarter, including the sustained improvement in recovery rates and stabilized action a water supply to the plant.

Hello, multi clouds out the acquisition of fishing uranium cooperation on the 24th of December and completed listing on the Toronto stock exchange on the 27th of December. This work was well executed and it is a significant milestone for the company.

I'll now provide an update on your pricing and all data on a couple of issues.

I'll start with our safety performance on a 12 months rolling basis. The company sits at 4.1 per million hours worked which remains under our target of thought.

Speaker Change: The health and safety of all of our table no matter, where they are or what role that fly is incredibly important to us and we work hard to continuously improve air condition systems and processes that drive the outcome.

Okay.

In Namibia production for the quarter was similar to the previous quarter at 600, if they didn't want thousands pounds with two weeks to your operating guys in quarter, one due to the shutdown in December we achieved production of 308000 pounds of drum court, which is a step change coming out of the shot.

So we remain on track to deliver the guidance range of three $3 6 million pounds of products by FY 'twenty five.

And then the shutdown was an important factor that led to the results that we saw in December some of the ways include improvements to the flash unit and the leaching circuit and you've been entering into license game generation to improve efficiency and some additional comp in hardwood in the safety data to improve our recovery rates.

The team has worked very hard to lock in the recovery improvements identified at the end of last quarter and so we saw an uplift from recovery at 69% in quarter, 1% to 88% this quarter sustained through the entire quarter. This is a result that I'm very pleased with and it comes from a lot of good analysis and problem solving for Mike.

Speaker Change: Tim.

We've also made great strides in delivering improvements to the water infrastructure and systems that support consistent supply and we've proven the infrastructure and the capacity works as evidenced by the December result, where we had no water related interruptions.

We say manav disruptions to our operations in January two to salsa blames affecting them water supply. These types of issues are routine events, which we cater for in our guidance.

So we solve the infrastructure challenges and we solve the capacity challenge and we continue to work with name water to optimize water supply and we're continuing to make improvements to our water efficiency in water management on site.

As many of you and I know it. We're currently processing previously stockpiled ore in our base case plan is to move to mining high quality oil from the middle of this year.

Now we continue to experience variability in the grade of that stockpile at all so we will continue to assess a range of options to increase all grades, including blending strategies and bringing mining forward from the planned July start date.

My team has been working on the mining side now for six months with mine planning optimization and scheduling with it we selected a preferred contractor we've identified the equipment that we need and as I. Previously noted some of that equipment is onsite already constructing the next tilings, Dan and we will continue to identify mechanisms that may enable us to bring.

<unk> morning forward.

Restarting them on and large processing facility has a lot of moving parts.

And we're now nine months into what is it 21 months ramp up prices I'm extremely happy with the work my team has done and the results of the problem solving it but we continue to lock in the improvement such as recovery water infrastructure and delivery and when we deliver the mining phase I believe that comes together to move us closer towards our target levels of performance.

I'd like to hand out of the NASA Ames 30 for an update on the efficient acquisition.

Thanks, Paul and hi, everyone really strong finish to the year across the company as Paul has said it Langer Heinrich some great results.

And really importantly for US we were so pleased to bring the acquisition of fishing uranium cold.

To successful completion.

It came together really well at the end of the die once we achieve the Canadian approvals with the full support of the Canadian government.

We were able to close the transaction very quickly just before Christmas and we're extremely pleased to see a tick up on the T. Six before the new year. So we're up we're running a the transaction is complete in every aspect successfully completed.

And actually went to tie them together very very smoothly at the end of the day.

We're under why we're really in good to have boots on the ground working with efficient team.

A couple of highlights for us in familiar in particular really plays that all of the fishing employees have come on board. There's a fantastic team attrition culturally very aligned to pellet and fishing has always had a very can do attitude and their whole vision and their whole focus which is evident.

From the work that I've done is delivering this world class project.

And they committed to that task and they committed to moving that company and project forward. So really pleased to be working alongside Chris the CFO.

Gary the VP project development and kind of in that they pay your exploration and Poland that are working very closely with the team on the ground and the integrations.

