Q3 2026 Paladin Energy Ltd Earnings Call

April 22, 2026

Operator: Thank you for standing by, and welcome to the Paladin Energy Ltd March 2026 Quarterly Results Call. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Paul Hemburrow, MD and CEO. Please go ahead.

Operator: Thank you for standing by, and welcome to the Paladin Energy Limited March 2026 Quarterly Results Call. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Paul Hemburrow, MD and CEO. Please go ahead.

Speaker #2: Thank you for standing by, and welcome to the Paladin Energy Ltd. March 2026 quarterly results call. There will be a presentation followed by a question-and-answer session.

Speaker #2: If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Paul Henborough, MD and CEO.

Speaker #2: Please go ahead.

Paul Hemburrow: Good morning, everyone, and thank you for joining Paladin Energy's quarterly conference call. With me today is Anna Sudlow, our Chief Financial Officer, Scott Barber, our Chief Operating Officer, Alex Rybak, our Chief Commercial Officer, and Paula Raffo, Head of Investor Relations. On the call today, I'll cover a brief overview of the quarter, an update on Langer Heinrich, our FY26 guidance revision, and progress in Canada at Patterson Lake South, and then we'll move into Q&A after that. A couple of highlights from the quarter. Production at Langer Heinrich Mine was 1.29 million pounds for the quarter, up 5% on the prior quarter, supported by strong plant performance. Sales volume was 1.03 million pounds at an average realized price of $68.30 per pound.

Speaker #3: Good morning, everyone, and thank you for joining Paladin Energy's quarterly conference call. With me today are Anna Sudlow, our Chief Financial Officer; Scott Barber, our Chief Operating Officer; Alex Ryback, our Chief Commercial Officer; and Paula Raffo, Head of Investor Relations.

Speaker #3: On the call today, I'll cover a brief overview of the quarter, an update on Langer Heinrich, our FY26 guidance revision, and progress in Canada at Paterson Lake South. Then we'll move into Q&A after that.

Speaker #3: So, a couple of highlights from the quarter. Production at Langer Heinrich Mine was 1.29 million pounds for the quarter, up 5% on the prior quarter.

Speaker #3: Supported by strong plant performance. Sales volume was 1.03 million pounds at an average realised price of £68.30 per pound. We increased Langer-Heinrich Mine 2026 production guidance to 4.5 to 4.8 million pounds.

Paul Hemburrow: We increased Langer Heinrich Mine 2026 production guidance to 4.5 to 4.8 million pounds. In Canada, we received Saskatchewan government approval of the PLS/EIS. We've also continued exploration drilling focused on the Saloon East deposit. More specifically, at Langer Heinrich Mine, mining continued to ramp up with delivery and commissioning of the remaining mining fleet completed, and activity was heavily focused on the G Pit. Total mine material was 6.17 million tons, up 12% from the previous quarter, and crusher throughput was 1.21 million tons at an average ore feed grade of 503 ppm. We produced 1.29 million pounds of U3O8 at an average recovery rate of 92%. Ramp-up remains on track for completion by the end of FY26. We're monitoring potential impacts from the events in the Middle East.

Speaker #3: And in Canada, we received Saskatchewan government approval of the PLS EIS, and we've also continued exploration drilling focused on the Saloon East deposit. More specifically, at Langer-Heinrich Mine, mining continued to ramp up, with delivery and commissioning of the remaining mining fleet completed, and activity was heavily focused on the GPID.

Speaker #3: Total mine material was 6.17 million tonnes, up 12% from the previous quarter. Crusher throughput was 1.21 million tonnes at an average 4-foot grade of 503 ppm.

Speaker #3: We produced 1.29 million pounds of U3O8 at an average recovery rate of 92%. Ramp-up remains on track for completion by the end of FY26.

Speaker #3: We're monitoring potential impacts from the events in the Middle East. Currently, inbound supplies to site and outbound shipments to customers are not impacted. And we're taking steps to maintain security of our key process inputs.

Paul Hemburrow: Currently, inbound supplies to site and outbound shipments to customers are not impacted, and we're taking steps to maintain security of our key process inputs. On sales and cash, we sold 1.03 million pounds of U3O8 at an average realized price of $68.30 per pound. Cost of production was $40.30 per pound, benefiting from utilization of the remaining MG3 stockpile. At 31 March, we held unrestricted cash investments of $219.5 million with an undrawn $70 million revolving credit facility. Quarterly sales revenue includes $47.3 million with cash receipts expected during the June 2026 quarter. We made a scheduled $4 million payment on a term loan facility, reducing the balance to $36 million. On guidance, following year to date production of 3.6 million pounds, we revised Langer Heinrich 2026 production guidance to 4.5 to 4.8 million pounds from the 4 to 4.4 previously announced.

Speaker #3: On sales and cash, we saw 1.03 million pounds of U3O8 at an average realised price of £68.30 per pound. Cost of production was $40.30 per pound, benefiting from utilisation of the remaining MG3 stockpile.

Speaker #3: At 31 March, we held unrestricted cash investments of $219.5 million USD, with an undrawn $70 million USD revolving credit facility. Quarterly sales revenue includes $47.3 million USD, with cash receipts expected during the June 2026 quarter.

Speaker #3: And we made a scheduled £4 million payment on the term loan facility, reducing the balance to £36 million. On guidance, following year-to-date production of 3.6 million pounds, we revised Langer Heinrich 2026 production guidance to 4.5 to 4.8 million pounds from the 4 to 4.4 previously announced.

Paul Hemburrow: Sales guidance remains 38 to 42 million pounds, and cost of production remains in the same range at $44 to $48 per pound. Capital and exploration expenditure guidance was revised to $15 to 17 million from $26 to 32 million. The revised guidance is based on current operating conditions and assumptions and may be impacted by disruptions arising from the current geopolitical events, which we're closely monitoring. Turning to Canada and the PLS project, we received ministerial approval for our environmental impact statement on 20 February. It's a really important regulatory milestone and a prerequisite for further permits and licensing, leading to the construction and operating permits.

Speaker #3: Sales guidance remains at £38 to £42 million, and cost of production remains in the same range at $44 to $48 per pound. Capital and exploration expenditure guidance was revised to $15 to $17 million from $26 to $32 million.

