PALADIN RESOURCES LTD THE NEW ENERGY IN THE MARKET

Transcription

1 PALADIN RESOURCES LTD THE NEW ENERGY IN THE MARKET John Borshoff Managing Director GENERAL MEETING 8th Sept 2005

2 Disclaimer This presentation does not constitute an offer to sell securities and is not a solicitation of an offer to buy securities. It is not to be distributed to third parties without the consent of Paladin Resources Ltd. (the Company ). It is intended that any offering of securities of the Company will be made in reliance upon the availability of exemptions from the applicable registration and prospectus requirements. No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. While information in this presentation derived from third parties is obtained from sources that the Company believes to be reliable, such information is not guaranteed as to its accuracy or completeness. No securities of the Company have been registered under the United States Security Act of 1933, as amended (the U.S. Securities Act ), and, subject to certain limited exceptions, no such securities may be offered or sold in the United States or to or for the account or benefit of a U.S. person (as defined in Regulation S under the U.S. Securities Act). Securities of the Company may be offered to a limited number of accredited investors (as defined in Rule 501(a) No securities of the Company have been registered under the United States Securities Act of 1933, as amended (the U.S. Securities Act ), and, subject to certain limited exceptions, no such securities may be offered or sold in the United States or to or for the account or benefit of Regulation D under the U.S. Securities Act) pursuant to the exemption from registration provided by Rule 506 of Regulation D under the U.S. Securities Act.

3 Uranium Exploitation Global History 60 years $30.20

4 Paladin Today A Top 200 ASX Stock ( market cap A$770M ) Development of Langer Heinrich Uranium Mine (Namibia) BFS underway on Kayelekera Uranium Project (Malawi) Most Comprehensive Uranium Team Outside Majors geological, engineering, environmental, marketing 200+ person years of uranium experience Successful Dual Listing in Canada

5 Recent Fund Raising History (in AUD) Aug 2003 $ 200,000 1 US Group Oct 2003 $ 333, Australian Investors Oct 2003 $ 2,000,000 * 5 options Société Générale Feb 2004 $ 1,025, Shaw Stockbroking Mar 2004 $ 500,000 8 US Resource Fund May 2004 $ 3,500, Canadian Fund Sept 2004 $ 3,000, Canadian Funds April 2005 $37,800,000 $1.05 Can/Aust Funds *Loan funds - $500,000 drawn down

6 Presentation Outline Paladin Status Key Projects Outlook and Production Expectation

7 Paladin Uranium Assets Basis for a Future Mining House Key uranium projects (142Mlbs U 3 O 8 ) Langer Heinrich (Namibia) Kayelekera (Malawi) Manyingee (Australia) Oobagooma (Australia) Frome (Australia) 12% interest Deep Yellow In-house uranium expertise Unique uranium databases Africa initial focus

8 Capital Structure 12 Month Trading Chart Ordinary Shares 405M fully paid 33.6M unlisted options (exc 22c - $1.50) 12 month trading range 31c -$1.95 Recent share price A$1.90 Cash in Hand A$35M Market Capitalisation A$770M (US$580M) - undiluted Best performing ASX stock for year to June 2005

9 Uranium Company Comparison Emerging producer hopefuls COMPANIES STATUS PROJECT LOCALITIES EXCHANGE MARKET CAP PALADIN (Emerging Producer ) 3 Advanced Feasibility Projects Australia / Africa ASX/TSX A$770M (C$700M) SUMMIT 1 Advanced Project (on hold) Australia ASX A$137M IUC Exploration play + Operating Mill US/Canada/ Mongolia TSX C$625M UEX Exploration play Canada TSX C$533M AFLEASE 1 Advanced Project (?) Sth Africa JSX C$390M WESTERN PROSPECTOR Advanced Exploration play Mongolia TSX C$132M PALADIN - STAND OUT AS A NEAR & MID TERM PRODUCER

10 12 Month Highlights Langer Heinrich Uranium Project (Namibia) BFS completed and resource upgraded A$37.8M raised April for smooth development transition bank finance approved (US$71M) Mining Licence Granted August 05 Kayelekera (Malawi) Pre Feas Study updated - POSITIVE BFS commenced Uranium price strengthening - US$30.50/lb U 3 O 8 term sale contracts US$32/lb + strong upside positive environment for project development

