The Paladin Energy Ltd (ASX: PDN) share price could see higher trading volume this morning after the company reported its Q2 2019 results after market close yesterday.
What were the highlights from Paladin's update?
Paladin provided updates on several of its major projects, with the Prefeasibility Study (PFS) for Langer Heinreich Mine to refine rapid restart plan remains on track for completion by September 2019.
Paladin also announced that it had secured an agreement to sell its 85% interest in the Kayelekera Mine in Malawi from its Hylea Metals Ltd (ASX: HCO)-led joint venture (JV).
Management said quarterly activities at the site were focused on the water treatment program with the lime water treatment plant operating for a total of 702 hours from 2 April 2019 to 28 May 2019, discharging 541,482 cubic metres of water to the Sere River within licence conditions.
The consideration for the sale of Paladin's interest in the Kayelekera Mine is $5 million, comprising $200,000 cash and $4.8 million in Hylea shares to be issued to Paladin ($1.8 million on completion, subject to a 12-month voluntary escrow, and $3 million on the third anniversary of completion).
On its Michelin Project, Paladin said it had received first mandatory transfer of an additional 5% participating interest in the project, increasing its stake to 55% as at the end of the quarter.
The Michelin Joint Venture agreement, dated 30 August 2018, includes a farm out over a five-year period whereby the Michelin Claimants will transfer a 5% participating interest to Paladin's Canadian subsidiary on an annual basis in return for Paladin funding all obligations for the Michelin Project.
In terms of the company's uranium operations, Paladin reported an 11% decrease in the weekly average spot price to US$24.83 per pound, with a United States (US) Department of Commerce investigation into US uranium imports cited as a key factor behind reduced demand for the commodity.
On the balance sheet side of the equation, Paladin reported cash and cash equivalents were US$25.4M (excluding restricted cash of US$11.2 million), a decrease of US$4.5 million from US$29.9 million at 31 March 2019.
How has Paladin's share price performed?
While we will wait and see how the market reacts to Paladin's latest update, the Aussie small cap's share price is currently trading at $0.14 per share – down from its $0.17 valuation at the start of the year.
Paladin has been an underperformer within the sector in comparison to the likes of Beach Energy Ltd (ASX: BPT) or Santos Ltd (ASX: STO) so far this year, which have climbed on higher oil prices and strong exploration results.
