The Paladin (ASX:PDN) share price is up 19% in the last week. Here's why

The ASX uranium miner's shares have had a week to remember…

| More on:
Two cheerful miners shake hands while wearing hi-vis and hard hats celebrating the commencement of a HAstings Technology Metals mine and the impact on its share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Paladin Energy Ltd (ASX: PDN) share price continues to seemingly defy gravity.

Paladin shares are up an eye-watering 19.28% in just the past week alone (since last Tuesday's close). That's including the hefty 7.03% they have added today, which left this uranium miner at 99 cents per share. By comparison, the All Ordinaries Index (ASX: XAO) is up by 'just' 1.43% over the past week.

But not only that, Paladin shares are now up an incredible 280% in 2021 so far. They are also up 800% over the past 5 years.

Paladin is an ASX uranium miner. It's sole producing mine is the Langer Heinrich mine located in the African country of Namibia. This was mothballed in a "car and maintenance" condition a few years ago.

So why have Paladin shares rocketed by such an enriching amount in just the past week?

Well, we can perhaps trace these gains to an announcement the company made last month. In its first-quarter activities report released to investors on 25 October, the company announced it was continuing work on restarting production at Langer Heinrich, which is being brought back to life due to higher global uranium prices.

Paladin share price surges on mine reopening plans

Back on October 25, Paladin CEO Ian Purdy stated the following:

With a strong balance sheet, a robust and well defined Mine Restart Plan and strong project economics, Paladin is exceptionally well positioned to take advantage of a sustained recovery in global uranium pricing.

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 re-started, will deliver significant economic benefit to all of our shareholders.

Then, on 4 November, the company released another update on the Langer Heinrich mine. Paladin announced it had completed an updated mineral resource and ore reserve estimate.

This revealed Paladin is spending an estimated US$81 million on restarting production at Langer Heinrich. It also revealed the company is now estimating the mine holds a total of 84.8 megatonnes of ore reserves.

That's enough to give the mine an estimated 17 years of production life. That's based on a "life of mine production target" of 77.4 million pounds of triuranium octoxide. This new target is a meaningful increase on the previous estimate of 76.1 million pounds.

The company also confirmed "an estimated project execution timeframe of 18 months from project commencement to first production, with full production achieved after a further 15 months".

So it appears investors have largely pushed up the Paladin Energy share price based on these updates for the Langer Heinrich mine.

At today's closing share price of 99 cents, this company has a market capitalisation of $2.47 billion.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Resources Shares

a sad looking engineer or miner wearing a high visibility jacket and a hard hat stands alone with his head bowed and hand to his forehead as he speaks on a mobile telephone out front of what appears to be an on site work shed.
Resources Shares

Down 14% in 2024, why is the BHP share price sliding again today?

ASX 200 investors are bidding down the BHP share price on Wednesday.

Read more »

A mining employee in a white hard hat cheers with fists pumped as the Hot Chili share price rises higher today
Resources Shares

These ASX 200 mining stocks could rise 40% to 50%

Analysts think these miners are dirt cheap at current levels.

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

Fortescue share price leaps 5% as electric machinery makes a milestone

Fortescue is charging ahead with its electric mining ambitions.

Read more »

rising mining asx share price represented by happy woman miner in hard hat
Resources Shares

Why the BHP share price crushed the benchmark this week

BHP shareholders enjoyed a rewarding week.

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Dividend Investing

Here is the profit forecast to 2026 for BHP shares

Let’s unearth how much profit this miner could make.

Read more »

Female miner standing next to a haul truck in a large mining operation.
Resources Shares

Is the worst of the selling now over for ASX iron ore shares?

ASX iron ore giants like BHP, Rio Tinto and Fortescue rebounded this week after falling hard in 2024.

Read more »

Three satisfied miners with their arms crossed looking at the camera proudly
Resources Shares

Why are ASX 200 mining shares smashing the benchmark on Wednesday?

Rio Tinto, BHP and Fortescue shares are all charging higher today.

Read more »

Two miners standing together.
Resources Shares

Why is the South32 share price getting battered today?

ASX 200 investors are bidding down South32 shares today.

Read more »