The Directors present their report on the Group consisting of Paladin Energy Ltd and the entities it controlled at the end of, or during, the year ended 30 June 2010.
The following persons were Directors of Paladin Energy Ltd (Company) and were in office for this entire period unless otherwise indicated:
- Mr Rick Crabb (Non-executive Chairman)
- Mr John Borshoff (Managing Director/CEO)
- Mr Sean Llewelyn (Non-executive Director)
- Mr Ian Noble (Non-executive Director)
- Mr Donald Shumka (Non-executive Director)
- Mr Peter Donkin (Non-executive Director) appointed 1 July 2010
The principal activity of the Group was the development and operation of uranium mines in Africa and Australia together with ongoing exploration and evaluation activities.
REVIEW AND RESULTS OF OPERATIONS
A detailed operational and financial review of the Group is set out under the section entitled
Management Discussion and Analysis.
The Groups’ loss after tax for the year is US$52.9M (2009:US$480.2M) representing an decrease of 890% from the previous year.
No dividend has been paid during the financial year and no dividend is recommended for the current year.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Group during the financial year not otherwise dealt with in this report.
SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE
Since the end of the year, the Directors are not aware of any other matter or circumstance not otherwise dealt with in this report, that has significantly or may significantly affect the operations of the Consolidated Entity, the results of those operations or the state of affairs of the Consolidated Entity in subsequent years with the exception of the following, the financial effects of which have not been provided for in the 30 June 2010 Financial Report:
Mr Ian Noble will not seek re-election and will resign at the next Annual General Meeting to be held on 25 November 2010.
On 1 July 2010, the Company announced the appointment of Mr Peter Donkin with effect from 1 July 2010 and Mr Philip Baily with effect from 1 October 2010 as non-executive directors of Paladin Energy Ltd.
Mr Donkin has 28 years’ experience in finance, of which the last 18 years have involved arranging finance in the mining sector. Mr Baily is a metallurgist with more than 40 years’ experience in the mining industry, including some 10 years in the uranium sector.
A$27M recommended takeover offer for NGM Resources Limited
On 21 July 2010, the Company announced a takeover offer for the shares it does not already own in ASX listed minerals exploration company NGM. Paladin currently holds approximately 22.5% of NGM’s ordinary shares on issue, having recently acquired 4.3M NGM shares at $0.09 per share.
The consideration under the Offer will comprise one fully paid ordinary Paladin share for every 23.9 fully paid ordinary NGM shares that Paladin does not already own, implying a price of A$0.15 per NGM share based on the closing price of Paladin shares on the ASX on 20 July 2010 (being the last trading day prior to announcement of the Offer) of A$3.58.
The Offer values NGM at approximately A$27M. The Offer is subject to a number of conditions.
NGM’s directors have unanimously recommended that NGM shareholders accept the Offer, in the absence of a superior offer. They have also indicated that they intend to accept the Offer in respect of their own shareholdings, in the absence of a superior offer. NGM holds three uranium exploration concessions, covering an area of approximately 1,500km2 in Niger. Niger is the 6th major uranium producing country in the world and the acquisition of NGM would provide Paladin with a footprint in this major uranium province.
Issue of Shares
On 2 August 2010, the Company announced the issue of 750,000 fully paid ordinary shares following the vesting of Share Rights pursuant to the Employee Performance Share Rights Plan. The shares are to be held in trust, vesting variously over time up to 1 January 2012 subject to conditions. Once vested, all shares remain in trust and subject to restrictions on dealing that will cease by 1 January 2014.
On 1 September 2010, the Company announced the issue of 530,580 fully paid ordinary shares following the vesting of Share Rights pursuant to the Employee Performance and Contractor Performance Share Rights Plans.
Paladin Signs Strategic MOU with CGNPC Uranium Resources Co., Ltd
On 5 August 2010, the Company announced that it had signed a wide ranging Memorandum of Understanding (MOU) with CGNPC Uranium Resources Co., Ltd (“CGNPC-URC”), setting a framework of co-operation for long-term sales of uranium, potential participation in Paladin’s growth strategies and possible expansion of joint venture relationships in the Northern Territory with Energy Metals Limited (EME), in which CGNPC-URC, through the subsidiary China Uranium Development Company Limited, holds a 69.34% interest.
Likely developments in the operations of the Group constituted by the Company and the entities it controls from time to time are set out under the section entitled Management, Discussion and Analysis.
The Group is subject to significant environmental regulation in respect to its exploration, evaluation, development and operational activities for uranium projects under the laws of the countries in which its activities are conducted. The Group currently has mining and processing operations in Namibia and Malawi, and exploration projects in Africa and Australia. The Group’s Policy is to comply with all applicable environmental laws and regulations in the countries in which it conducts business.
Specific environmental regulations, approvals and licences for the exploration, development and operation are applied to the activities conducted at each site. In addition many other international and industry standards are also applied to the Group’s activities, including those specified for the global uranium industry. These environmental laws, regulations and standards relate to environmental factors such as radiation, water, flora, fauna, air quality, noise, waste management and pollution control.
The Directors are not aware of any environmental matters which would have a significant adverse effect on the Group.
INTERESTS IN THE SECURITIES OF THE COMPANY
As at date of this report, the interests of the Directors in the securities of Paladin Energy Ltd were:
|Mr John Borshoff||21,877,394||1,500,000*|
|Mr Rick Crabb||4,881,528||Nil||Nil|
|Mr Sean Llewelyn||100,000||Nil||Nil|
|Mr Donald Shumka||50,000||Nil||Nil|
|Mr Ian Noble||21,000||Nil||Nil|
|Mr Peter Donkin||Nil||Nil||Nil|
The number of Directors’ meetings and meetings of committees held in the period each Director held office during the financial year, and the number of meetings attended by each Director were:
|Name||Number attended||Number eligible to attend||Number attended||Number eligible to attend||Number attended||Number eligible to attend||Number attended||Number eligible to attend|
|Mr Rick Crabb||12||12||-||-||3||3||2||2|
|Mr John Borshoff||12||12||-||-||-||-||2||2|
|Mr Sean Llewelyn||12||12||4||4||3||3||2||2|
|Mr Donald Shumka||12||12||4||4||3||3||2||2|
|Mr Ian Noble||12||12||4||4||-||-||2||2|
RESIGNATION, ELECTION AND CONTINUATION IN OFFICE OF DIRECTORS
In accordance with the Constitution of the Company, Mr Ian Noble retires by rotation at the Annual General Meeting and will not seek re-election. Mr Peter Donkin was appointed as a Non-executive Director by the Board effective 1 July 2010. The appointment of Mr Philip Baily has been announced as a Non-executive Director, effective 1 October 2010. Messrs Donkin and Baily will seek election by shareholders at the 2010 Annual General Meeting and Mr Rick Crabb will seek re-election, following his retirement by rotation.