Paladin Energy Ltd

Thank you for standing by and welcome to the Paladin Energy Limited March 2026 quarterly results call. 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 1 on your telephone keypad. I would now like to hand the conference over to Paul Hemborough, MD and CEO. Please go ahead. Good morning everyone and thank you for joining the Paladin Energy's quarterly conference call. With me today is Anna Soto, our Chief Financial Officer, Scott Barber, our Chief Operating Officer, Alex Rybak, our Chief Commercial Officer, and Paolo Raffo, Head of Investor Relations. On the call today, we'll cover a brief overview of the quarter, an update on Langer Heinrich, our FY26 guidance revision, and progress in Canada at Paterson Lake South, and then we'll move into Q&A after that. So a couple of highlights from the quarter. Production at Langer Heinrich. 100mine was 1.79 million pounds for the quarter, up 5% on the prior quarter, supported by strong plant performance. Sales volume was 1.03 million pounds at an average real life price of 68p per pound. We increased the length of 100mine 2026 production guidance to 4.5 to 4.8 million pounds and in Canada we received Saskatchewan government approvals of the TLS EIS and we've also Continued exploration is really focused on the salooning deposit. More specifically at Logan Hydro Mines, mining continues to ramp up with the list freeze and commissioning of the remaining mining fleet completed and activity was heavily focused on the G5. How to mine approval was 6.17 million tonnes, up 12% from the previous quarter, and cross the throughput was 1.21 million tonnes at an average 4 feet grade of 503 ccm. which produced 1.29 million pounds of ECOA at an average recovery rate of 96%. Ramp-up remains on track for completion by the end of FY26. We're monitoring potential impacts from the events in the Middle East. Currently, inbound supplies to sites and outbound shipments to customers are not impacted, and we're taking steps to maintain security of our key process inputs. On sales and cash, which sold 1.03 million pounds a year per hour at an average realized price of 68 billion per pound. Cost of production was $40 billion per pound, benefiting from the utilization of the remaining MDT stockpile. At C1NARCH, we held unrestricted cash investments of 219.5 million U.S., with an undrawn 70 million U.S. revolving credit facilities. Quarterly sales revenue includes 47.3 million U.S. with cash receipts accepted during the June 2026 quarter. And we made a scheduled $4 million payment on the term loan facility, reducing the balance to $36 million. On guidance, following year-to-date production of 3.6 million pounds, we revised Langaheim Rex 2026 production guidance to 4.5 to 4.8 million pounds from the 4 to 4.4 previously announced. Sales guidance remains 3.8 to 4.2 million pounds and cost of production guidance remains US $44 to $48 per pound, while capital and exploration expenditure guidance was revised to US $15 to $17 million from the US $26 to $32 million. The revised guidance is based on current operating conditions and assumptions and may be impacted by disruptions arising from the current geopolitical events, which we're closely monitoring. Turning to Canada and the CLS project, we received ministerial approval for our environmental impact statement on the 20th of February. It's a really important regulatory milestone and a prerequisite for further payments and licensing leading to the construction and operating of the permit. On 31 March, we were advised that the main nation, Saskatchewan, had applied for a judicial review to challenge the decision to approve the EIS and would continue to actively engage in constructive conversations with local communities and Indigenous peoples. We commenced an update of the primary engineering design study during the quarter and continue to work closely with the Canadian Nuclear Safety Commission as we progress towards the life of the construct. On explorations, we drilled just over 11,000 metres across the PLS project during the last quarter. We're targeting saloon incident deposits and resource conversion extensive drilling at RRR. Our study results are still pending. Finally, at the Michelin project, There were no substantive mining exploration activities during the quarter, with prospective and target assessments continuing, and which meant that the regulatory process reduced project tenure by approximately 18% as part of the tenement rationalisation program. So we've been really busy delivering towns and building momentum across the company, and I'm pleased with the progress that we're making. I'm now happy to take questions.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then 2. If you're on a speakerphone, please pick up the handset to ask your question. The first question today comes from Alistair Rankin from RBC Capital Markets. Please go ahead.

Good morning, Paul and Scott, Alex and Paula, and congrats on another strong result. You seem to be making it a habit of recording results so well done. This first question is relating to your reagents.

