March 2015 Quarter

 

Production by quarter

Langer Heinrich Mine Sep Qtr Dec Qtr Mar Qtr Year to Date
U3O8 Production (lb U3O8) 1,089,560* 1,376,578* 1,234,325 3,700,463

* Production for the September and December quarters, stated above, reflects an adjustment to in-circuit inventory relating to leached uranium within the process circuit.

The quarterly production of 1,234,325lb U3O8 was 10% lower than the preceding quarter.

Mining

.

Sep Qtr

Dec Qtr

Mar Qtr

Year to Date

Ore mined (t)

910,082

703,901

598,341

2,212,325

Grade (ppm U3O8)

802

928

868

860

Additional low grade ore mined (t)

345,943

183,341

353,664

882,948

Grade (ppm U3O8)

328

325

316

323

Waste (t)

3,803,470

4,119,374

4,021,724

11,944,567

Total Ore and Waste

5,058,495

5,006,616

4,973,729

15,039,840

Waste/Ore ratio

3.0

4.6

7.3

5.4

Mining production volumes remained on target (700,000 bcm/month) and consistent with budget.  The ore to waste ratio during the quarter was higher due to mining the deeper western pit areas as well as pre-stripping a new pit in the east for ore mining in this coming quarter. 

ROM ore stockpiles were sufficient at the end of the quarter for approximately five to six weeks’ ore supply and are being supplemented by medium grade ore from long term stockpiles in line with the mine plan. 

Extension of the tailings dam (TSF3) and re-establishment of a major south-north drainage channel for flood mitigation, commenced as planned in January 2015 and should be completed by June 2015.


Process Plant

Plant production for the March quarter was down 10% on the prior quarter, due largely to the failure of the pre-leach thickener #2 feed well in February (reported at the time).  This event took 12 days to repair and recommission and adversely impacted production by over 100,000lb U3O8.  During the quarter, significant maintenance was also undertaken in the front-end and mid-section of the plant to improve plant operating time and facilitate stable operation.  Throughput and feed grade for the quarter were 6% and 5% down respectively from the past quarter while recovery was up slightly.

.

Sep Qtr

Dec Qtr

Mar Qtr

Year to Date

Ore milled (t)

734,226

916,576

860,337

2,511,139

Grade ppm U3O8)

786

773

734

764

Overall recovery (%)

85.6

88.2

88.4

87.5

Production (lb U3O8)

1,089,560*

1,376,578*

1,234,325

3,700,463*

* The production stated above includes 135,007lb U3O8 not previously reported in the first half and consequential to an estimate change for recovery of leached uranium due to the continued better than expected performance of TSF3 and more importantly due to the performance efficiencies gained from the recently commissioned BRP.
 
The process optimisation strategy continues to focus on the better utilisation of existing equipment, operator and supervision training and the further integration of process control.

 

Innovation

The BRP was commissioned in early March and reached design capacity within the same day.  Apart from minor downtime to complete priority construction punch list items, the plant has run continuously since, at or above design throughput.  The process performance of the plant is substantially better than predicted and bicarbonate recovery levels will be much higher than forecast. Anticipated substantial reductions in reagent consumption, a notable reduction in certain plant processing constraints and improvements in soluble recoveries were immediately apparent and in the light of the plant’s current performance the Company now expects the BRP to exceed design expectation and consequent direct savings by up to 100% without need for further commitment of capital expenditure. 

In addition to the direct savings, there are a number of indirect savings and recovery improvements that were expected.  These too are being realised at a substantially greater level.  One of these indirect benefits is a reduction in soluble loss that has allowed the recognition of additional dissolved uranium inventory within TSF3 which will now be converted to drummed product in the normal course of operations. A consequential adjustment was required, and has been made, for all production since TSF3 was commissioned in October 2013.

The high degree of success from this project also augers very well for the ongoing innovation programme and subsequent expected reductions in C1 costs.

With BRP performing at levels well above the design expectation, some aspects of the innovation strategy for the site can now be realised earlier than expected.  It introduces a new paradigm for the carbonate uranium process route that will continue to bear significant additional and sustainable recovery benefits and unit cost savings in the near to medium term.  This will also allow the realisation of expected C1 cost reductions earlier than previously thought.  The next phase of work to further improve plant performance is scheduled for completion by the end of the FY2016.

 

Future Cost Optimisation Focus

The cost optimisation strategy will remain focused on process recovery, operator training and continuity of operation, all of which are capable of delivering sustained benefit in the short and medium term.

 

Production Guidance

FY2015 annual production guidance remains at 5.0Mlb to 5.2Mlb U3O8, as previously advised.

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