Paladin Energy (PDN) - Opportunistic raise to accelerate growth

Paladin Energy is a uranium miner with operations in Australia, Canada, and Namibia, which is where its flagship Langer Heinrich project Iocated. Paladin Energy Ltd was incorporated in 1993 and is headquartered in Perth, Australia.

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Paladin Energy has opportunistically used a strong share price to undertake a $320 million equity raising that should carry the Patterson Lake South project in Canada through engineering studies all the way to final investment decision (FID), and potentially to Canadian nuclear authority approval in FY27, with first production targeted for 2031. It should also provide working capital for Langer Heinrich’s ramp-up.

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The raising was prudent as available cash would not have met the new expenditure required for engineering at Patterson Lake South. Some $170 million of the new capital is intended for that project to complete front-end engineering and design work in FY26, and detailed designs in FY27 required for Canadian Nuclear Safety Commission approvals and is additional to the previously announced US$1.23 billion ($1.9 billion) in project pre-production capital expenditure. Meanwhile, $120 million will bolster Langer Heinreich’s working capital position, given its precarious cash flow as it runs down poor-quality stockpiles in its ramp-up, and $20 million will be allocated to exploration work.

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We trim our target price to $7.60 from $7.70 post the new issue and reduce our recommendation to Hold from Accumulate on valuation grounds.

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