Speaker #3: The revised guidance is based on current operating conditions and assumptions and may be impacted by disruptions arising from the current geopolitical events, which we're closely monitoring.

Speaker #3: Turning to Canada and the PLS project, we received ministerial approval for our environmental impact statement on the 20th of February. It's a really important regulatory milestone and a prerequisite for further permits and licensing, leading to the construction and operating permits.

Paul Hemburrow: On 31 March, we were advised that the Métis Nation–Saskatchewan had applied for a judicial review to challenge the decision to approve the EIS, and we'll continue to actively engage in constructive conversations with local communities and indigenous peoples. We commenced an update of the front-end engineering design study during the quarter and continue to work closely with the Canadian Nuclear Safety Commission as we progress towards a license to construct. On exploration, we drilled just over 11,000 meters across the PLS project during the last quarter. We're targeting the Saloon East deposit and resource conversion extension drilling at RRR. Assay results are still pending. Finally, at Michelin projects, there were no substantive mining exploration activities during the quarter, with prospective and target assessments continuing. We commenced the regulatory process to reduce project tenure by approximately 18% as part of the tenement rationalization program.

Speaker #3: On 31 March, we're advised that the Made-in-Nation Saskatchewan had applied for a judicial review to challenge the decision to approve the EIS.

Speaker #3: And we'll continue to actively engage in constructive conversation with local communities and Indigenous Peoples. We commenced an update of the front-end engineering design study during the quarter and continue to work closely with the Canadian Nuclear Safety Commission as we progress towards the licence to construct.

Speaker #3: On exploration, we drilled just over 11,000 metres across the PLS project. During the last quarter, we're targeting the Saloon East deposit and resource conversion extension drilling at Triple R.

Speaker #3: Assay results are still pending. Finally, at Michelin Projects, there were no substantive mining exploration activities during the quarter, with prospective and target assessments continuing. We commenced the regulatory process to reduce project tenure by approximately 18% as part of the tenement rationalisation program.

Paul Hemburrow: We've been really busy delivering pounds and building momentum across the company, and I'm pleased with the progress that we're making. I'm now happy to take questions.

Speaker #3: So, we've been really busy delivering pounds and building momentum across the company, and I'm pleased with the progress that we're making. I'm now happy to take questions.

Speaker #2: Thank you. If you wish to ask a question, please press *1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press *2.

Speaker #2: If you're on a speakerphone, please pick up the handset to ask your question. The first question today comes from Alistair Rankin from RBC Capital Markets.

Paul Hemburrow: The first question today comes from Alistair Rankin from RBC Capital Markets. Please go ahead.

Operator: The first question today comes from Alistair Rankin from RBC Capital Markets. Please go ahead.

Speaker #2: Please go ahead.

Alistair Rankin: Good morning, Paul, Anna, Scott, Alex, and Paula, and congrats on another strong result. You seem to be making a habit of good quarter results, so well done. Just first question is relating to your reagents. Can you just run through what your key reagents are for production? If possible, just comment on how those contribute to the cost structure in dollars per pound.

Speaker #4: Good morning, Paul, Anna, Scott, Alex, and Paula, and congrats on another strong result. You seem to be making it a habit of good quarterly results.

Speaker #4: So, well done. Just, first question is relating to your reagents. Can you just run through what your key reagents are for production and, if possible, just comment on how those contribute to the cost structure in dollars per pound?

Paul Hemburrow: Thanks for your question, Alistair. What I might do is just sort of give you a very brief overview. We're an alkaline leach process, so we don't use a lot of sulfuric acid. Our key reagents are typically things like sodium bicarbonate, sodium carbonate, sodium hydroxide, hydrogen peroxide, a little bit of sulfuric acid, a lot of flocculants for our CCDs, also HFO and diesel, of course. In terms of their contribution to production, we don't really go into that level of detail. What I can say right now is, at the moment, we do have between 3 and 10 months supply of all of our key reagents, I think, which is a really important factor at this time, given global events.

Speaker #3: Thanks for the question, Alistair. What I might do is just sort of give you a very brief overview. So we're an alkaline leach process.

Speaker #3: So, we don't use a lot of sulphuric acid. Our key reagents are typically things like sodium bicarbonate, sodium carbonate, sodium hydroxide, hydrogen peroxide, a little bit of sulphuric acid, a lot of flocculants for our CCDs, also HFO and diesel, of course.

Speaker #3: In terms of their contribution to production, we don't really go into that level of detail. But what I can say right now is, at the moment, we do have between 3 and 10 months' supply of all of our key reagents.

Speaker #3: I think which is a really important factor at this time, given global events.

Alistair Rankin: That's really helpful. Thank you. Just to follow up on the Métis Nation challenge at PLS, could you just run through how that challenge actually works, what happens now, and what you're planning for?

Speaker #4: That's really helpful, thank you. And just to follow up on the Matey Nation challenge at PLS, could you just run through how that challenge actually works, what happens now, and what you're planning for?

Paul Hemburrow: Yeah. What you might find if you do a bit of a Google search is that this is not an infrequent occurrence. Now, there have been other mining companies and projects that have had the same sort of challenge. This is really a challenge on the Saskatchewan government's authority to provide the approval for the project. There haven't been any successful challenges to date. More importantly, we need to maintain a long-term working relationship with the Métis Nation. To date, the conversations have been really constructive, and we'll continue to work closely with them. What we're doing right now is we're really focused on the FEED work and working with the CNSC to get that license to construct. At this point in time, there's nothing stopping us from continuing down that pathway towards receiving the license to construct.

Speaker #3: Yeah. What you might find if you did a bit of a Google search is that this is not an infrequent occurrence. Now, there have been other mining companies and projects that have had the same sort of challenge.

Speaker #3: This is really a challenge on the Saskatchewan government's authority to give us, or to provide the approval for the project. There haven't been any successful challenges to date.

Speaker #3: More importantly, we need to maintain a long-term working relationship with the Matey Nation. To date, the conversations have been really constructive, and we'll continue to work closely with them.

Speaker #3: What we're doing right now is we're really focused on the feed work and working with the CNSC to get that licence to construct. And at this point in time, there's nothing else stopping us from continuing down that pathway towards receiving the licence to construct.