11 WORLD URANIUM MINING STATUS

12 World Uranium Mine Production Scheduled vs Required ( ) (Source ZB Marketing, Denver, USA) (Source ZB Marketing, Denver, USA)

13 Uranium Producers State of the Global Industry Supplier base severely rationalised over 20 year period low uranium prices / no production incentives maintain viability via consolidation Majority of production reduced to 5 major suppliers struggling to meet emerging demand key suppliers now grappling how to maintain / increase market share in growing market General mine supply industry no new major resource companies entering market revived effort mainly from junior exploration companies focus on existing deposits Paladin is the only non producer in the world that will be able to bring on new uranium mines in the next 3 to 5 years

14 World Supply & Demand Scenario 2020 Demand 215Mlb

15 Production Scenario for 2020 for existing uranium mines vs requirement Production Centre Country 2003 Production (million lbs U 3 O 8 ) 2020 Production Mine Status KEY LAKE/MCARTHUR RIVER Canada 15.2 Nil MINED OUT RANGER Australia 11.4 Nil MINED OUT PRIARGUNSKY Russia MAINTAINED OLYMPIC DAM Australia UPGRADED MCCLEAN LAKE Canada 6.0 Nil MINED OUT RABBIT LAKE Canada 5.9 Nil MINED OUT ROSSING Namibia 5.3 Nil MINED OUT AKOUTA Niger 5.2 Nil MINED OUT ARLIT Niger 2.8 Nil MINED OUT ZHOLTYE VODY Ukraine 2.6 Unknown TOTAL TOTAL MINE PRODUCTION REQUIREMENT 92Mlb 165Mlb (reference case)

16 LANGER HEINRICH URANIUM PROJECT

17 Langer Heinrich Project Location Map

18 Langer Heinrich Geological Cross Sections New channel discovery

19 Langer Heinrich Resource Drilling New Channel Area

20 Langer Heinrich Project BFS - results strong Large low to moderate grade resource with significant upside 25 year mine life mine model maximizes in-ground value 1.5Mt ore throughput / 1,180tpa U 3 O 8 production - alkaline leach / process recovery 90% Study shows strong project performance Flexibility to optimise operation maintain production between 1,100tpa 1200tpa, OR expand production after first year for dramatic increase in NPV

21 Langer Heinrich Flow Sheet Va Under Development

22 Langer Heinrich Project Key Performance Parameters (incl 50% of Inferred) Base Case Optimized Production U 3 O Mlb 3.0Mlb Annual revenue US$76.8M US$88M Operating costs US$31.3M US$30M Royalty 5% US$ 3.8M US$4.7M Cash operating surplus US$41.7M US$53.3M NPV8% (after tax/royalty) US$167M US$213M IRR 27% 31% OPEX/lb US$12.00 Optimized mine CAPEX US$92M model performance Project life 25 years Recovery 90% to 92% yr2 Prod incr 5% yr2 & 5% yr3 Opex decr 5% yr2 & 5% yr3

23 KAYELEKERA URANIUM PROJECT

24 Kayelekera Project One of the best undeveloped uranium projects in Africa 10,850t at 0.12% eu Final feasibility completed 1991 (giant UK power utility - $9m spent) BFS underway by Paladin 100% Paladin ownership

25 Total 0.15% eu 3 0 8

26 Kayelekera Project diamond drilling July 05 metallurgical samples

27 Kayelekera Uranium Project Operational Parameters of Updated PFS Parameter Value Annual throughput 800,000t Average Grade 0.12% U 3 O 8 Process Recovery 90% Process route Acid leach / SX Annual production 2.3Mlb U 3 O 8 Mine life 10 years

28 Kayelekera Bankable Feasibility Study Work Execution Schedule

29 DATABASE UTILISATION

30 Uranium Database Invaluable resource unique and proprietary Uranerz ( ) Australia and Africa 50+ geologists total expenditure US$40 million Australia alone Paladin acquired database 1991 Proprietary data exploration reports project generation studies extensive uranium occurrence files Reference material over 50,000 reports, files, maps fully indexed (exploration, mining, marketing and environmental)