Can you just run through what your key reagents are for production and, if possible, just comment on how those contribute to the cost structure in dollars per pound?

Thanks, Steve. What I want to do is just to give you a very brief overview. So, we're an alkaline bleach process, so we don't use a lot of sulfuric acids. There are two reagents. They're typically things like sodium bicarbonate, sodium carbonate, sodium hydroxide, hydrogen peroxide, a little bit of sulfuric acid, a lot of flocculants throughout CCDs, also acetone diesel, of course. In terms of their contribution for production, we're not really going into that level of detail. But what I can say right now is, at the moment, we do have between 3 and 10-month supply of all of our really important factor at this time given global events. That's really helpful. Thank you. And just to follow up on the Macy Nation Challenge at TLS, could you just run through how that challenge actually works, what happens now and what you're planning for? Yeah, what you might find is that is that this is not an infrequent appearance. There have been other mining companies and projects that have had the same sort of challenge. This is really a challenge from the Saskatchewan Government's authority to provide the approval for the project. There haven't been any successful challenges to date. More importantly, we need to maintain a long-term working relationship with the main management. And to date, the conversations have been really constructive and we'll continue to work closely with them. What we're doing right now is we're really focused on the fee work and working with CNSC to get that license to construct. And at this point in time, there's nothing stopping us from continuing down that pathway towards receiving the license to construct. Okay, that's great. I'll come back in the queue. Thanks. Thank you. The next question comes from James Bullen from CGS.

Please go ahead.

Oh, thanks. And congrats, Paladin team. Just a quick one around Arana's diesel plant. It's been a bit of talk about sulfur blooms and potential downtime up there, plus also I think they have to do a maintenance shut normally in May. Can you provide for an update around water supply?

Scott here. The decal plant is in full operation. We haven't had any major disruptions to the water here to date. There was a little bit of sulfur in the quarter, but nothing that really stopped us. Our bladders and TSS in that pond are all full. There was actually a little bit of rain through the quarter, and that actually topped up all of our water supplies. So for us, water is not our major issue. There is a decal shutdown planned late in June, and we're just monitoring that, but we've got enough water to get through that.

Great. Thanks very much. And just heading across to PLS and the mutual benefit agreements, I think you've got two assassination agreements done. When NextGen went through this process, it took them well over 12 months longer than the others to get an agreement with Metis. Is this a risk to your FID timing at all? getting an MDA with the MNF?

Thanks, James. It's not absolutely compulsory to have an equal benefit agreement, but of course it's what we want to do. We would like all of the stakeholders and the regions to benefit from our presence there. So it takes a bit longer, it takes a bit longer. The most important thing is the engagement and consultation process. So we'll continue to engage and consult with all of the First Nations groups. And as we've pointed out, we do have two MBAs in place with Steel River Denomination and Buffalo River. So we'll continue to work on those. The other two are closed. You know, we're in negotiations right now. And we'll just keep working towards that. But it's not a prerequisite for receiving an alternative to construction.

Right. Thank you very much, Paul and Scott.

Thank you. The next question comes from Daniel Roden from Jefferies. Please go ahead.

Hi, guys. Thanks for taking my question, and congratulations on the sub-reporter. Just wanted to, I guess, get a view on, I guess, Q4 run rates. You know, it's a little... I guess the run rate's a little lower than your Q3 in the wide updated guidance, and so just a little bit of colour around I guess what's going on and what's driving, I guess, the lower Q4 and then how should we set that kind of, you know, as the run rate entering FY27?

Thanks, Dan. As I often say, you know, it's an outdoor sport and all sorts of things can happen. So we've reset the guide to that range of 4.5 to 4.8. I think it's realistic and achievable. Our current rate is... I think we're very satisfied with how we've gone. We've also moved the batch into the G-fit, and we're now moving into the next fit. So there's that sort of transition process where you can typically get slightly lower grades as we move into the main ore body. We can get different ore handling characteristics. So there's a few things that could happen. And in the meantime, we're trying to mitigate those risks with a number of different controls. We have blending strategies for handleability, blending strategies for grades, and we plan on maintaining the positive performance that we've seen in our overall recovery rate. So, you know, so there's still a couple of months to go for this quarter, but we're very happy with progress to date. But there are a few things that could happen.