Strong success, we're acting as one company already we're very focused on the critical path in moving <unk> forward and everyone's really excited to be working together.

Over the next little while we will start to outline what our priorities and plans.

But I can say, it's a continuation of deficient program, which is delivering this world class project to market.

As soon as Mike Sims.

So with fishing.

The short term priority right now is we've approved the winter drilling program, we like to see an extension of the resource into reserves incredibly prospective area. They've got a fantastic drilling program, which is very well considered so that will commence with activities expected.

To commence on the ground this current quarter.

And then obviously with Gary we're doing a full review of the project planes will be looking to bring additional resources.

To move the project forward the environmental approvals are well progressed and we're working with Gary to see how we can bring that to conclusion and we've also had some very constructive discussions with first nations and Poland will be over in Canada. In the next few weeks to move those discussions forward as well so all sister.

<unk> go and we'll be providing a lot more information over the next few months.

Thanks, Paul.

Then look I'm really excited about the project and are certainly looking forward to hitting either to Saskatchewan in a couple of weeks' time. So just a quick recap strong operational performance in December underpinned by improvements in our water supply infrastructure.

And the successful shutdown completed in November on time.

Overall recovery results.

Sectional they are within the target range and was sustained throughout the entire quarter.

We sold half a million pounds and delivered dies successfully into the convert is in Europe and the U S side, we completed the acquisition of vision and listed on the Tier Stakes on the 27th of December 24.

So in summary, Pelican energy had a strong quarter with good progress on the ramp up of Longhorn re man and completion of the acquisition of fishing uranium Corporation.

Speaker Change: I'd like to now open the floor to questions.

Thank you.

To ask a question. Please press star one on your telephone and wait for your name to be announced if you wish to cancel your request. Please press star two.

Speaker Change: You're on a speaker phone please pick up handsets to ask your question.

Your first question comes from Daniel <unk> with Jefferies. Please go ahead.

Okay. Thanks.

And Alex and Paul for taking my question first one.

Speaker Change: Just wanted to.

It was a good recovery sent to the call. So I just wanted to get a guide you on what the exit.

Right that was in December and is that 88% was that pretty.

Great Price chart or did you say, a pretty big improvement on price the rectification works fine.

Speaker Change: Thanks for the question in fact, we saw an uplift.

In the last month of the first quarter.

To around the 86% and those results have been sustained between 86 and 89 for the entire quarter. So set of work was largely done prior to the shot and sustained throughout the quarter.

Okay.

And I just wanted to maybe just unpack a little bit more on the occupancy.

Ramp up profile.

Speaker Change: Yeah, if you look at the balance sheet and no snow.

Speaker Change: So probably wasn't the rationale behind it but the balance sheet.

Looking about healthy upfront.

And final question with the cash and some and deposit side I guess, you know, what's what's stopping the investment into the open pit.

The ramp up if it's going to provide a bit more consistency in Lafayette Park mall.

Hum.

Speaker Change: Alright.

Well, what we have is that pre mine stockpile I mean, we started the process with about 6 million tonnes of product on that stockpile is.

It's like editing extremely close to the to the crushing circuit and it delivers very very low cost tonnes into the plant.

Hum.

In the first half of them are this.

This year, we have been cash positive as a consequence of the low cost stockpile.

We're looking at options to bring the morning forward. We originally planned for that to be in July and there's a lot of moving parts Tonight that happened. So we do have some capacity on thought building out now to assess them.

But we just need to make sure that.

That it is gone to that.

That we can actually bring it forward in a timely manner. So we're looking at methods of doing that.

Speaker Change: We're looking at how we bring in the the drill and blast program. So there's there's a favorite of work today to bring that forward. So I will we will continue to look at ways, we can do that but the base case plan.

Stop mining in July.

Okay.

I can probably just elaborate on that a bit further.

When when its scheduled said coming through a pressure in July what what does the ramp up where I talked about before.

Yeah.

So we're not going to provide specific data also.

What we have provided is our guidance, we expect to be in the range of three to $3 six for the full financial year.

