Paladin Energy Ltd (ASX: PDN) shares are having a day to forget.
Or at least the company's shareholders are.
Shares in the S&P/ASX 200 Index (ASX: XJO) uranium stock closed yesterday trading for $9.68. In early trade on Tuesday, shares crashed a painful 28.9% trading at $6.88 apiece. At the time of writing, shares have recovered a touch to trade for $7.44 each, down 23.14%.
For some context, the ASX 200 is down a 'mere' 0.44% at this same time.
Here's what's got investors overheating their sell buttons today.
Paladin Energy shares tumble on uranium production woes
Paladin Energy shares are taking a beating after the ASX 200 uranium producer released a decidedly underwhelming production update on its Langer Heinrich Mine (LHM), located in Namibia.
While the planned production ramp-up at the LHM was reported to continue, investors clearly have taken note of the "lower than expected production results for October".
Noting ongoing challenges and operational variability experienced to date in ramping up production at the LHM, Paladin Energy looks to have spooked the market with a sizeable production downgrade.
Management's new FY 2025 production guidance is for 3.0 million to 3.6 million pounds of uranium. That's down from the previous forecast of 4.0 million to 4.5 million pounds. The ASX 200 uranium stock also withdrew all other guidance for FY 2025.
The company stated:
Paladin notes that the increased range of potential production outcomes will have a material impact on the company's unit operating costs and the realised price for uranium sales and forecast capital expenditure will be re-assessed given the LHM operational performance to date.
Management said they expect higher production levels in the second half of FY 2025 as the miner continues to work through the current challenges it's faced in ramping up operations at LHM.
Paladin reported that the 186,667 pounds of uranium produced in October was lower than expected due to
- Continued variability in the stockpiled ore processed, resulting in a lower-than-planned average feed grade for the month
- Disruptions to the supply of water from NamWater, which restricted the throughput volume of ore tonnes processed through the plant
The uranium miner's two-week planned shutdown at the LHM is set for the second half of November. Management noted that this "will allow for various improvement and operational upgrades to be implemented".
Looking to what could impact Paladin Energy shares in the year ahead, the ASX 200 uranium company stated:
The LHM is approximately seven months into a planned 21-month ramp-up period. Production levels are expected to increase as the overall ramp-up programme is progressed and due to the processing of higher grade mined ore which is expected to commence in the second half of CY2025.
The company remains confident of achieving a production run rate of 6Mlb p.a. at the LHM by the end of CY 2025.
How has the ASX 200 uranium stock performed longer term?
While Paladin Energy shares are now down by around 20% since this time last year, as you can see on the chart up top, long-term shareholders should still be sitting pretty.
Investors who bought the ASX 200 uranium stock five years ago, will be sitting on gains of around 750%.