Yeah, excellent. And I guess just on that, like when you're looking at Q4 and FY27, you know, your recovery in... Q3 has been, I think, well above expectations, even at a bit of a lower grade. So I guess just what's your assumption that you're using for your guidance on the recovery? And I guess is there a bit of upside potential there?

Now, we set our target around 85 to 90. That's typically the level at which this plant can operate. And I think the team at Mega Mining has done an exceptional job at... But I certainly don't expect that we'll stay in that range. I think as long as we hit the target range of 85 to 90, I'll be pretty happy. In terms of FY27, I think we still plan to provide guidance in July. However, I've sort of caved out that now with a level of uncertainty around what's happening in the Middle East. So I don't really want to provide too much of a look forward.

Yep, awesome. And if I could split one last one in. You've provided a sensitivity on, I guess, real-life pricing at various levels of spot pricing historically. I guess when we're looking forward to FY27, FY28, etc., Is that sensitivity analysis that you've provided, is that still a fair indication of the sensitivity you would expect on, I guess, real-life pricing at different spot pricing? Or, I guess, if you're changing your contract book as that contract book matures, would you expect that sensitivity to change?

Yeah. Thanks, Alex, here. I think generally speaking we're very pleased with the way our book has performed this quarter and year to date. It's running pretty much very well with that matrix that we provided, realising just under $70 a pound four years a day at an average uranium price of $80. Yeah, the next year, again, you know, without sort of getting into the look forwards, you know, we'll be, you know, we'll be provided, you know, in due course, but obviously we've got £26 million under contract, so you don't, and that book has remained stable, so you don't expect there to be a massive shift in that, but as our openings open up, we do have our you know, more uncontracted and more market-related exposure. So we've set to realise that outside there.

Yep, yep, no, perfect. Thank you very much, guys. I'll pass on. Thanks.

Thank you. The next question comes from Dima Aryasingh from GBS.

Please go ahead. Thanks, Paul. Thanks, Tim. Just a question on the revision to... on why that's been done in the context of, I guess, what's going on more broadly, please.

Sorry, was that in relation to the update to the guidance?

Yeah, yeah, exactly, yeah, for the CAPEX.

Yeah, because I think, you know, we obviously put the guidance together 12 months ago, and has progressed. There's been, you know, re-prioritisation of those items, the deferral, and then also the bringing forward of some other items. So, it's really just this shifting of capex. Some of that capex will be deferred into FY2027. Okay, cool.

So, I think, yeah, and then I guess there was a question on reagent use, and I understand you guys are alkaline rich, but Do you guys have any more comments on research more broadly, so on your competitors domestically? You use a lot of software and then, you know, the big one. Is there sort of like that, yeah, easier in anything, either from your customers or the industry more broadly on software shortages? No, we don't really come in from other people's, just have a video and then go in, you know, You know, that's our area of focus right now, is making sure that we have continuity in supply, so we're reasonably confident, at least for the next three months. Yeah, sure, cool. And then, just one, how's everything going on the diesel front? Is that similar? Or, yeah, what does that look like? You know, about... At least 80% of our B1A setback comes from West Africa. And so it's a very, very good problem. Thank you. I'll move on to the next question. It comes from Glenn Walcock from Baron Joey. Please go ahead. Morning, Paul. I just wanted to talk a bit more about the guidance change. Obviously, you lifted production guidance by 11%, but you didn't change your cost guidance at all. And if you just do the mathematics, I mean, 1.2 million pounds production in the final quarter. To get to the bottom end of your cost range means costs go up to $54 a pound in the final quarter when they've averaged 40 to date. So you just didn't change your cost guidance or is there something that's really going to change in the final quarter to get there? Thanks.

So there's a couple of things. One, I think, as Paul mentioned, we will be mining for the final quarter. So there'll be no reliance on the medium-grade stockpile. So we were obviously getting a benefit from that in the prior quarters. We are starting to see some cost escalation as a result of the conflict in the Middle East. I think there's some uncertainty around what that will look like. So I think there's a view that we would rather be conservative on what that may be for the final quarter as well. So I think we've done the analysis on the range and we're comfortable with the range we've provided at this point.

