Paladin Energy Ltd

Thank you for standing by and welcome to the Paladin Energy Limited September 2025 quarterly results call. All participants are in a listen only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr Paul Hembrough, CEO. Please go ahead.

Good morning, everyone, and thank you for joining Paladin Energy's September 2025 quarterly investor conference call. With me today are NSILO Chief Financial Officer, Alex Rybak, Chief Commercial Officer, and Paolo Raffo, our Head of Investor Relations. We had a solid start in the first quarter of the financial year at Loma Heinrich, with mining activities increasing significantly and the overall ramp-up progressing steadily in line with our plan. I'd like to note from Paolo achieved at Lange Heinrichs during this quarter. Record quarterly production of 1.07 million pounds of uranium, the highest since the mine restart. Total material mined was up 63% from the previous quarter at the mine. Average realised price increased to $67.40 per pound, while unit production costs were $41.60 per pound. Total recordable injury frequency rate of 3.2 per million hours worked on a 12-month moving average basis better than the company's safety target. There were no serious environmental or radiation incidents or breaches of the environmental compliance requirements during the period. Importantly for Paladin, in the future program we have made significant progress at the Patterson Lake South project with completion of a comprehensive review during the quarter, confirming robustness of the project and de-risking its development and operation. The strong economics support our unwavering commitment to bring the PLS project into production by early next decade, while continuing to de-risk the development through fees and conducting further exploration to identify future expansion opportunities. An important step moving forward with the development of PLS was the appointment of Dale Huffman as President of Paladin Canada. Dale will be joining the company on the 20th of October. Additionally, the team in Canada continues to progress permitting activities for CLS, including the final environmental impact statement. We have also been progressing consultation with Indigenous nations and local communities, while continuing engagement with provincial and federal regulators. As the newly appointed MDN CEO, I was personally pleased to see the strength of investor and market support for our fully underwritten $300 million equity rating completed in September. which provides the balance sheet flexibility to support both the PLS development and the LHM ramp-up to full mining and processing plant operations planned for FY2027. Looking ahead, our focus remains on completing the Laing 100 ramp-up by the end of FY2026 and advancing the development of the PLS project. I'll now open the call to questions.

Thank you. If you wish to ask a question, please press star one and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. The first question comes from Raoul Anand from Morgan Stanley. Please go ahead.

Hi, team. Thanks for the call and good morning. Look, just wanted to test a bit of the cost base, really good cost performance, at least as my numbers. Just wanted to test how we should think about the fixed cost variable splits going forward. Obviously, you step into the main part of the mine next year and wanted to understand what type of cost performance we can expect going forward. That's the first one, and I'll come back with a second. Thanks.

Yeah, thanks for the call. And we haven't guided on the split, but I think you can probably assume that the fixed variable splits probably 20% to 30% fixed with the remainder variable. If you look at one of the key costs being the reagents and they're a key contributor to that mix.

Got it. Okay. And then I guess any sort of clarity into what's going to change in terms of the fixed cost base going into next year, I would think that you probably get a bit more fixed component in your cost base as you kind of ramp up the mine more, as opposed to stockpiles. Is that the right way to think about it?

Or are you there or thereabouts in terms of your fixed... I think if you look at next year, you know, we'll be into more mining than we currently are. So I don't see really... And the majority of that mining cost is going to be a variable cost, right? So I think overall the balance is probably going to remain pretty much as it is.

Got it. Okay, now that's very helpful. And look for the second one. Obviously a new uranium sales contract and then also sales volumes a bit weaker than us in consensus. Obviously there's a bit of variability in terms of how you achieve those. Is there any further colour you can provide as to how the analyst community in general can kind of forecast the sales a bit better and then maybe a bit of an update on that new contract and how you're seeing the market. Thanks.

