China National Nuclear Corporation the country's leading nuclear value has bought 25% of Paladin Energy's flagship uranium mine, Langer Heinrich, in Namibia.
Through its wholly-owned auxiliary China Uranium Corp., CNNC paid $190 million for the stake. Under the agreement, the Asian company will be able to buy one-quarter of production at spot market prices.
There is also an chance for Paladin to profit by securing extra long term off take planning with CNNC, at arm length market rates, from Paladin share of Langer Heinrich production," Paladin noted in a news release on Monday.
This growth also reinforces the import of Namibia in the global uranium mining context with the key Chinese nuclear organization now represent in uranium production in Namibia, Paladin wrote.
Completion of the deal is subject to Chinese regulatory approvals which are expected by mid-2014. In the interim, CNNC will pay a $20 million throwaway deposit to the Australia-based company.
Langer Heinrich began produce uranium in 2007 and has undergone 2 stages of expansion. The action has a current design capacity of 5.2Mlb of uranium think per year and is targeting production on 5.7Mlb in 2014.
Paladin will use the cash jab primarily to pay off debts. The Australian miner has been eager to discover a partner for the Namibian project for some time now. Last August the company lost 20% on its share price after it announced that talks with potential buys had failed; the company didn't think the offered price would appropriately reflect the strategic value of the asset.
On Monday, the company gained nearly 10% on the Toronto Exchange, trading at $0.60 per share. Over the past 12 months, Paladin has lost more than 50% of its value.
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