Okay, that's a big number. Maybe just staying on that same tax then. If you look at the spend in the quarter then just gone, Langer Heineck cost $52 million, the stockpile bill $11 million, so $63 million plus another $7 million for stripping. If you ignore the stripping, is that meaning that $63 million steps up a fair bit from a cash perspective in the final quarter when you say you'll be full mining for the fleets?

I think the low-grade stock value in the stripping, I think we're saying, you know, varies quarter to quarter. So I probably won't comment on what the forecast outlook for those is. But as far as the production costs, yeah, we do expect them to be higher in the next quarter.

In a dollar a million perspective, higher than the 52. Yep. And then if I could just ask this on the sales as well. I mean, you know, you've kept your sales guidance the same. you know, if you sell what's left to sell to hit the top end of your range, selling at the price you're probably going to receive is still probably not going to cover all your cash outflow in the quarter. Is there, like, can you sell more or are you choosing not to? I'm just trying to understand why, with the increased volume, you're choosing not to cover your cash, it appears, with sales, or is it because you're waiting for higher prices or what? I'm just trying to... Thanks. Yeah, Glenn, I'll take this one. So our sales, as I said last quarter, we are trending towards the top end of the guidance range for our sales, all things being equal, shipping delays, et cetera. But we're pretty comfortable with that range, so we've left it unchanged. Obviously, there is a delay between production and sales, so even if you're producing more, you're not necessarily able to realise those sales in the same series. But we are seeing, you know, performance of this sort towards the top end of that range. All right. Thank you. Thank you. The next question comes from Franco Strosik from JP Morgan. Please go ahead. Yeah, morning, guys. Thanks for your time. Just a quick question on fish product inventory. Can we expect a bit of an unwind strategy to progress into FY27? Obviously, the current number seems a little bit elevated, probably unwind a bit in the fourth quarter, but just interested in your views over the next six to 12 months, I suppose. Yeah. I believe it is a slightly elevated level. You know, our inventory is fluctuating from quarter to quarter. Probably on a normalised average basis, we expect about four months of production to be our normal average inventory level. This quarter, that inventory level was impacted by shipping delays, so we had quite a large number of pounds on the water at the 30th of March, so that was the primary result. But yeah, about four months of production on an average basis. I think that makes sense. And the final question from me was just, I guess, critical path, keeping the mine fully ramped up over the next three to six months. I guess what's the focus internally and what's something we can be watching for come June, July?

Yeah, in terms of the mine, getting into Jesus and developing that, we're about a bench and a half in currently and already touching more, so that's going to start making its way to the rocks. developing that kit, which is a little bit further away from the ROM than GPIT. So we're just optimizing the haulage, getting the equipment operating exactly as we want it to. All of the equipment is in-hand operating, and the contractor's done a really great job in getting all the people and everything up and running. But as we finish GPIT, move into GPIT, getting the blend right, and just really optimizing that through the mill as we see that new ore. So really, for the moment, the equipment is on state. It's just getting it on the run and seeing how it performs through the mill.

All right. Appreciate that. Thank you. Thank you. The next question comes from Matthew Hope from Ord Minute. Please go ahead.

Yeah, thanks very much. I was wondering if you could give us a rough guide as to how much diesel makes up the cost of production.

Yeah, I mean, I think basically what we can say is, you know, the mining contractor obviously has a portion of their costs related to diesel. There's a small amount of diesel use in the plant. Other than that, I'd say it's generally sub, you know, 10%, 15% of the total cost of production.

Okay, so you don't expect a big impact from, you know, obviously the current global sort of diesel issues. You don't expect a huge impact on your costs? Well, I think ultimately... You provide really no guidance on what is happening due to this conflict.

Yeah, so obviously we're monitoring that, so the ultimate impact is going to be dependent on what the price outcome is, right? So... I think, you know, it's obviously not a significant cost. But, you know, it's pretty steady. There is a material increase. We'll have some impact.

