Paladin share surge
1¢ in 2003, $8+ in 2006
URANIUM miner Paladin Resources Ltd has provided shareholders with a late Christmas present after its shares yesterday surged over $8.
The stock peaked at an all-time intraday high of $8.29 before pulling back to close at $8.26, capitalising the company at about $4.1 billion.
Paladin recently commissioned its $120 million flagshipLanger Heinrich mine in Namibia and is expected to make the first shipment of uranium oxide concentrates at the end of March.
The company’s strong run has also been partly fuelled by an increasing uranium spot price that has surged over $US30 during the course of the year and i s currently fetching $US72 per pound.
While investors pile into Paladin, brokerage UBS is taking a cautious approach to the new uranium miner.
‘‘While we think the outlook for both uranium prices and the company itself remains strong, we are taking a more cautious view until we see demonstration of pro- duction out of Langer Heinrich,’’ UBS said in a client note.
‘‘We believe operational risks will remain until demonstrated otherwise.’’
Langer Heinrich is expected to rampup to a rate of 2.6 million pounds per annum over a 12 month period, before expanding to produce about 3.7 million pounds annually.
Paladin picked up Langer Heinrich for $15,000 in 2002 when the company had only about $50,000 in its coffers.
The uranium miner plans to increase its production profile to 7.5 million pounds per annum by late 2008 after it brings its second project, Kayelekera, in Malawi, online.
Paladin also holds a swag of assets in Australia.
In 2003, Paladin shares were trading at about one cent.
FLAGSHIP . . . Langer Heinrich mine