Alistair Rankin: Okay. That's great. I'll jump back in the queue. Thanks.

Speaker #4: Okay, that's great. I'll jump back in the queue. Thanks.

Alistair Rankin: Thank you. The next question comes from James Bullen from CGF. Please go ahead.

Operator: Thank you. The next question comes from James Bullen from CGF. Please go ahead.

Speaker #2: Thank you. The next question comes from James Bullen from CGF. Please go ahead.

James Bullen: Thanks, and congrats Paladin team. Just a quick one around Irano's desal plant. There's been a bit of talk about sulfur blooms and potential downtime up there. Plus also, I think they have to do a maintenance shut normally in May. Can you just provide us with an update around water supply?

Speaker #5: Oh, thanks. And congrats, Paladin team. Just a quick one around Orano's decel plant. There's been a bit of talk about sulphur blooms and potential downtime up there, plus also I think they have to do a maintenance shut normally in May.

Speaker #5: Could you just provide us with an update around water supply?

Scott Barber: Yeah. Thanks, James. This is Scott here. The desal plant is in full operation. We haven't had any major disruptions to the water year to date. There was a little bit of sulfur in the quarter, but nothing that really stopped us. Our bladders and TSFs, evap ponds are all full. There was actually a little bit of rain through the quarter, and that actually topped up all of our water supplies. For us, yeah, water's not a major issue. There is a desal shutdown planned late in June, and we're just monitoring that, but we've got enough water to get through that.

Speaker #3: Yeah, thanks, James. This is Scott here. The decel plant is in full operation. We haven't had any major disruptions to the water year to date.

Speaker #3: There was a little bit of sulphur in the quarter, but nothing that really stopped us. Our bladders and TSFs evap ponds are all full.

Speaker #3: There was actually a little bit of rain through the quarter, and that actually topped up all of our water supplies. So for us, yeah, water's not a major issue.

Speaker #3: There is a decel shutdown planned late in June, and we're just monitoring that. But we've got enough water to get through that.

James Bullen: Great. Thank you very much. Just heading across to PLS and the mutual benefit agreements there, I think you've got two First Nation agreements done. When NexGen went through this process, it took them well over 12 months longer than the others to get an agreement with Métis. Is this a risk to your FID timing at all, getting an MBA with the MNS?

Speaker #2: Great, thank you very much. And just hitting across to PLS and the mutual benefit agreements there—I think you've got two First Nation agreements done.

Speaker #2: When NextGen went through this process, it took them well over 12 months longer than the others to get an agreement with Metis. Is this a risk to your FID timing at all, getting an MBA with the MNS?

Paul Hemburrow: Thanks, James. It's not absolutely compulsory to have a mutual benefit agreement, but of course, it's what we want to do. We would like all of the stakeholders in the region to benefit from our presence there. If it takes a bit longer, it takes a bit longer. The most important thing is the engagement and consultation process. We'll continue to engage and consult with all of the First Nations group. As you pointed out, we do have two MBAs in place with Clearwater River Dene Nation and Buffalo River Dene Nation. We'll continue to work on those. The other two are close. We're in negotiations right now. We'll just keep working towards that. It's not a prerequisite for receiving our permit to construct.

Speaker #3: Thanks, James. It's not absolutely compulsory to have a mutual benefit agreement, but of course, it's what we want to do. We would like all of the stakeholders in the region to benefit from our presence there.

Speaker #3: So, if it takes a bit longer, it takes a bit longer. The most important thing is the engagement and consultation process. So, we'll continue to engage and consult with all of the First Nations groups.

Speaker #3: And as you pointed out, we do have two MBAs in place with Clearwater River Dene Nation and Buffalo River. So we'll continue to work on those.

Speaker #3: The other two are close. We're in negotiations right now, and we'll just keep working towards that. But it's not a prerequisite for receiving your permit to construct.

James Bullen: Great. Thanks very much, Paul and Scott.

Speaker #2: Great, thanks very much, Paul and Scott. Thank you. The next question comes from Daniel Roden from Jefferies. Please go ahead.

Paul Hemburrow: Thanks.

Paul Hemburrow: Thank you. The next question comes from Daniel Roden from Jefferies. Please go ahead.

Operator: Thank you. The next question comes from Daniel Roden from Jefferies. Please go ahead.

Daniel Roden: Good day, guys. Thanks for taking my question and, yeah, congratulations on the solid quarter. Just wanted to, I guess, get a view on, I guess, Q4 run rates. I guess the run rate's a little lower than your Q3, in the implied updated guidance. Just a little bit of color around, I guess, what's going on and what's driving, I guess, the lower Q4, and then how should we think about that kind of the run rate entering FY27?

Speaker #4: Hello, guys. Thanks for taking my question. And yeah, congratulations on the solid quarter. Just wanted to, I guess, get a view on, I guess, Q4 run rates.

Speaker #4: It's a little—I guess the run rates are a little lower than your Q3 in the implied updated guidance. And so just a little bit of color around, I guess, what's going on and what's driving, I guess, the lower Q4, and then how should we think about that kind of as the run rate entering FY27?

Paul Hemburrow: Thanks, Dan. As I often say, it's an outdoor sport and all sorts of things can happen. We've reset the guidance to that range of 4.5 to 4.8. I think it's realistic and achievable. Our current rate is, I think we're very satisfied with how we've gone. We've also moved to the back end of the G pit. We're now moving into the next pit. There's that sort of transition process where you can typically get slightly lower grades as we move into the main ore body. We can get different ore handling characteristics. There's a few things that could happen. In the meantime, we're trying to mitigate those risks with a number of different controls. Our blending strategy for handleability, blending strategy for grade. We plan on maintaining the positive performance that we've seen in overall recovery rates.

Speaker #3: Thanks, Dan. As I often say, it's an outdoor sport, and all sorts of things can happen. So we've reset the guidance to that range of 4.5 to 4.8.

Speaker #3: I think it's realistic and achievable. Our current rate is—I think we're very satisfied with how we've gone. We've also moved to the back end of the GPIT, and we're now moving into the next PIT.

Speaker #3: So there's that sort of transition process where you can typically get slightly lower grades as we move into the main ore body. We can get different ore handling characteristics.