Sure. Okay. Thanks very much. Thank you. The next question comes from Sarah S. from Benton Financial. Please go ahead.

Hi, Dean. Thanks for taking my call and congrats on another quarter. I'll start with a question on PLS. What gives you optimism about a successful resolution of the regulation with M&S?

Thanks for the question. I'll start with all of the chiefs and councils of the four parties that we're required to. and we have a really good relationship with them. And I think it's really just a matter of time to continue this consultation. I think that it'd be unsurprising to say that everybody in the communities and that region, I think we've had some benefit of our presence there, and that's not an unreasonable expectation. And, of course, the challenge is How do we find a resolution to this in a way that's economically sensible for us as well? And so we continue to consult with them and work through the process. And we've seen other mining companies, other projects in very close proximity to us, work through that process and have successful outcomes. And what we've also seen is the timing of delivery of the MBAs is completely independent of the EIS approval process and the CNSP process. So we'll just keep going as long as it takes. In the meantime, the most important thing for us right now is to consult effectively with them, but also to progress the project through the engineering works and satisfy the requirements of the CNSP. The project economics are incredibly strong. It's a great project and we have a lot of confidence in the team's ability to work through big issues as they come up.

Thank you. I'll just follow up on another question that was previously asked about Grand Gates. If we were to extrapolate from, let's say, production in the month of June, when hopefully the ramp-up is done, would that lead to, you know, on an annual basis, £6 million of production? Or what would it lead to?

So, we're not going to provide guidance into next year until we get through this year. I think there's a There's a level of uncertainty out there now with respect to what's happening in the Middle East, of course, and I think it's a difficult time for anybody to predict how that's going to unravel. What we can say, though, is we have reset our guidance range for the remainder of this year. I think that number is challenging but achievable. And what we'll do now for the remainder of the year is to continue to go through our budgeting process assess the performance of our stock optimisation work, and then at an appropriate point in time, we'll provide guides to give you an update on the basis of a more well-informed view of 27. Okay.

Thank you. My question was, I think, motivated by a peak production rate outlined in a like-of-man production plan, as we talked earlier. But I look forward to the actual guidance.

Yeah, thanks. I think, you know, the peak production really depends on a number of factors, and primarily it's your throughput rate through the mill, overall recovery rate and grade. And under different price scenarios, we might choose to do something quite different. So in a different use price scenario, we might do something different to what we would do, in a high to equal price scenario. So the plan ultimately depends on how things play out over the coming months in combination with how our performance is over that same period. So it is a bit difficult to give you a more certain answer.

Thank you. My final question would be maybe a possible comment from you on something that came up on Bloomberg. a few days ago about the U.S. ambassador to Namibia saying that they were expecting to increase imports of uranium from Namibia to the U.S.A. I was wondering if they had any discussions of that nature with parties in the U.S.A. Yeah.

Yeah, look, there has been a lot of interest in Namibian supply. from across the globe. We were just at the World Nuclear Fuel Cycle Conference last week. You know, there's a lot of interest from the U.S. utilities. I think generally the moon is getting, you know, the U.S. utilities are certainly getting more urgent in their request for supply, and I think they are being prompted by the U.S. governments to secure supplies and secure inventory. We've obviously had direct interactions with the representatives from U.S. entities as well. But having said that, I guess there isn't anything concrete at this point in time. Also very strong demand from other regions, specifically from China. The Chinese utilities continue to be very aggressive in their fuel processing, driven by the reactor build-out program, chasing supply across the region, as evidenced by the Itango deal that CNC is in the process of completing. So we're in a very fortunate position in the media with that origin being highly sought after, both by the Chinese, by the US, as well as the European counterparties that have lost some supply from new chickens yet. And we'll aim to maximise the value of our Nigerian production for the benefit of our shareholders.

Thanks for that, Danny Brown. Thank you.

At this time, we're showing no further questions. I'll hand the conference back to Paul for any closing remarks. Thank you very much. The progress across the port pilot activities has been really positive. We continue to build advancement in both production and project progress at PLS. However, we maintain a close watch on the Middle East for any potential impact on our business over the coming months. Thank you for your questions and thank you to your ongoing intelligence and have a good day.