Paladin Energy Ltd. (PALAF.PK) quietly provided its year-end production update on Thursday, after delays at one of its mines in Africa caused the company to fall short of its full-year production guidance by about 260,000 pounds.
The uranium miner's Kayelekera plant in Malawi, southeast Africa, was forced to shut down to implement modifications and tweaking during the commissioning phase. In the fourth quarter (Paladin's fiscal year-end is in June) Kayelekera produced only 35,000 pounds of triuranium octoxide, a common uranium compound, versus the expected 350,000 pounds.
In all, Paladin reported full-year production of 2.7 million pounds of the uranium compound, short of the 3 million pounds expected.
"The entire miss from our estimates can be attributed to downtime at the Kayelekera plant," George Topping, Blackmont analyst, said in a note to clients. "Commissioning mines is a complex process, particularly in Africa."
By the end of June, Kayelekera was back on track and Paladin maintains 2010 guidance of 6.6 million pounds of the uranium material.
Blackmont is more conservative, estimating about 6 million pounds in 2010, but maintains an Outperform rating with a C$5 price target.