Uranium producer Paladin Resources Ltd has reported commissioning problems at its flagship Langer Heinrich project in Namibia, though it believes the problems are "normal at this stage".
Uranium producer Paladin Resources Ltd has reported commissioning problems at its flagship Langer Heinrich project in Namibia, though it believes the problems are "normal at this stage".
Work is underway to rectify the problems and Paladin is confident it will achieve the design production rate of 2.6 millon pounds of uranium oxide by the end of the ramp-up period of June 2007.
However it has scaled back its forecast production during the ramp-up period to a range of 900,000Mlbs to 1.1 millionMlbs.
Paladin acknowledged the commissioning problems in a December announcement though at that time it said "none are considered major and will be remedied in the coming weeks".
In other news, Paladin said the Namibian government had applied a three per cent ad valorem royalty to its uranium production, after initially indicating the rate would be five per cent.
The company said this would improve the Langer Heinrich project's economics.
Paladin has also progressed the bankable feasibility study for its second wholly-owned uranium mine, Kayelekera in Malawi.
The company raised US$250 million (A$325 million) in December to fund the development of Kayelekera, as well as to establish a uranium marketing subsidiary and fund acquisition opportunities.
Paladin has been a sharemarket darling in recent years, helped by the doubling in the uranium price to US$72 per pund during 2006.
An extract from the company's half-year report is pasted below:
Project Construction and Commissioning
The Langer Heinrich Uranium Project (LHUP) is the 1st complete conventional mining and
processing operation to be brought into production in over a decade. Paladin was able to deliver
the projects as committed, achieving each of the project scheduled key milestones while holding the
April 2005 CAPEX budget which was not escalated despite the mining industry experiencing
significant construction cost increases during the 20 month construction term of the project.
As reported the construction and staged commissioning of LHUP was successfully achieved on 28
December 2006, within the original key timetable milestones. GRD Minproc, the Project Manager,
has demobilized the primary construction workforce, keeping a select team of 50 on site to
complete outstanding minor construction and rectification work identified as the project moves to
ramp up phase.
The real success of the project has been in the proving of the metallurgical flowsheet including the
unique Alkaline leach, ion exchange and direct precipitation chemistry to produce uranium oxide
product (yellowcake). The yellowcake was tested at the site laboratory which confirmed that the
product was well within the product specifications of the converter and aligned with the sample
quality that had previously been tested at the converters.
Although the BFS was completed and signed off in April 2005 a range of ongoing test work was
identified to further improve the process. This work led to a range of process enhancements
coming reasonably late in the design process. The design improvements were predominately made
in the precipitation area with the addition of a second precipitation stage. This step was considered
necessary to better ensure the quality of the product.
The design changes late in the overall schedule were able to be accommodated into the project by
implementing a staged commissioning of the circuit. This allowed time to complete the construction
of the upgrades to the plant back-end while commissioning the front end which included the early
commissioning of the crusher followed by leach then CCD.
As mentioned in the 28 December 2006 announcement the plant circuits have not yet been
optimised and a number of commissioning problems have surfaced which are considered normal at
this stage. The most significant of these problems include intermittent jamming of the apron feeder,
under performance to design parameters of the attritioner circuit and minor leakage of leach tank
seals; current work is under way to rectify these issues. The processing circuits including leach,
CCD, precipitation to packaging are, operating and performing well, with only minor modifications to
address.
LHU operations team assisted by GRD-Minproc is methodically mitigating the range of handover list
items. Paladin is confident it will achieve design production rate of 2.6Mlb U3O8 by the end of the
ramp up period in June 2007. Production to the end of the ramp up period is difficult to estimate
although expected to be in the range or 900,000Mlbs to 1,000,000Mlbs (previously forecast
1,000,000Mlbs to 1,150,000Mlbs).
The first commercial shipment of uranium is scheduled for March 2007.