And then we'll work towards achieving our targets at full production rates later.

Later in the year.

Perfect I'll hand, it over thanks, guys.

Your next question comes from Cameron <unk> with Bank of America. Please go ahead.

Yeah. Good morning, Thanks, Tim just a question on the water. So you said you've had good support from them. What are have you had any interruptions in January.

Speaker Change: And with the storage water storage tanks.

If you had to draw much a nice buffer tanks, either last quarter or sign where you've been.

Pretty consistent with your name water supply.

Thanks for the question Kevin So, yes, we have had some minor disruptions as a consequence of the sulfur blends through through the shot we were able to maximize their own start onsite storage facility.

Speaker Change: And we've been operating a very consistently.

Yes.

Speaker Change: Sulfur blends are fairly routine in that region and we've catered for for that sulfur blends in our guidance.

Okay. Thank you and just on bringing that morning forward from the open pit is there any sort of balance between current uranium crosses like I mean, clearly the Straits pretty bullish on uranium crosses over the next.

12 months and then thereafter do you sort of are you happy to punch through that low grade stockpile and then mine the high grade when you expect to be writing process to sort of push up a bit in or does that not really come into play I, just sort of setting asides purely on FY 'twenty guidance.

Yeah, it doesn't affect our decision making process Cameron will continue to move the medium grade stockpile through the plant, it's like cost tons, it's already pre mind.

And we'll we'll look at ways, we can pull in the mining at a at an appropriate point in time.

Okay. Thanks, Paul just one for Ian maybe on the fusion update so you expect briefly about the tame but.

Over there in Canada, but you know I Ross Mcilroy had elected to resign at the last update can you give confidence to the shareholders at pls projects should be successful without Ross.

Yeah.

Yes, it will be Ken.

Ross Ross chose to strip away on the completion, which is.

Is understandable as an independent C O looking at a divisional row.

Certainly all would've been very happy for us to stay on come on the journey and Ross and I are on very good terms.

But that's understandable I think what's really pleasing for me is that Chris Gary and kind of in the the functional leaders and the guys on the ground are all absolutely committed not only to becoming part of paladin, but to really driving forward the project and the exploration of outcomes.

Giving example, kanan great Guy are working very closely with pole. He's overjoyed that we're fully committed to its winter drilling program because he sees the prospectively of the region and he's just came to get the drill rigs running Gary It's a fantastic Guy I used to run.

Very significant underground operations for Cameco, Gary's totally committed to each project and the work. He has done has been outstanding and again pull Gerry and I talk a.

A couple of times a week, sometimes daily we're right in there and moving forward, So and Chris has been fantastic. The CFO. He's carried a lot of the workload for the actual completion of the transaction, which is quite significant sufficient have a fantastic team. We're looking as I said to a point I.

President of Canada.

Speaker Change: <unk> role is going to have a really important.

Hard to play, but that's a strategic role that's about government first nations' stakeholders strategy, we're going full steam ahead, while we recruit that role and Poland are working very closely with the local teams. So we will be successful. It is a world class project.

I'm not sure all of our shareholders fully appreciate what we've achieved by buying that company I think as I've mentioned to people last year was a hotly contested process that is a highly sought after project. It's now ALS and I think when you see our plans and the progress we make going forward I think people will.

Speaker Change: Go Wow that that that's pretty exciting.

So again, we're excited we're on the right path, we will be successful and we look forward to showing the market you know what we can do over the next few years with that asset.

Yeah wonderful thanks Ann.

And just maybe another one quickly potentially for Alex I'm, sorry, with the DRC I approval there is requirements.

They are restricting sales to China, just purely to C. G N under the existing contract does that hinder any upside for pls volumes and potential pricing given China's appetite for uranium going forward.

Thanks Cameron.

Look one of the when we announced the transaction if you remember one of the sort of key pillars of the transaction. If you like was a belief that there's going to be shortage of material in the west.

The the Chinese utilities have been very quick to the market and contracting available uranium volumes in the western utilities have been slower.