Speaker #3: So, there are a few things that could happen. In the meantime, we're trying to mitigate those risks with a number of different controls. Now, our blending strategy for handleability, blending strategy for grade, and we plan on maintaining the positive performance that we've seen in overall recovery rates.

Speaker #3: So, there's still a couple of months to go for this quarter, but we're very happy with progress to date. However, there are a few things that could happen.

Paul Hemburrow: There's still a couple of months to go for this quarter. We're very happy with progress to date, but there are a few things that could happen.

Daniel Roden: Yeah. Excellent. I guess just on that, when you're looking at Q4 and FY27, your recovery in Q3 has been, I think, well above expectations, even at a bit of a lower grade. I guess just what's your assumption that you're using for your guidance on the recovery? I guess, is there a bit of upside potential there?

Speaker #4: Yeah, excellent. And I guess just on that, when you're looking at Q4 and FY27, your recovery in Q3 has been, I think, well above expectations, even at a bit of a lower grade.

Speaker #4: So, I guess, just what's your assumption that you're using for your guidance on the recovery? And, I guess, is there a bit of upside potential there?

Paul Hemburrow: We set our target range of 85 to 90. That's typically the level at which this plant can operate. I think the team at Langer Heinrich has done an exceptional job at tuning that performance throughout their consumption of G pit. I certainly don't expect that we'll stay in that range. I think, as long as we hit the target range of 85 to 90, I'll be pretty happy. In terms of FY 2027, I think we still plan to provide guidance in July. However, I sort of caveat that now with a level of uncertainty around what's happening in the Middle East. I don't really want to provide too much of a look forward.

Speaker #3: No. We set our target range at 85 to 90. That's typically the level at which this plant can operate. And I think the team at Lang & Heinrich has done an exceptional job at tuning that performance throughout their consumption of GPIT.

Speaker #3: And—but I certainly don't expect that we'll stay in that range. I think as long as we hit the target range of 85 to 90, I'll be pretty happy.

Speaker #3: In terms of FY27, I think we're still planning to provide guidance in July. However, I must sort of caveat that now with a level of uncertainty around what's happening in the Middle East.

Speaker #3: And so I don't really want to provide too much of a look forward.

Daniel Roden: Yep. Awesome. If I could slip one last one in. Just, you've provided a sensitivity on, I guess, realized pricing at the various levels of spot pricing historically. I guess, when you were looking forward to FY27, FY28, et cetera, is that sensitivity analysis that you've provided, is that still a fair indication of the sensitivity you would expect on, I guess, realized pricing at different spot pricing? Or, I guess, if you're changing your contract book as that contract book matures, would you expect that sensitivity to change?

Speaker #4: Yeah, awesome. And if I could slip one last one in—just, you've provided a sensitivity on, I guess, realized pricing at various levels of spot pricing historically.

Speaker #4: I guess when we're looking forward to FY27, 28, etc., is that sensitivity analysis that you've provided— is that still a fair indication of the sensitivity you would expect on, I guess, realized pricing at different spot pricing?

Speaker #4: Or I guess, if you're changing your contract book, as the contract book matures, would you expect that sensitivity to change?

Paul Hemburrow: Yeah. Dan, thanks. Alex here. I think we'll provide an updated realized price sensitivity. I think generally speaking, we're very pleased with the way our book has performed this quarter and year to date. It's running pretty much bang on with that matrix that we provided, realizing just under $70 a pound for year to date at an average uranium price of $80. The next years, again, without sort of getting into the look forwards, will be provided in due course. Obviously, we've got 22 million pounds under contract, and that book has remained stable, so you don't expect to see massive shifts in that. As our volumes open up, we do have more uncontracted and more market-related exposure. We expect to realize that upside there.

Speaker #3: Yeah, Dan, thanks. Alex here. I think we'll provide an updated realized price sensitivity. I think generally speaking, we're very pleased with the way our book has performed this quarter and year to date.

Speaker #3: It's running pretty much bang on with the matrix that we provided, realizing just under $70 a pound for year to date, at an average uranium price of $80.

Speaker #3: The next year is, again, without sort of getting into the look forwards, we'll be provided in due course. But obviously, we've got £22 million under contract, so you don't—and that book has remained stable, so you don't expect to see massive shifts in that.

Speaker #3: But as that opens, volumes open up, we do have more uncontracted and more market-related exposure. So we expect to realize that upside there.

Daniel Roden: Yep. No, perfect. Thank you very much, guys. I'll pass it on. Thanks.

Speaker #4: Yep. Yep. No. Perfect. Thank you very much, guys. I'll pass along. Thanks.

Daniel Roden: Thank you. The next question comes from Dim Ariyasinghe from UBS. Please go ahead.

Operator: Thank you. The next question comes from Dim Ariyasinghe from UBS. Please go ahead.

Speaker #2: Thank you. The next question comes from Tim Arya Singh from UBS. Please go ahead.

Dim Ariyasinghe: Thanks, Paul. Thanks, Tim. Just a question on the revision to CapEx expenditure. Not big numbers, but just wanted to expand on why that's been done in the context of, I guess, what's going on more broadly, please.

Speaker #5: Thanks, Paul. Thanks, Tim. Just a question on the revision to CapEx expenditure. Not big numbers, but just wanted to expand on why that's been done.

Speaker #5: In the context of, I guess, what's going on more broadly, please?

Anna Sudlow: Sorry, Tim. Was that in relation to the update to the guidance?

Speaker #3: Sorry, Tim. Was that in relation to the update to the guidance?

Dim Ariyasinghe: Yeah. Exactly. For the CapEx.

Speaker #5: Yeah, yeah, exactly. Yeah, for the CapEx.

Anna Sudlow: Yeah. Look, I think, we obviously put the guidance together 12 months ago. As it has progressed, there's been reprioritization of those items, the deferral, and then also the bringing forward of some other items. It's really just a shifting of CapEx. Some of that CapEx will be deferred into FY 2027.

Speaker #6: Yeah. So look, I think we obviously put the guidance together 12 months ago. It has progressed. There's been reprioritization of those items—the deferral, and then also the bringing forward of some other items.

Speaker #6: So it's really just a shifting of CapEx. Some of that CapEx will be deferred into FY 2027.

