The Kayelekera Mine (KM) remains on Care and Maintenance (C&M).
Quarterly activities at site focussed on treating and discharging water in order to reduce KM’s water balance prior to the onset of the next rainfall season and on maintaining idled plant and equipment in good working order. Controlled treated water release commenced in mid-April 2015 and continued without incident. In late June, discharge was suspended due to the very low receiving water level in the local river system.
The Feasibility Study for recommencement of production at KM is near completion with a final internal review of the study underway. The study to date has confirmed that KM remains a valuable strategic asset that can be quickly returned to production when justified by a higher uranium price environment. KM will provide an additional 2.5Mlb pa in production and has clear potential to produce strong cash flow for at least six years, as more than 50% of the project’s total reserves and resources remain for future development. Further regional exploration has the potential to provide additional upside.
The anticipated early approval by the Department of Mines of applications for five Exclusive Prospecting Licences (EPLs) covering areas north, south and east of KM that would have enabled exploration activity to commence in July 2015 did not eventuate. The Department has informed Paladin that the Government of Malawi has imposed a moratorium on applications and grants of all mining and exploration tenements while it introduces a new cadastral system and a new minerals act. Paladin anticipates that its five EPL applications are unlikely to be granted before the March quarter 2016. As a result, the Company has suspended exploration activities in Malawi until there is clarity on the provisions of the new mining code and its EPL applications have been granted.