Paladin Energy Ltd (ASX: PDN) shares are catching the eye of investors on Wednesday. But for all the wrong reasons.
In morning trade, the ASX 200 uranium stock is down 9% to $5.81.
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Why are Paladin Energy shares crashing?
Investors have been selling the uranium producer's shares following the release of an update on the Langer Heinrich Mine (LHM) in Namibia.
Last week, the company revealed that heavy rainfall had led to the temporary suspension of operations.
The good news is that the LMH was not offline for long. This morning, the company advised that operations have now resumed at the mine after it experienced a one-in-fifty-year rainfall event.
This weather impacted its plans to accelerate the commencement of mining and resulted in short-term disruptions to operations.
These included the transport of people to site, restricted feed to the crushers due to the saturation of stockpiled ore, and excess surface water restricting safe access to the processing plant.
What's the damage?
There's good news and bad news in respect to damage.
Although there is no significant damage to the processing plant, there was damage to the access roads and minor civil infrastructure on the LHM site, as well as to the haul roads to the mine.
Access to the LHM has now been re-established and processing plant operations have resumed, but the advancement of the early commencement of mining to access higher grade ore has been impacted.
Management notes that the rain across Namibia has delayed the mobilisation of key mining equipment and personnel to site and has resulted in water ingress into the open mining pits. Whilst onsite pumping infrastructure is adequate to de-water the pits, access to the pits to commence mining is likely to be delayed.
Production guidance withdrawn
Unfortunately, the disruption to the early commencement of mining, together with the short-term impact of the suspension of operations, and the difficulties associated with processing saturated stockpiled ore, has resulted in the ASX 200 uranium stock withdrawing its production guidance for FY 2025.
Paladin Energy advised that it still expects to improve production levels in the second half of 2025 with the blending of ore from the open pit mines. However, it does not expect the LHM to achieve nameplate run-rate guidance of 6Mlb by the end of the year.
The ASX 200 uranium stock intends to provide further details relating to its production and mining with its quarterly update next month.
Paladin Energy shares are down 60% since this time last year.