Dim Ariyasinghe: Okay. Cool. Nothing too strange. Then, I guess, there was a question on reagent use and I understand you guys are alkaline leach. Do you guys have any more comments or any read-throughs more broadly? On your competitors domestically who use a lot of sulfur and then the big one. Are you hearing anything, either from your customers or the industry more broadly on sulfur shortages?

Speaker #5: Okay, cool. So nothing too strange. And then I guess there was a question on reagent use—I understand you guys are alkaline leach. But do you guys have any more comments or any read-throughs more broadly?

Speaker #5: So, on your competitors' domestic leads—who use a lot of sulfur—and then the big one, if they feel like that's, yeah. Are you hearing anything either from your customers or the industry more broadly on sulfur shortages?

Paul Hemburrow: No. We don't really comment on other people's business. As I said earlier in the call, Dim, between 3 and 10, that's our area of focus right now, is making sure that we have continuity and supply. We're reasonably confident at least for the next 3 months.

Speaker #3: No, we don't really comment on other people's positions. But as I said earlier in the call, Tim, between 3 and 10. That's our area of focus right now—making sure that we have continuity in supply.

Speaker #3: So we're reasonably confident, at least for the next three months.

Dim Ariyasinghe: Yep, sure. Cool. Just the last one. How's everything going on the diesel front? Is that similar? Or what does that look like?

Speaker #5: Yep. Sure. Cool. And then just last one—how's everything going on the diesel front? Is that similar? Or, yeah, what does that look like?

Paul Hemburrow: About at least 80% of our diesel and HFO come from West Africa. There's very good-

Speaker #3: About 80% of our diesel and HFI come from West Africa, and so that's very, very good.

Paul Hemburrow: Pardon me. Just confirming this speaker line is still connected.

Operator: Pardon me. Just confirming this speaker line is still connected.

Speaker #5: Yeah.

Speaker #2: Pardon me. Just confirming the speaker line is still connected?

Paul Hemburrow: Yes.

Speaker #3: Yes.

Paul Hemburrow: Thank you. I'll move on to the next question. It comes from Glenn Lacock from Barrenjoey. Please go ahead.

Operator: Thank you. I'll move on to the next question. It comes from Glenn Lacock from Barrenjoey. Please go ahead.

Speaker #2: Thank you. I'll move on to the next question. It comes from Glenn Lawcock from Barron Joey. Please go ahead.

Glenn Lacock: Morning, Paul. I just wanted to sort of talk a bit more about the guidance change. Obviously, you lifted production guidance by 11%, but you didn't change your cost guidance at all. And if you just do the mathematics, I mean, 1.2 million pounds production in the Q4 to get to the bottom end of your cost range means costs go up to $54 a pound in the Q4 when they've averaged $40 to date. You just didn't change your cost guidance or is there something materially going to change in the Q4 to get there? Thanks.

Glyn Lawcock: Morning, Paul. I just wanted to sort of talk a bit more about the guidance change. Obviously, you lifted production guidance by 11%, but you didn't change your cost guidance at all. And if you just do the mathematics, I mean, 1.2 million pounds production in the Q4 to get to the bottom end of your cost range means costs go up to $54 a pound in the Q4 when they've averaged $40 to date. You just didn't change your cost guidance or is there something materially going to change in the Q4 to get there? Thanks.

Speaker #7: Morning, Paul. I just wanted to sort of talk a bit more about the guidance change. Obviously, you lifted production guidance by 11%, but you didn't change your cost guidance at all.

Speaker #7: And if you just do the mathematics, I mean, 1.2 million pounds production in the final quarter to get to the bottom end of your cost range means costs go up to $54 a pound in the final quarter.

Speaker #7: When they've averaged 40 to date, so you just didn't change your cost guidance? Or is there something materially going to change in the final quarter to get there?

Speaker #7: Thanks.

Anna Sudlow: Glenn, there's a couple of things. One, I think as Paul mentioned, we will be mining for the Q4, so there'll be no reliance on the medium grade stockpile. We were obviously getting a benefit from that in the prior quarters. We are starting to see some cost escalation as a result of the conflict in the Middle East. I think there's some uncertainty around what that will look like. I think, we've done the analysis on the range, and we're comfortable with the range we've provided at this point.

Speaker #3: So Glenn, there's a couple of things. One, I think, as Paul mentioned, we will be mining for the final quarter, so there'll be no reliance on the medium-grade stockpile.

Speaker #3: So, we were obviously getting a benefit from that in the prior quarters. We are starting to see some cost escalation as a result of the conflict in the Middle East.

Speaker #3: So, I think there's some uncertainty around what that will look like. So, I think there's a view that we would rather be conservative on what that may be for the final quarter as well.

Speaker #3: So, I think we've done the analysis on the range, and we're comfortable with the range we're provided at this point.

Glenn Lacock: Okay. It's a big number. Maybe just staying on that same tack then. If you look at the spend in the quarter then just gone, Langer Heinrich cost $52 million, the stockpile bill $11 million, so $63 million plus another $7 million for stripping. If you ignore the stripping, is that meaning that $63 million steps up a fair bit from a cash perspective in the Q4 then when you just say you'll be full mining for the fleet?

Glyn Lawcock: Okay. It's a big number. Maybe just staying on that same tack then. If you look at the spend in the quarter then just gone, Langer Heinrich cost $52 million, the stockpile bill $11 million, so $63 million plus another $7 million for stripping. If you ignore the stripping, is that meaning that $63 million steps up a fair bit from a cash perspective in the Q4 then when you just say you'll be full mining for the fleet?

Speaker #7: Okay. It's a big number. Maybe just staying on that same tack then. So if you look at the spend in the quarter just gone, Langer Heinrich cost $52 million, the stockpile bill $11 million.

Speaker #7: So, $63 million plus another $7 million for stripping. If you ignore the stripping, does that mean that the $63 million steps up a fair bit? From a cash perspective in the final quarter then?

Speaker #7: When you just say you’ll be full mining for the fleet?

Anna Sudlow: I think the low-grade stockpile and the stripping, I think we're saying, varies quarter to quarter. I probably won't comment on what the forecast outlook for those is. As far as the production costs, yeah, we do expect them to be higher in the next quarter.

