June 2014 Quarter

 

Production by quarter and FY14 total

Langer Heinrich Mine Sep 2013 Qtr Dec 2013 Qtr Mar 2014 Qtr June 2014 Qtr FY14
U3O8 Production (lb U3O8) 1,429,374 1,431,307 1,392,694 1,338,831 5,592,206

The quarterly production of 1,338,705lb U3O8 was down slightly on the preceding quarter, however the annual production of 5,592,206lb was 5.7% above FY13.  

Mining

. Mar 2014 Qtr June 2014 Qtr FY14
Ore mined (t) 909,533 534,259 3,735,294
Grade (ppm U3O8) 1,021 949 791
Additional low grade ore mined (t) 357,922 500,984 2,786,886
Grade (ppm U3O8) 325 325 328
Waste (t) 3,729,823 4,028,054 15,049,032
Total Ore and Waste 4,997,298 5,063,277 21,571,212
Waste/Ore ratio 2.94 3.89 2.31

Ore mining activities concentrated on the eastern side of the deposit in Pit G1 and Pit G3.  Waste stripping continued from Pit H which is located on the western side of the deposit. Less ore was mined during the period as the focus was on waste stripping in order to expose high grade ore in Pit H, however, overall mined tonnages were slightly greater than the previous quarter consistent with the mine plan.  During the next quarter ore mining will resume in Pit H and further waste stripping will be continuing in the Pit H2 area.

ROM ore stocks have been maintained at approximately four weeks’ supply and are being supplemented by medium grade ore from long term stockpiles in line with the mine plan.

Process Plant

The plant again maintained steady improvement during the quarter and the fiscal year.  Throughput for the year was up 8.2% and feed grade down by 3.6% from the previous year.  Overall recovery for the year increased from 86.0% in FY13 to 87% this year.

The IX resin replacement disclosed in the previous quarterly is well underway and process recoveries and uranium production are expected to increase in the coming quarters as a consequence.  Scale build-up identified during the quarter, which also restricted production, was rectified post quarter.

. Mar 2014 Qtr Jun 2014 Qtr FY14
Ore milled (t) 982,209 908,238 3,723,555
Grade (ppm U3O8) 750 781 783
Overall recovery (%) 85.8 85.6 87.0
Production (lb U3O8) 1,392,694 1,338,831 5,592,206

The process optimisation strategy has focussed on continuous improvement during the year, seeking to better utilise existing equipment to make further production and unit cost gains where possible.  This process has also focussed on reducing unit water consumption with considerable success.  Over the last two years, water consumption per tonne of leach feed has been reduced from greater than 1Kl/t to less than 0.5Kl/t.

Water supply to the project continues to be sufficient, stable and secure under the water supply agreement executed with NamWater in November 2013.  This initial one-year agreement which is based upon the supply of desalinated sea water from existing infrastructure is being re-negotiated to extend the term and rationalise the price.

Future Cost Optimisation Focus

The focus has also remained on process innovation with considerable success and further substantial gains expected.  There are many targets for innovation in the Langer Heinrich process due to it being new and consequently at the start of its evolution to a mature and optimised process.  In particular leach and IX reagents, which represent a high proportion of the current C1 costs, represent a significant opportunity.  The successful use of nano-filtration at the Kayelekera mine has also opened this pathway for innovation at Langer.  Flowsheet improvements incorporating this emerging technology and other established technologies are currently being considered and developed, all of which Paladin believes will provide a pathway to C1 costs reaching $22/lb U3O8 (in FY14 terms) by FY16.

The sustained reduction in operating cost and improved plant performance demonstrated over the past is a reflection of the prior success of these twin strategies of optimisation and innovation.

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