Paladin (ASX:PDN) share price soars 14% on 'strong cash position'

Shares in the uranium miner are racing ahead on the back of its half-year results.

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Key points

  • The Paladin share price is climbing by almost 14% today
  • The uranium miner reported a 57% improvement in its net loss position
  • The company also released details regarding its plan to restart its Langer Heinrich mine in Namibia

The Paladin Energy Ltd (ASX: PDN) share price is surging today after the uranium miner released its financial results for the half-year ending 31 December 2021.

The uranium miner reported a cash increase and a net loss decrease from its operations.

At the time of writing, the Paladin share price is up 13.87% at 78 cents. For comparison, the broader S&P/ASX 200 Index (ASX: XJO) is up 0.3%.

So what did Paladin reveal? Let's take a look…

Paladin share price surges on results

Highlights of the uranium miner's H1 FY22 results included:

  • Unrestricted cash and equivalents of US$38 million, up 24% from $30.6 million in the prior corresponding period (pcp)
  • Net loss of US$11 million, against US$25.4 million in the pcp
  • Cash expenditure of US$5.6 million, up 21% on the pcp of US$4.6 million
  • No dividend declared

Over the period, the company's net loss (after tax) from its continuing operations decreased by 57% — a drop the miner attributed to "a result of reduced finance costs" and "foreign exchange gains".

It also had a cash expenditure of US$5.6 million, while remaining on track for its full-year expenditure target of $12.2 million.

Between 30 June and 31 December 2021, the Paladin share price increased by 69%.

Langer Heinrich mine update

Looking more closely at its operations, Paladin remains committed to its mining portfolio in Australia and Canada.

It spent US$144,000 from its operating cash flow on new "property, plant and equipment" during the period, along with US$662,000 on meeting "minimum tenement requirements" at its sites.

Additionally, it continued to work towards its goal of restarting the Langer Heinrich mine in Namibia, Africa. During H1 FY22, Paladin released its 'Langer Heinrich Mine Restart Plan Update'. This confirmed an estimated cost of US$81 million to restart the mine and a "17-year mine life supported by ore reserves of 84.8Mt with an average U3O8 grade of 448ppm".

During the period, the company spent $1.57 million on "ongoing care and maintenance" of the site (from operating cash flow). It also spent US$932,000 on restart planning. However, no official restart date for the mine has been set.

Paladin said:

The restart work technical programs are now complete and have reinforced Paladin's confidence in the Langer Heinrich Mine as a robust, competitive long-life operation ready to rapidly restart production in the right uranium price movement.

What did management say?

Commenting on the results fuelling the Paladin share price today, CEO Ian Purdy said:

Our Langer Heinrich Mine remains competitively positioned to take advantage of an improving uranium market. The asset has a proven track record of production having successfully marketed over 43Mlb of U3O8.

Our strong cash position and low expenditure levels coupled with our detailed restart plans and our team of high calibre industry experts will ensure that, when the right uranium pricing market prevails, the Langer Heinrich Mine can be successfully restarted, delivering significant value to all of our stakeholders.

Paladin share price snapshot

Over the last 12 months, the Paladin share price has increased by 96%. For comparison, the broader S&P/ASX 200 Energy Index (ASX: XEJ) has increased by 3.2%. However, Paladin shares are down 12.5% this year to date.

In April last year, Paladin shares were trading as low as 36 cents. In September, shares climbed to a high of $1.12.

Earlier this week, the Paladin share price climbed by 9% despite no official news from the company.

The company has a market capitalisation of $1.83 billion.

Motley Fool contributor Alice de Bruin 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.

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