Speaker Change: And so we think definitely this guy and feed that demand from the western utilities. So we're very happy to target the western utilities for the for the western material for the P. O S material and of course, we've got the ability to sell.

Speaker Change: Namibian origin material to China as well.

Alex: Perfect. Thanks, Alex I'll pass it on.

Your next question comes from James Bullen with Canaccord. Please go ahead.

Thanks, and thanks, Ann and tame.

Just a question for you.

Obviously, NIM what is fulfilling the as far as the bug and providing most anymore.

[laughter] tightening around the titles.

Alex: Have you seen an improvement there.

Okay.

Thanks, James Good question.

The board.

Water management.

<unk> has improved but what we're seeing is a.

As a consequence of the stockpiled ore quality, we're seeing.

Some some.

Alex: I guess some water efficiency.

Alex: Some more efficiency work that needs to be optimized.

And so we'll continue working on mechanisms to improve that water efficiency in water management on site. So we have made some guidance in terms of Thailand's recovery and will continue over the next quarter to resolve those transitional issues that are related to stockpile quality. So those issues will be fully resolved once we move into the mining.

<unk> mining phase.

James: No I don't see that continuing at all past that point James.

Okay, great. Thanks, and just as you go into the mining side when we look back at the DFS now because I think youre about USD 48 Bucks.

Are you still feeling relatively comfortable around those PFS numbers, obviously corrected for inflation to the mining phase.

Yeah, where we're seeing the.

The financial results in line with our expectations.

James: There's nothing that's surprising to hospital in that space.

That's brilliant.

And just to round.

At least for the next major catalysts that the market should be looking for there or announcements.

Yeah.

I think James the first major catalyst, which I think the market is still interpreting is the fact that we've this is now ALS and the fact that we've added this world class asset to our existing portfolio.

It is really a game changer for us as a company.

We've got global scale, we're in production and a world class asset in Namibia, We one of the largest producers in the world to die for what we're producing today and we're only nine months into a ramp up we've got probably a top two project uranium project in the world.

Which we are in it sales and we've got exploration upside and other projects in Canada as well as two major assets in Australia.

James: We sit here today and go while when we look at what we've got in our company and we are dual listed one of the largest resource base prices.

Excuse me so there's a huge catalysts, we've had over Christmas, which is still coming through and we think that catalyst will come through strongly.

As people start to fully appreciate the opportunity we've got to deliver on this amazing set of assets that we've compiled and put together.

Secondly, we're well advanced on the environmental approvals, we're well advanced in a very deep relationships between fishing and first nations. So obviously, we're going to be very very focused on approvals.

James: And thirdly, you know.

The project feasibility work and the detailed engineering is all set up and underway where the team are working closely with the C. N. S. C. So I think we're going to have a fantastic news flow of bringing this asset forward towards production over the next several years.

James: And we've proven we can deliver a project on time on budget the efficient team a really strong technically focused and very confident in what they are doing so we think there's going to be fantastic news coming out of Pls.

Consistently over the next few years, and then you look across to Namibia.

We're well on our way to ramping up leghorn rig to its target that'll continue the good news will come out of Langer Heinrich and there's movement at the station in Australia, and we'll be exploring and moving Michelin forward as well. So James there are endless catalysts coming but what we're gonna do we.

We're a company that likes to do the work and then tell the market what we've done rather than promise the world. So let us get out let us get into it. It's the start of the new year, we got a busy year ahead, but I'm expecting some really good news flow out of pellet and this year that's.

Great.

James: I would look for T O Whiting in the Ats going up too. Thank you very much.

Thanks James.

Your next question comes from Andrew Hines with Shaw and partners. Please go ahead.

Andrew Hines: Yes, thanks, and well done in time.

Obviously, a much better quarter than where we were in September.

I would guess that started to come off Paul a quick question for you that plant recovery number 88% in the quarter, that's actually surprisingly good at this stage of the.

The ramp up and commissioning do you do you have any sort of targets in your head around how high you can get the recoveries out of the plant.

Andrew Good question.

Now target ranges in the I thought the 19th that we're well within that range and we are putting them in a medium grade stockpile through the plant and delivering on that right. So I'm very pleased with the results we've achieved.