Speaker #3: I think, look, the low-grade stockpile and the stripping—I think we're saying varies quarter to quarter. So I probably won't comment on what the forecast outlook for those is.

Speaker #3: But as far as the production costs, yeah, we do expect them to be higher in the next quarter.

Glenn Lacock: In a $ millions perspective, higher than the 52? Yep. Then if I could just ask on the sales as well. You've kept your sales guidance the same. If you sell what's left to sell to hit the top end of your range, selling at the price you're probably going to receive, you're still probably not going to cover all your cash outflow in the quarter. Can you sell more or are you choosing not to? I'm just trying to understand why, with the increased volume, you're choosing not to cover your cash, it appears, with sales. Or is it because you're waiting for higher prices or what? Thanks.

Glyn Lawcock: In a $ millions perspective, higher than the 52? Yep. Then if I could just ask on the sales as well. You've kept your sales guidance the same. If you sell what's left to sell to hit the top end of your range, selling at the price you're probably going to receive, you're still probably not going to cover all your cash outflow in the quarter. Can you sell more or are you choosing not to? I'm just trying to understand why, with the increased volume, you're choosing not to cover your cash, it appears, with sales. Or is it because you're waiting for higher prices or what? Thanks.

Speaker #7: In a dollar-millions perspective, higher than the $52 million. Yep. And then if I could just ask on the sales as well—I mean, you've kept your sales guidance the same.

Speaker #7: If you sell what's left to sell to hit the top end of your range, selling at the price you're probably going to receive, you're still probably not going to cover all your cash outflow in the quarter.

Speaker #7: Is it that you can sell more, or are you choosing not to? I'm just trying to understand why, with the increased volume, you're choosing not to cover your cash.

Speaker #7: Is it to do with sales, or is it because you're waiting for higher prices? Or what? I'm just trying to understand. Thanks.

Paul Hemburrow: Glenn, I'll take this one. Our sales, as I said last quarter, we are trending towards the top end of the guidance range for our sales, all things being equal, shipping delays, et cetera. We're pretty comfortable with that range, so we've left it unchanged. Obviously, there is a delay between production and sales. Even if you're producing more, you don't necessarily able to realize those sales in the same period. We are seeing performance towards the top end of that range.

Speaker #3: Glenn, I'll take this one. So, our sales, as I said last quarter, are trending towards the top end of the guidance range for our sales.

Speaker #3: All things being equal—shipping delays, etc.—but we're pretty comfortable with that range, so we've left it unchanged. Obviously, there is a delay between production and sales.

Speaker #3: So even if you’re producing more, you’re not necessarily able to realize those sales in the same period. But we are seeing performance towards the top end of that range.

Glenn Lacock: All right. Thank you.

Glyn Lawcock: All right. Thank you.

Speaker #7: All right. Thank you.

Glenn Lacock: Thank you. The next question comes from Branko Skosic from JPMorgan. Please go ahead.

Operator: Thank you. The next question comes from Branko Skosic from JPMorgan. Please go ahead.

Speaker #2: Thank you. The next question comes from Branko Skosec from JP Morgan. Please go ahead.

Branko Skosic: Yeah. Morning, guys. Thanks for your time. Just first question on the finished product inventories. Can we expect a bit of an unwind strategy to progress into FY27? Obviously, the current numbers seems a little bit elevated, probably unwinds a bit in Q4, but just interested in your views over the next 6 to 12 months, please.

Speaker #8: Morning, guys. Thanks for your time. Just first question on the future product inventories. Can we expect a bit of an unwind strategy to progress into FY27?

Speaker #8: Obviously, the current number seems a little bit elevated—probably unwind a bit in the fourth quarter. But just interested in your views over the next 6 to 12 months, both.

Paul Hemburrow: Yeah. Agreed. It is a slightly elevated level. Our inventories do fluctuate from quarter to quarter. Probably on a normalized average basis, we expect about four months of production to be our normal average inventory level. This quarter, that inventory level was impacted by a shipping delay, so we had quite a large number of pounds on the water as at 31 March, so that was the primary result. Yeah, about four months of production on an average basis.

Speaker #3: Yeah, agreed. It is a slightly elevated level. Our inventories do fluctuate from quarter to quarter. Probably on a normalized average basis, we expect about four months of production to be our normal average inventory level.

Speaker #3: This quarter, that inventory level was impacted by shipping delays. So we had quite a large number of pounds on the water as of the 31st of March.

Speaker #3: So that was the primary result. But yeah, about four months of production on an average basis.

Branko Skosic: Thanks. That makes sense. Final question from me was just, I guess, critical path to getting the mine fully ramped up over the next 3 to 6 months. I guess what's the focus internally, and what's something we can be watching for come June, July?

Speaker #8: All right, thanks. That makes sense. And final question from me—it was just, I guess, the critical path to getting the mine fully ramped up over the next three to six months.

Speaker #8: I guess, what’s the focus internally, and what’s something we can be watching for come June or July?

Scott Barber: Yeah. In terms of the mine, getting into J-pit and developing that, we're about a bench and a half in currently and already touching ore. That's going to start making its way to the ROM. Developing that pit, which is a little bit further away from the ROM than G-pit. Just optimizing the haulage, getting the equipment operating exactly as we want it to. All of the equipment is in and operating, and the contractor's done a really great job in getting all the people and everything up and running. As we finish G-pit, move into J-pit, getting the blend right and just really optimizing that through the mill as we see that new ore. Really, for the mine, the equipment is on-site. It's just getting it onto the ROM and seeing how it performs through the mill.

Speaker #3: Yeah. In terms of the mine getting into JPIT and developing that, we're about a bench and a half in currently, and already touching ore.

Speaker #3: So that's going to start making its way to the ROM. Developing that PIT, which is a little bit further away from the ROM than GPIT.

Speaker #3: So just optimizing the haulage, getting the equipment operating exactly as we want it to. All of the equipment is in and operating, and the contractor's done a really great job in getting all the people and everything up and running.

Speaker #3: But as we finish GPIT, move into JPIT, getting the blend right and just really optimizing that through the mill as we see that new ore.

Speaker #3: So really, for the mine, the equipment is on site. It's just getting it onto the ROM and seeing how it performs through the mill.

