OTCQX:PALAF - Post by User
Post by
PUNJABIon Oct 03, 2013 10:41am
424 Views
Post# 21787618
Post says cutting costs may not be enough for Paladin
Post says cutting costs may not be enough for Paladin Post says cutting costs may not be enough for Paladin
Ticker Symbol: C:PDN
Post says cutting costs may not be enough for Paladin
Paladin Energy Ltd (C:PDN)
Shares Issued 962,765,979
Last Close 10/2/2013 $0.52
Thursday October 03 2013 - In the News
The Financial Post reports in its Thursday edition uranium miner Paladin Energy (52 cents) announced aggressive cost-saving measures at its two mines and head office on Wednesday. The Post's Peter Koven, writing in Trading Desk, says shareholders will be pleased to see management and board members taking pay cuts and refusing any bonuses or salary increases until the moribund uranium market improves. RBC analyst Chris Drew said the initiatives are welcome, but concerns remain over financing. "Balance sheet concerns remain the overriding issue for the stock given current weak uranium prices," Mr. Drew said in a note. "An asset sale or debt restructure would be positive, but an asset sale in particular is likely to be challenging given market conditions." The cost reductions are necessary. For the quarter that ended June 30, Paladin had cash costs of $29.40 a pound at its Langer Heinrich mine and $39.20 a pound at its Kayelekera mine (all figures U.S.). Given the uranium spot price is at $35, and Paladin is carrying more than $600-million of debt, those cost figures needs to improve. Mr. Drew remains neutral on the stock, with a price target of 77 Canadian cents a share -- a 30-per-cent discount to his net asset value.