I'm more interested in seeing how we can progress mining and increase the grade and then re optimize the process and drive that is in the fall and so so I'm cautiously optimistic about delivering better results than that but I guess, we will see when we move into that phase of the of the off price.

Speaker Change: Yes, Dave I guess with that with high grade material and more consistent Facebook you should be able to.

Tweak it up a little bit.

A quick question might be for an hour on cash flow is good to see the operation cash flow positive.

Operating cash flow in the quarter up $43 million.

The release.

How much more capex is left to spend.

It's only a modest amount in that quarter, which I think was related to the tailings storage facility.

Correct.

As you go into the mining operations, what's your Capex build it like for the next six months.

Oh, Thanks, Android, but we havent provided guidance on the next six months kept pace, but we expect it to be you know raised somebody align and say you know what we said when we put out our original numbers as you said the majority of the cost in the next six months will be around TSS six state.

Safe to say, it's in low cost countries I said that in the next two quarters.

Okay. Thanks, and then final one for me.

Sure Alex around the side of the market.

Find another contract in the in the quarter, So I like shopping at 11 offtake agreements.

Speaker Change: So you've obviously been out there and active just yeah, it's been a pretty quiet period over the last little period for contracting and obviously the slight uranium prices also have been a little bit on the sulfur largest Alex your thoughts about whats happening out there one of the utilities doing what's what's your expectations for the market this year.

Yeah. Thanks, Andrew.

Excuse me.

As I said before we are seeing a good a good activity from utilities and I think that that is a reflection of us being a producer.

And I think other producers are seeing strong strong demand.

I've seen tried TEG just a recently published the Q4.

Update and they've actually gone hundred and 46 million pounds of contracted for the year to November so not even just for the full year, but and that you know it reflects a relatively strong year I think UX have a smaller number but tried text seems like they're seeing more contracts.

And that is reflective of the interests, we have which which is again these translating into strong a strong pricing and strong term pricing, there's always some volatility in the spot, but we very much more concerned with our with the term market dynamics.

We have seen quite strong last year, and we expect to see a even stronger dynamics. This year as utilities turn their mind more to the contractor and view three allied obviously they've been.

A very concerned with making sure they've got enough conversion and enrichment and that's really been the same philosophy here, but we're seeing utilities turn them on to uranium contracting and we should see.

Speaker Change: The benefits of that this year.

Can you give us any color on the nature of that contract that you signed in the quarter or is it.

I presume, it's a market related contracts.

We are we still saying sort of.

Floors and ceilings type contracts close they were sort of around 75.

Earlier in the quarter up to around 130 feelings. It. Although it has the same sort of numbers that you're saying at the market.

Yeah, so without commenting on the individual contracts were seeing a prevalence of of what we call hybrid contracts, where you have a component.

Of market related and compiling of base escalated.

The floors and ceilings are we still seeing very healthy floors and ceilings I mean, there's some discussions from the utilities every time the spot.

Spot price moves utilities expect this particularly the ceilings to adjust with that where we tend to resist that level of discussion the minute utility you know once a corresponding reduction in our in the ceiling price, we sort of tend to move away from that.

Speaker Change: Because longer term.

We believe this.

Is just that a basic math that you just can't ignore those deficits growing deficits.

So well yeah, Brian broadly.

Levels of floors, and ceilings are very attractive and.

Speaker Change: Utilities are you know pretty much willing to give a base escalator and a bit of market to entice the supplies to contract.

That's great. Thanks, guys look I'll handle times or someone else I would on time.

On a good quarter and good to see Langer, Heinrich and performing exceptionally well so well done.

David: Hey, David.

Speaker Change: Your next question comes from Dan Arias singer with UBS. Please go ahead.

Thanks, guys just a couple of questions surround out I'm, just finishing up on the water.

Speaker Change: So it sounds like it was a good quarter.

Other issues had been mitigated from now I just want to confirm that.

You've still got to ramp up some plants.

More.

So to get the full run rate.

I think it.