Branko Skosic: All right. Appreciate that. Thank you.

Speaker #8: All right. Appreciate that. Thank you.

Branko Skosic: Thank you. The next question comes from Matthew Hope from Ord Minnett. Please go ahead.

Operator: Thank you. The next question comes from Matthew Hope from Ord Minnett. Please go ahead.

Speaker #2: Thank you. The next question comes from Matthew Hope from Ordminute. Please go ahead.

Matthew Hope: Yeah. Thanks very much. I was just wondering if you could give us a rough guide as to how much diesel makes up the cost of production.

Speaker #9: Yeah, thanks very much. I was just wondering if you could give us a rough guide as to how much diesel makes up the cost of production?

Paul Hemburrow: Yeah. We typically don't go into that level of detail, Matthew.

Speaker #3: Yeah, we typically don't go into that level of detail, Matthew. Yeah, I mean, I think, Matthew, what we can say is the mining contract obviously has a portion of their costs related to diesel.

Anna Sudlow: Yeah. I think, Matthew, what we can say is, the mining contractor obviously has a portion of their costs related to diesel. There's a small amount of diesel used in the plant. Other than that, I'd say it's fair to say it's sub-10, 15% of the total cost of production.

Speaker #3: There's a small amount of diesel used in the plant. Other than that, I'd say it's fair to say it's sub-10, 15 percent of the total cost of production.

Matthew Hope: Okay. With that, you don't expect a big impact from, obviously the current global diesel issues. You don't expect a huge impact on your costs?

Speaker #9: Okay, so with that, you don't expect a big impact from, obviously, the current global sort of diesel issues? You don't expect a huge impact on your costs?

Anna Sudlow: Well, I think ultimately.

Speaker #3: Well, I think ultimately.

Matthew Hope: You provided really no guidance on what is happening due to this conflict.

Speaker #9: Provide really no guidance on what is happening due to this conflict?

Anna Sudlow: Yeah. Obviously we're monitoring that, but the ultimate impact is going to be dependent on what the price outcome is, right? I think it's obviously not a significant cost. To the extent there is a material increase, it will have some impact.

Speaker #3: Yeah, so look, obviously we're monitoring that. But the ultimate impact is going to be dependent on what the price outcome is, right? So I think it's obviously not a significant—

Speaker #3: Costs. But to the extent there is a material increase, we'll have some impact.

Matthew Hope: Sure. Okay. Thanks very much.

Speaker #9: Sure. Okay. Thanks very much.

Matthew Hope: Thank you. The next question comes from Shannon Sinha from Ventum Financial. Please go ahead.

Operator: Thank you. The next question comes from Shannon Sinha from Ventum Financial. Please go ahead.

Speaker #2: Thank you. The next question comes from Sarah S. from Ventum Financial. Please go ahead.

Matthew Hope: Hi, team. Thanks for taking my call, and congrats on another quarter. I'll start with a question on PLS. What gives you optimism about a successful resolution of the legal issue with MNS?

Surya Sankarasubramanian: Hi, team. Thanks for taking my call, and congrats on another quarter. I'll start with a question on PLS. What gives you optimism about a successful resolution of the legal issue with MNS?

Speaker #10: Hi, team. Thanks for taking my call, and congrats on another quarter. I'll start with a question on PLS. What gives you optimism about a successful resolution of the legal issue with M&S?

Paul Hemburrow: Thanks for the question. I've met with all of the chiefs and councils of the four parties that we're close to, and we have a really good relationship with them. I think it's really just a matter of time to continue consultation. I think that it'd be unsurprising to say that everybody in the communities in that region, I think, could have some benefit of our presence there, and that's not an unreasonable expectation. Of course, the challenge is, how do we find a resolution to this in a way that's economically sensible for us as well? We'll continue to consult with them, and work through the process.

Speaker #3: Thanks for the question. I've met with all of the chiefs and councils of the four parties that we're close to, and we have a really good relationship with them.

Speaker #3: And I think it's really just a matter of time to continue consultation. I think that it'd be unsurprising to say that

Speaker #1: Everybody in the communities and that region, I think, have some benefit of our presence there. And that's not an unreasonable expectation.

Speaker #1: And and of course , the challenge is how do we find how do we find a resolution to this in a , in a way that's economically sensible for us as well .

Speaker #1: And , and so we'll continue to consult with them and work through the process . And we've seen other other mining companies , other projects in very close proximity , proximity to us work through that process .

Paul Hemburrow: We've seen other mining companies, other projects in very close proximity to us, work through that process and have successful outcomes. What we've also seen is the timing of delivery of an MBA is completely independent of the EIS approval process and the CNSC process. We'll just keep going as long as it takes. In the meantime, the most important thing for us right now is to consult effectively with them, but also to progress the project through the engineering works, and satisfy the requirements of the CNSC. The project economics are incredibly strong. It's a great project, and we have a lot of confidence in the team's ability to work through these issues as they come up.

Speaker #1: And have successful outcomes. What we've also seen is the timing of delivery of an MBA is completely independent of the ICE approval process and the NSC process.

Speaker #1: So, so we'll just keep going as long as it takes. In the meantime, we're not going to provide guidance into next year until we get through this year.

Paul Hemburrow: All right. Thank you. I'll just follow up on another question that was previously asked about run rates. If we were to extrapolate from, let's say, production in the month of June, when hopefully the ramp-up is done, would that lead to, say, on an annual basis, 6 million pounds of production? Or what would it lead to?

Surya Sankarasubramanian: All right. Thank you. I'll just follow up on another question that was previously asked about run rates. If we were to extrapolate from, let's say, production in the month of June, when hopefully the ramp-up is done, would that lead to, say, on an annual basis, 6 million pounds of production? Or what would it lead to?

Paul Hemburrow: We're not going to provide guidance into next year until we get through this year. I think there's a level of uncertainty out there now with respect to what's happening in the Middle East, of course. I think it's a difficult time for anybody to predict how that's going to unravel. What we can say, though, is we have reset our guidance range for the remainder of this year. I think that number is challenging but achievable. What we'll do now for the remainder of the year is to continue to go through our budgeting process, assess the performance of Scott's optimization work, and then at an appropriate point in time, we'll provide guidance to give people an update on the basis of a more well-informed view of 2027.

