Paladin Energy Ltd (ASX: PDN) boosted its revenue significantly in the first half of the year, which was good news for the company, but according to the analyst team at Shaw and Partners, the real story is the company's growth plans across both Namibia and Canada.
Paladin reported revenue of US$138.3 million for the first six months of the year, up 79%, but posted a net loss of US$6.6 million driven by spending on ramping up production at its Langer Heinrich mine in Namibia.
The company had previously reported that fourth-quarter production at Langer Heinrich jumped by 16% over the previous quarter to 1.23 million pounds.
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Growth plans developing
Managing Director Paul Hemburrow said when releasing the quarterly report that Langer Heinrich was performing well.
As global interest in nuclear energy continues to strengthen, I am delighted by our progress in ramping-up operations at Langer Heinrich Mine. The new level of production achieved during the quarter provides insight into the robust performance that can be achieved from this strategic uranium asset. Our site team's goal is to continue delivering a consistent operational performance for the remainder of this financial year. The capability of our Canadian team is growing under the leadership of Dale Huffman as President Paladin Canada, with exploration and permitting workstreams advancing at PLS.
PLS refers to the Patterson Lake South Project in the Athabasca region of Canada, which Paladin acquired in 2024.
The company's website states that it is a high-grade, near-surface uranium deposit at an advanced stage of development.
Top-tier projects in focus
It's the combination of the two projects – Langer Heinrich and PLS – which has the Shaw team interested.
As they said in a research note to clients this week:
The combination of Langer Heinrich with Patterson Lake South has the potential to transform Paladin Energy into a 15 million pound per year uranium producer generating over US$2b of EBITDA per annum. At a 10x EBITDA multiple – that would make our $17.50 price target very conservative.
Shaw said the PLS project currently has a mineral reserve of 93 million pounds, "and Paladin is aiming to bring it into production in 2031 at a rate of 9Mlb/yr over a 10 year mine-life''.
They added:
Paladin's focus will shift to Patterson Lake South, its tier 1 growth project in the Athabasca Basin, post completion of a successful ramp-up of Langer Heinrich to full capacity in mid-2026. The Paladin share price has re-rated as the market recognised that the temporary commissioning issues at Langer Heinrich, were temporary. The next phase of Paladin outperformance will be driven by a strengthening uranium market, and by the market recognising the valuation upside in PLS. Paladin is one of our preferred exposures to the coming uranium market super-cycle.
The Shaw price target of $17.50 compares with Paladin Energy's current share price of $12.58, representing potential upside of 39.1%.
Paladin was valued at $5.65 billion at the close of trade on Wednesday.