31 FUTURE OUTLOOK & PRODUCTION EXPECTATION

32 Project Pipeline Asset base depth shareholders dream! MANYINGEE OOBAGOOMA DATABASE UTILISATION Inventory U 3 O 8 : 142Mlb Plus upside

33 Project Development Schedule The building blocks BFS ~ US$3.2M CONSTRUCTION US$92M PRODUCTION 2.6M lb pa (1,180 TPA) - 15 YEAR PLUS PRE-FEASIBILITY UPDATE BFS ~ US$2.3M CONSTRUCTION US$65M PRODUCTION 1,000 TPA(2.2Mlb) for 10 YEARS GLOBAL EXPLORATION TO IDENTIFY NEW PROJECT OPPORTUNITIES PRE-FEASIBILITY COMPLETED (PROJECT ON HOLD) DEVELOPMENT OPPORTUNITY 2012 & BEYOND

34 Project Development Schedule Vs Uranium Outlook PERFECT! BFS ~ US$3.2M CONSTRUCTION US$92M PRODUCTION 2.6M lb pa (1,180 TPA) - 15 YEAR PLUS PRE-FEASIBILITY UPDATE BFS ~ US$2.3M CONSTRUCTION US$65M PRODUCTION 1,000 TPA(2.2Mlb) for 10 YEARS GLOBAL EXPLORATION TO IDENTIFY NEW PROJECT OPPORTUNITIES PRE-FEASIBILITY COMPLETED (PROJECT ON HOLD) DEVELOPMENT OPPORTUNITY 2012 & BEYOND

35 Future Programme Langer Heinrich complete 10,000m resource drilling Sept/Oct 2005 finalise construction contracts early Sept 05 commence construction mid Sept 05 finalise funding Oct 05 production start up Sept/Oct 06 Kayelekera complete 5,000m resource drilling Oct 05 complete BFS Aug/Sept 06 negotiate State Agreement by Aug 06 Other continue project generation on going

36 Production Schedule Plenty of Upside Project Production Start Production Vol. (U 3 O 8 ) million pounds LANGER HEINRICH (stage 1) September KAYELEKERA April LANGER HEINRICH (stage 2) July Mlb

37 Paladin can be Trusted to Deliver 1998 to 2002 we said: secure uranium projects during downturn complete the Kayelekera and Langer Heinrich PFS 2004 we said: start Langer Heinrich BFS grow and strengthen management update Kayelekera PFS 2005 we said: dual list Canada commence Kayelekera BFS complete Langer Heinrich BFS grant of Langer Heinrich mining lease smooth transition to development restructure / strengthen Board

38 What We Say Now: Only serious emerging uranium producer globally Langer Heinrich to commence production early 4 th quarter 2006 Kayelekera BFS - complete end 2006 Activate new project acquisition using unique database Consolidate brown field exploration Namibia and Kayelekera

39 Conclusion become a significant global U producer Focused uranium energy company large resource base in 4 deposits-142mlb excellent resource upside potential strength through geographic diversification Quality project in Langer Heinrich development schedule in tune with market upturn Second development project - Kayelekera Opportunities for added wealth with database Qualify for entry into the S&P/ASX 100 group of companies!

40 Forward Looking Statements This presentation contains forward-looking statements that are not based on historical fact, including those identified by the use of forward-looking terminology such as statements containing the words believes, may, will, estimates, continue, anticipates, intends, expects, should, or the negatives thereof and words of similar import. Management of the Company cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied by the statements. Management believes that the estimates are reasonable, but should not unduly be relied upon. The company makes no representation, warranty (express or implied), or assurance as to the completeness or accuracy of these projections and, accordingly, expresses no opinion or any other form of assurance regarding them. Management does not intend to publish updates or revisions of any forward-looking statements included in this document to reflect the Company s circumstances after the date hereof or to reflect subsequent market analysis.

41 PALADIN RESOURCES LTD EMERGING URANIUM PRODUCER September 2005 END