And on you, Alex. Yeah, thanks. So obviously, you know, we've talked about it at length. Our sales are quite lumpy, and they can be anywhere between £200,000 and £500,000 for any particular sale. In this particular quarter, we had a shipping delay, which meant that a customer delivery got pushed out from the September quarter into the current quarter, and that was the main reason for that lower sales number. However, we have, you would have seen we've built up quite a significant inventory balance of 1.8 million pounds and all of that is earmarked for customer deliveries and all of that about a million pounds is currently in transit on the water and in fact we've received cash for close to half of that one million pound that's in transit already. So uranium does have quite a long working capital cycle as we've previously discussed but what it means is that it's a timing issue and these sales will come through in this quarter. So that's sort of your first question. In terms of the additional sale agreement that we executed in the quarter, relatively small sale agreement, but with a very high-quality counterparty, which we've been targeting for quite some time. We're very pleased to have secured that. that offtake agreement, it doesn't materially move our pounds under contract from 24.1 to 24.5 million pounds under contract to 31st of December 2030 and within that amount obviously we maintain a market related price bias. But we also have quite a significant base escalated protection in our contract book which is I think not unexpected in quite a high volatile environment. But we are seeing very strong sort of fundamentals in the pricing at the moment. TradeTech and UxC have increased their term pricing. Spot pricing has increased. has strengthened which is which is great news for us because our book does remain tilted towards market related pricing and we do expect to realize the benefit of that got it that's very helpful thank you team i'll pass it on thank you your next question comes from alistair rankin from rbc capital markets please go ahead

Good morning, Paul, Anna, Alex and Paola. Thanks for the update and taking my questions. Just the first one, that total material moved of 5.27 million tonnes was really solid given you've still only got about 50% of the fleet commissioned at the moment. So you must be very pleased with the team on that. So is this strong performance giving you a bit of a buffer in terms of the GPIT stripping schedule for FY26? Or were you expecting to hit this level of material moved over this quarter?

We are really pleased with the results. We're seeing really good levels of availability and utilisation of the 100 tonne fleet and it was in line with our expectations for the quarter.

A very pleasing result. Okay, that's great. And just also on your primary non-low grade ore. I just noticed that you had about 430 kilotons mined over this quarter. So was all of that fed into the processing plant over this quarter or did some of it go into stockpile?

Yeah, we do a bit of a re-handle also on the stockpile and we blend to make sure we get the best throughput that we possibly can. So there is a bit of stockpile movement. So some drawdown of the MG3 and some of the fresh wine ore onto the stockpile.

Okay. So I guess in the next quarter for December, given you're still going to be doing quite a bit of G-pit stripping, do you have a plan to access, you know, a similar volume of primary ore in the next quarter so you can keep those feed grades around where they are?

Yeah, we haven't guided on a quarter-by-quarter basis, but the expectation that we set when we delivered the guidance was that the first half of this financial year would be in line with what we saw in the last quarter and I think that's what we've delivered in this quarter. So my expectation is that the result for the remainder of this half will be in line with what we've seen in quarter one.

Yep, understood. And then maybe just lastly, could I just get a reminder on the current sequencing for the You mentioned that you've done a little bit of work on the F-pit and I think in your guidance for FY26 you mentioned the J-pit as well. So could you just give us a quick refresher on what the plans are on the sequencing of the pits that you're going to mine?

Yeah, so most of our work is focused on G and F at the moment and we may move into the J as well. We've got quite a well-developed 12-week schedule and we're doing some re-optimisation on the basis of the new fleet we're getting. So we'll talk more about that as we get through the year. But fundamentally focused on GNS. OK, understood that.

That's clear. Thanks very much for that. Thank you.

Thank you. Your next question comes from Regan Burrows from Bell Potter Securities. Please go ahead.

Good morning. Good morning, guys. Congratulations on a good quarter in line with what you said. Just following on from Alice's questions before on total material moved, at full capacity in the second half, what sort of run rate will you be targeting there?

So we provided guidance for the full year at 4.4.4, and we absolutely stand behind that in Oregon. It actually depends on how quickly we're able to commission a new fleet. We've got to go through the receivable of that or the mobilisation of the fleet, recruitment, training, commissioning. So there's a few years but by and large we expect to stand behind the guidance for the £4.4 million rate for the full financial year.

Sorry, just on – as in if we sort of had a look at the material moves on a million tonnes per annum annualised basis, I mean, what's 100% operating capacity for that fleet that you're looking at? Yeah, we haven't done – we haven't gone on that reading. That's all right. Okay. And just in terms of, I guess, mill performance over the quarter, can you give us a bit more of a breakdown on – that blending strategy and, I guess, what was fed into the mill. We used sort of 50-50, I guess, through the stockpile and fresh ore. How did that sort of shape out?