Speaker #1: I think there's a there's a level of uncertainty out there . Now with respect to , you know , what's happening in the Middle East , of course .

Speaker #1: And I think it's it's a difficult time for anybody to predict how that's going to unravel what we can say , though , is , is we have reset our guidance range for the remainder of this year .

Speaker #1: I think that number is challenging , but achievable . And and what we'll do now for the remainder of the year is to continue to go through our budgeting process , assess the performance of optimization work , and then at an appropriate point in time , we'll provide guidance to give people an update on on the basis of more , you know , more well-informed view of , of our 27 .

Speaker #2: Okay . Thank you . I was just my question was , I think , motivated by a , a peak production rate outlined in a , in a life of mine production plan .

Paul Hemburrow: Okay. Thank you. My question was, I think, motivated by a peak production rate outlined in a life of mine production plan that was put out earlier.

Surya Sankarasubramanian: Okay. Thank you. My question was, I think, motivated by a peak production rate outlined in a life of mine production plan that was put out earlier.

Speaker #2: Was put out earlier , but I look forward to the , to the actual guidance .

Paul Hemburrow: Yes.

Paul Hemburrow: I look over to the actual guidance.

Surya Sankarasubramanian: I look over to the actual guidance.

Speaker #1: Yeah , thanks . I think , you know , a peak really depends on , on a number of factors and primarily it's your throughput rates through the mill overall recovery rates and great .

Paul Hemburrow: Yeah. Thanks. I think, peak production really depends on a number of factors, and primarily it's your throughput rates through the mill, overall recovery rates, and grade. Under different price scenarios, we might choose to do something quite different. In a different higher price scenario, we might do something different to what we would do in a high diesel price scenario. The plan ultimately depends on how things play out over the coming months, in combination with how our performance is over that same period. It is a bit difficult to give you a more firm answer.

Speaker #1: And under different price scenarios , we might choose to do something quite different . So in a different new price scenario , we might do something different to what we would do in a high diesel price scenario .

Speaker #1: So, the plan ultimately depends on how things play out over the coming months, in combination with how our performance is over.

Speaker #1: That same period. So it is a bit difficult to give you a more firm answer.

Speaker #2: Thank you. My final question would be, maybe a possible comment from you on something that came up on Bloomberg a few days ago about the US Ambassador to Namibia saying that they were expecting to increase imports of uranium from Namibia to the USA.

Paul Hemburrow: Thank you. My final question would be, maybe a possible comment from you on something that came up on Bloomberg a few days ago about the US ambassador to Namibia saying that they were expecting to increase imports of uranium from Namibia to the USA. I was wondering if you've been in discussions of that nature with parties in the USA. Yeah.

Surya Sankarasubramanian: Thank you. My final question would be, maybe a possible comment from you on something that came up on Bloomberg a few days ago about the US ambassador to Namibia saying that they were expecting to increase imports of uranium from Namibia to the USA. I was wondering if you've been in discussions of that nature with parties in the USA. Yeah.

Speaker #2: I was wondering if within discussions with of that nature , with parties in the USA . Yeah

Speaker #1: Yeah. Look, there has been a lot of interest in Namibian supply from across the globe. We were just at the World Nuclear Fuel Cycle conference last.

Paul Hemburrow: Yeah. Look, there has been a lot of interest in Namibian supply from across the globe. We were just at the World Nuclear Fuel Cycle conference last week. There's a lot of interest from the US utilities. I think generally the mood is getting, the US utilities are certainly getting more urgent in their requests for supply, and I think they are being prompted by the US government to secure supplies and secure inventories. We've obviously had direct interactions with the representatives from US embassies as well. Having said that, I guess there isn't anything sort of concrete at this point in time. We do see also very strong demand from other regions, specifically from China.

Speaker #1: You know , there's a lot of interest from the US utilities . I think the generally the mood is getting , you know , the US utilities are certainly getting more urgent in their requests for supply .

Speaker #1: And I think they are being prompted by the US government to secure supplies and secure inventories. You know, we've obviously had direct interactions with the representatives from US embassies as well.

Speaker #1: And you know but but having said that , it's I guess it's you know , there isn't anything sort of concrete at this point in time .

Speaker #1: We do see also very strong demand from from other regions , specifically from China The Chinese utilities continue to be very , very aggressive in their fuel purchasing , driven by their reactor build out programs , chasing supply across the region , as evidenced by the tango deal that's seen and see is in the process of completing .

Paul Hemburrow: The Chinese utilities continue to be very aggressive in their fuel purchasing, driven by their reactor build-out programs, chasing supply across the region, as evidenced by the Etango deal that CNNC is in the process of completing. We're in a very fortunate position in Namibia with that origin being highly sought after, both by the Chinese, by the US, as well as the European counterparties that have lost some supply from Niger. We'll aim to maximize the value of our Namibian production for the benefit of our shareholders.

Speaker #1: So we're in a very fortunate position in Namibia, with that origin being highly sought after both by the Chinese, by the US, as well as the European counterparties that have lost some supply from Niger.

Speaker #1: And we'll aim to maximize the value of that in Nigeria, and of our Namibian production, for the benefit of our shareholders.

Paul Hemburrow: Thanks for that, and all the best for Q4.

Surya Sankarasubramanian: Thanks for that, and all the best for Q4.

Speaker #2: Thanks for that. And all the best for the fourth quarter.

Speaker #3: Thank you. At this time, we're showing no further questions. I'll hand the conference back to Paul for any closing remarks.

Paul Hemburrow: Thank you. At this time, we're showing no further questions. I'll hand the conference back to Paul for any closing remarks.

Operator: Thank you. At this time, we're showing no further questions. I'll hand the conference back to Paul for any closing remarks.

Speaker #1: Thank you very much. The progress across the portfolio of activities has been really positive. We continue to build momentum in both production and project progress at PLS.

Paul Hemburrow: Thank you very much. The progress across the portfolio of activities has been really positive. We continue to build momentum in both production and project progress at PLS. However, we maintain a close watch on the Middle East for any potential impact on our business over the coming months. Thank you for your questions, and thank you for your ongoing interest in Paladin, and have a good day.

Q3 2026 Paladin Energy Ltd Earnings Call

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