So maybe it's like $1 three $1 2 million tons through the quarter.

Do you like hypothetically if you were at full tilt now what would you have enough water to deal with that sort of throughput.

Yeah, we've demonstrated the capability of.

About the NIM water infrastructure, and our infrastructure to to manage full water floods and an onstar onsite storage capacity is more than sufficient.

So I say, yes, we do have enough what a full a full production.

Awesome, Okay cool. Thanks, and then just on the cost side I think I'll. Just go ahead poultry too much during the ramp up.

But can you give us any guidance on.

How you expect that to.

Volvo.

Volumes over the course of the year 90 minutes still this bit of daylight between.

Speaker Change: Where you are now versus your original guidance.

This is all on a unit cost basis or am I right in assuming this is just not fixed cost component.

That's something that I see as you ramp up.

You need to ramp up.

Yeah. Thanks, Tim that's Sandro tied that one look I think what we're saying on the <unk> side predominantly driven by the volume gains that have been prices. If we normalize the total production cost with same cost pretty much in line with our expectations. So we obviously will say an increasing cost estimate.

Next morning, but we think pretty good cost rise Alex on the platelet slate where might that volume impact.

Great. Thanks, and then maybe just last one just a little.

I'll talk about.

The mining restart.

Maybe you could just walk me through conceptually.

What what what needs to be done before.

July like Oh, Yeah have you hired the contract is.

Yeah, you know I guess.

Yeah, what's left to do I guess before we start seeing you guys at the mine.

Yeah. Thanks for the question.

So we've identified.

Mining contract that we have identified the fleet requirements.

We have an optimized mine plan.

We are working through the optimization of the Oh, the schedule and the next thing we need to do is make sure. We have the the final contracts locked in we have to mobilize plants and equipment to site that typically in the maybe it comes out of South Africa, and we've demonstrated that that that's not a particular.

Challenge for all of our contractors mobilized the site.

Then you go through the typical process around top so clear in preparation of the drilling that drill and blast removal of either bid in that so it becomes very standard after that.

And then it at an appropriate point in time, we stopped moving mined ore into instead of raw more directly into the crashes.

So there is quite a bit of preparation to do and.

And and we'll continue to look at ways, we might be able to accelerate that in a cost effective manner.

Awesome, Okay cool, thanks, Thanks, and congratulations again.

Speaker Change: Thank you very much.

Your next question comes from George Ross with Argonaut. Please go ahead.

Yeah. Good morning, guys congratulations on the quarter and also the our attrition deal closing.

Most of my questions been answered, but just in regards to shifting to the institute all processing is there any sort of view on if there's going to be any I guess impact on recoveries versus the stockpiled ore.

He brought a loss.

Okay, sorry, just quickly you mean, when we move into the mining side are we expecting to see an uplift.

Yeah Yeah.

Yes, yes, basically is are there any expectations on whether or not the recoveries will change.

After you you shift from the stockpiled ore to the to.

To the model.

Speaker Change: If you Hum increase.

Increased grade and you have great stability and material stability than.

And then it does make it easier to optimize the process and improved recoveries.

Our recovery rates are actually already within our target range.

And I said, so there might be some upside potential I'm cautiously optimistic but.

But I guess, we'll have to see when we stopped them.

<unk> mined ore into the plant, but conceptually it's possible.

Speaker Change: Okay great.

That's it for me everything else has been answered congrats again.

Yeah.

Speaker Change: Thank you there are no further questions at this time I'll now hand back to Mr. Paul <unk> for closing remarks.

Thank you for the questions.

It really plays with the progress on our ramp up like I stated Elliot it's nine months into a 21 month program with.

Speaker Change: We're really pleased with the results that we've delivered particularly in the last quarter post the shutdown.

And we're also very excited about bringing efficiency into the company. It was a strong quarter. Some very notable improvements that we've seen is locked in and and we're just very happy with the work that some dessicated last quarter.

Speaker Change: Really appreciate you joining us today and thank you for your participation.

That does conclude our conference for today. Thank you for participating you may now disconnect.

Speaker Change: Yeah.

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