Yeah, the blend strategy varies as we go. As I've mentioned before, we've typically got four types of seed that goes into the crusher, dry and wet coarse and dry and wet coarse. of fine clay material and we blend on the basis of what gives us the best throughput numbers. So as we progress through the MG3 stockpile and find different types of material then our blending strategy is adjusted accordingly. So we don't actually have a fixed blend strategy. It also depends on the material coming out of the pit and that of course depends on how it presents itself. So that wind strategy has varied quite significantly over the quarter and just interestingly it's produced the same 477 ppm this quarter as it did last quarter.

Great and if I could just squeeze one in there. You mentioned water availability over the quarter was managed well. Can you sort of elaborate on what you mean by that? Were there any issues I guess with water availability coming out of the desal plant or your sort of allocation?

Yeah, so in terms of our infrastructure on site, we've got our two bladders. We're pretty much operating two bladders at full capacity. The NAMWR system is able to supply at or above our contracted rate. There have been some challenges in the Orana VETSEL system, but by and large, we've been unaffected by that with utilisation of our onsite capacity, but we've also improved our our unit consumption rates on site as well. So we're progressively having fewer and fewer impacts, even considering the system variations from the Orono B cell and the NAMO system. So, you know, it's going exceptionally well on the water crimes.

Great, thanks for that. I'll leave it there. Congratulations. Thanks, Ricky.

Thank you. Your next question comes from Milan Tomic from J.P. Morgan. Please go ahead.

Hi, Pauline. Thanks for the call. Just a question on the sustaining capex. It was quite low compared to the previous quarter. Is this just a function of the movement in the stockpile door? And is the expectation for the next quarter expected to be broadly in line with this quarter? I'll come back with the next one.

Yeah, look, I think the main reason the number's just low this quarter is really just a function of the timing. So we're still standing behind the guidance of the kind of 26 to 32 for the full year. It's not to do with the low-grade stockpile or capitalized stripping. They weren't included in that guidance. We've also got some kind of chunky capital numbers in there around, you know, infill filling and exploration. So, you know, that capital is not going to be evenly allocated over the year.

Yep, understood. And just touching on the previous question regarding the water management strategy, can you just remind me how many days of water buffer do you have on site?

Yeah, it's about eight or nine days. water consumption per cubic metre of feed into the crusher. So it's about eight or nine days.

Yeah, and has that issue with NAM water been resolved or are you still relying on the capacity you have on site to provide water to the mill?

Yeah, we don't have any outstanding issues with NAM water.

Thank you very much. That's it.

Thank you. Your next question comes from Glenn Moorcock from Baron Joey. Please go ahead.

Morning, Paul. Paul, can I just clarify one of the questions or the answers to one of the earlier questions? Just when you look at the costs, obviously lower in the quarter, is it fair just to simply assume that you've got your guidance and as we move into the second half, you'll basically be starting to process what you mine as opposed to capitalising it and it's really just that that drives the cost higher or is there some opportunity maybe to do better than your guidance?

Yeah, Ian, I think you're right. I think, you know, we will be ramping up mining and so as you would imagine, the actual cost will increase because we are using that mining stockpile now. So, yeah, I think it's very important to assume that the costs are going to increase as the mining fleet comes on in this greater proportion of mine material.

Okay. And then, Paul, just... I know you've been mining a lot more waste than ore during the quarter, but just how's the pit shaping up? You know, I mean, obviously clay presence, et cetera. Is it sort of... Are you seeing what you're expected to see as you mine through the pits in these early days?

Yeah, the G-fit is absolutely in line with expectations. So, you know, we don't have a lot of clay material in that area. So it's actually shaping up very, very well. Probably slightly lower waste than anticipated but it's looking good. So I'm very excited about the next quarter and particularly the second half of the year.

Yeah and if I could just squeeze a third one in quickly. I mean everyone now globally is talking about support for critical minerals. I'm sort of unclear where uranium falls a little bit in that. Just what we're seeing, has it provided any more impetus for discussions with local governments here, WA, Queensland, to maybe overturn mining? Or are you not really in any active discussions at the moment? Thanks.

I think we've got plenty of people occupied at the moment, particularly, you know, finishing ramp up this year at Langaheim and pushing forward with PLS. You know, so we're not really in a space where we're actively engaged in pushing forward All right.

That's great. Thanks, Paul.

Thank you. Your next question comes from Dimari Singer from UBS. Please go ahead.

Thanks, guys. Just a couple of quick ones from me. Number one, on the plant and maybe recoveries, noted it's rendered well over the last three quarters. Wondering if there's anything to read into that as you ramp up. I presume it's all within range, but yeah, just any clarity on that?

