Paladin’s Kayelekera uranium mine delivers record production

With a few more months to go before the year winds up, Paladin Energy Limited says the year has been a milestone for its Kayelekera Uranium Mine in Karonga in terms of production.

The firm says in its 2012 Annual Report which includes audited financial statements for the year ended 30 June 2012 together with management, discussion and analysis, Kayelekera has delivered a record production.

This is despite the fact that the company recorded a net loss of US$137.7 million for the period July 2011 to March 31st 2012 with Uranium Oxide prices dropping following the Fukushuma Nuclear disaster in Japan.

“Kayelekera Mine delivered record production of 2.478Mlb U3O8 for the year, an increase of 14% over the previous year. The project operated consistently at 90% of nameplate for the last 8 months of the year,” it says.

Kayelekera Uranium Project in Malawi

It adds that the financial year 2012 has been a milestone year for the Company achieving nameplate and for the financial year 2013 it will be the first year for it to operate without distracting construction and commissioning activities running in parallel.

Paladin further says in this new environment the company is well placed to optimise efficiencies and costs on its operations and benefit from returns.

The company also salutes President Joyce Banda’s decision to devalue the Malawi Kwacha by almost 50 percent in the last quarter of the year as a positive development for the Malawian economy and for Kayelekera Mine’s cost optimisation progress.

“Kayelekera achieved 0.726Mlb U3O8 production in the June 2012 quarter, 88 percent of nameplate capacity, despite a seven-day disruption due to industrial action in May,” says the company.

However, Paladin says during the year, production was impacted by a planned plant upgrade shutdown in August 2011, unscheduled remediation work in September/October 2011 totalling 2 months and industrial action by Malawian workers in May 2012 which took seven days.

Kayelekera Mine also delivered record quarterly U3O8 production achieved in June 2012 quarter of 0.726Mlb U3O8, 88 percent of design capacity consistent with March 2012 quarterly production and another record production in June 2012 at 96 percent of nameplate.

“The key production measures for the Kayelekera bankers’ technical completion test, covering 90 days from 1 November 2011 to 31 January 2012, have been passed and work is continuing on final completion test certification,” says Paladin.

After tax of US$172.8 million, Kayelekera Mine recorded net loss for the year, mainly as a result of the US$133M (post-tax) impairment associated with the write down of the Kayelekera assets in the quarter ended September 2011.

Paladin has so far paid the Malawi government a total of MWK 469.4 million in royalties and MWK 3.6 billion in taxes.

It has also coughed up to about US$ 15,824,793 (MK4.8 billion) on social development projects for Karonga district significantly exceeding its obligation to spend $US 10 million (MK3 billion) as per the development agreement signed with the Malawi government.

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