We're only three days into September and the Paladin Energy Ltd (ASX: PDN) share price has managed to surge more than 50% to an 8-year high of 78 cents.
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Why the Paladin Energy share price is surging this week
The Paladin Energy share price is surging this week as uranium spot prices bounce back to 6-year highs of US$34.25/lb according to Cameco.
The strength behind uranium prices has witnessed broad-based buying across the uranium sector, with the Global X Uranium Exchange Traded Fund (ETF) surge 32% since 20 August.
The Uranium ETF invests in a range of companies involved in uranium mining and the production of uranium components.
Paladin Energy's ASX-listed peers including Deep Yellow Limited (ASX: DYL) and Peninsula Energy Ltd (ASX: PEN) have also rallied strongly, up 38.7% and 35.7% respectively this week.
Paladin Energy: A comeback for the ages
Despite hitting 8-year highs, the Paladin Energy share price is still down 90% from its 2007 peaks of ~$9.45.
Back then, Paladin Energy was a major uranium producer with peak production of 5.6 million lbs in 2014 before operations were suspended due to plunging uranium prices.
Uranium prices surged to unsustainable levels of ~US$130/lb in 2007 before diving to the mid US$20/lb mark between 2016 and 2019.
Record low prices would force many projects, including Paladin Energy's Langer Heinrich project, into hibernation.
Paladin Energy successfully raised $192.5 million back in March this year to pay off debts and eye the restart of its Langer Heinrich project.
The company's July quarterly activities report highlighted the progress of "critical-path elements of its restart plan for the globally significant Langer Heinrich Mine".
This included activities such as ongoing pit and mining schedule optimisation, critical engineering documentation and a high level project delivery schedule development.
Paladin Energy CEO Ian Purdy commented on the company's progress, saying:
At Langer Heinrich we continue to advance optimisation work and have commenced detailed project
delivery and operational readiness planning. We continue to engage with global nuclear energy utilities
to secure long term contracts to underpin the restart of Langer Heinrich and ensure the project, when restarted, will deliver significant economic benefit to all of our shareholders.