Yes, thanks for the question. So typically our target range is 85 to 90 and we're within that range. In most plants like this, it's very, very dependent on your plant's stability and that's particularly with respect in this circumstance to feed grade. With the stockpile and blend strategy that we use to focus on shrimp we do get a bit of big grade variability, which does drive variability in the overall trucking rate. But as long as it performs within the 85 to 90 target range, we're pretty happy.

Yeah, okay, cool. And then the other one, like, so obviously a bit of focus on the fleet pickup. Just in terms of what you can put through the plant so you put um you know that was kind of unchanged quarter on quarter can you um i guess what's the bottleneck there to start letting the plant more even as you're continuing to process stockpiles can you can you um go into a bit more detail there please oh yeah i can go into a heap of detail on this one um

There's a couple of different bottlenecks and of course it depends on what type of feed you're putting into the plant. So if you put wet clay materials then the crush is going to be in the bottleneck. What we've found is if we put dry force material in then we can increase our plant's throughput and that doesn't become the bottleneck. Similarly at the CCD, if we have low density feed then we have low settling rate and that becomes the bottleneck in the plant. The leaching circuit is not a bottleneck. Classification is not a bottleneck. And the final recovery and packaging facility is not a bottleneck in the plan. So it really depends on the type of stage that we go through as to where the bottleneck is.

And I'm assuming, sorry, just kind of hard to hear a little bit, but as you get into the threshold, that bottleneck, Is that the way to dumb it down, Phil?

Yeah, again, it depends on the type of urolithic feeding for that plant. So if the feed's grey or the lithology is heavily clay and wet, then it's going to be more difficult to process. And that means we adopt a blend strategy that optimises our crusher throughput. So although it's fresh, Fresh ore largely will be very helpful for us.

Okay, cool. Thank you. Cheers and good luck on the result. Thank you. Thank you.

Thank you. Your next question comes from Josh Farr-Jones from Canaccord. Please go ahead.

Morning, Paul and team. Congrats on the result and thanks for the call. In the last two updates, you mentioned how the mine plan has been optimised to now deliver medium and high-grade ore to the processing plant, while stockpiling the lower-grade ore. I was just wondering if you could provide some context around this change and maybe add some colour on what this could mean for production during the initial mining phase.

So what we've been doing is we've done several optimisations of the mine, but every time we get a change in year price, for example, we can do some re-optimisation to see if we can increase the pit shell, as well as doing indoor drilling around of the existing pit gives us a few more opportunities. So we continue to run optimisation strategies to determine our fees for the pit. That will be an ongoing process over the life of mine.

Thanks for that. The inventory level obviously appears quite strong at 1.8 million pounds. I just wonder if there's an optimal level that you would target moving forward as a buffer against any potential challenges.

Yeah, I think, you know, the inventory level is not a deliberate strategy. It's really just a function of shipping availability and the working capital cycle. So, as Alex said in the earlier Q&A, all of that material that's produced is in month for sale. It's really about getting it from site to point of sale So that drives that balance. We don't have a deliberate strategy around inventory other than, you know, I'd like it to be as low as possible, but it's, you know, a function of the shipping schedule ultimately.

That's understood. Thanks, Dan. Thanks, guys.

Thank you. Your next question comes from Milan Tomek from JP Morgan. Please go ahead.

Oh, hi. Yes, thanks for the follow-up. Just wanted to ask more of a high-level question. How is the performance of the pit performing versus the restart plan? I guess, you know, do you still see the chances of getting to 6 million pounds? And, you know, maybe if anything else has changed relative to that study? Thanks.

Yeah, I think what you will see or what we are seeing is that... The performance is exactly what we thought it would be. So we guided on that 4.4 million pound full production rate for this financial year and GPIT is performing exactly how we thought it would. My expectation as we progress through the year is a slightly stronger second half than the first half and when we get to July we'll be in a position to provide you with At this point in time, I expect FY27 to be very strong.

Got it. Thank you.

Thank you. There are no further questions at this time. I'll now hand back to Mr Hembrough for closing remarks.

So in closing, we're really pleased with the results for the quarter and our performance is in line with our expectations. We appreciate the support from investors through the fundraiser. We're excited about the rest of the year and achieving the guidance that we've set. Thank you very much for joining us on the call today.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.