The ASX uranium miner’s shares have had a week to remember…
The post The Paladin (ASX:PDN) share price is up 19% in the last week. Here’s why appeared first on The Motley Fool Australia. –
The Paladin Energy Ltd (ASX: PDN) share price continues to seemingly defy gravity.
Paladin shares are up an eye-watering 19.28% in just the past week alone (since last Tuesday’s close). That’s including the hefty 7.03% they have added today, which left this uranium miner at 99 cents per share. By comparison, the All Ordinaries Index (ASX: XAO) is up by ‘just’ 1.43% over the past week.
But not only that, Paladin shares are now up an incredible 280% in 2021 so far. They are also up 800% over the past 5 years.
Paladin is an ASX uranium miner. It’s sole producing mine is the Langer Heinrich mine located in the African country of Namibia. This was mothballed in a “car and maintenance” condition a few years ago.
So why have Paladin shares rocketed by such an enriching amount in just the past week?
Well, we can perhaps trace these gains to an announcement the company made last month. In its first-quarter activities report released to investors on 25 October, the company announced it was continuing work on restarting production at Langer Heinrich, which is being brought back to life due to higher global uranium prices.
Paladin share price surges on mine reopening plans
Back on October 25, Paladin CEO Ian Purdy stated the following:
With a strong balance sheet, a robust and well defined Mine Restart Plan and strong project economics, Paladin is exceptionally well positioned to take advantage of a sustained recovery in global uranium pricing.
We continue to engage with global nuclear energy utilities to secure long-term contracts to underpin the restart of Langer Heinrich and ensure the project, when re-started, will deliver significant economic benefit to all of our shareholders.
Then, on 4 November, the company released another update on the Langer Heinrich mine. Paladin announced it had completed an updated mineral resource and ore reserve estimate.
This revealed Paladin is spending an estimated US$81 million on restarting production at Langer Heinrich. It also revealed the company is now estimating the mine holds a total of 84.8 megatonnes of ore reserves.
That’s enough to give the mine an estimated 17 years of production life. That’s based on a “life of mine production target” of 77.4 million pounds of triuranium octoxide. This new target is a meaningful increase on the previous estimate of 76.1 million pounds.
The company also confirmed “an estimated project execution timeframe of 18 months from project commencement to first production, with full production achieved after a further 15 months”.
So it appears investors have largely pushed up the Paladin Energy share price based on these updates for the Langer Heinrich mine.
At today’s closing share price of 99 cents, this company has a market capitalisation of $2.47 billion.
The post The Paladin (ASX:PDN) share price is up 19% in the last week. Here’s why appeared first on The Motley Fool Australia.
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.