Paladin Resources Ltd. (OTCPK:PALAF) shares skidded on both the Toronto and Australian stock exchanges Wednesday after the company announced it expects a production shortfall in fiscal 2007 at Langer Heinrich, its Namibian-based uranium mine.
Paladin said its effective production shortfall from Langer is 130,000 pounds of uranium after downgrading its guidance from 400,000-600,000 pounds of uranium to 270,000 pounds.
As a result of the revised guidance, RBC Capital analyst Chris Lancaster is now forecasting a loss for the company in 2007 of US$5.9 million versus a previous assumed profit of US$1.9 million.
Mr. Lancaster, however, dismissed his latest 2007 forecast, saying it is almost of no consequence.
Paladin's production downgrade for fiscal 2007 should come as no great surprise as the company remains in the commissioning phase at Langer Heinrich," he told clients."
The big picture at Paladin remains in place, he added, with fiscal 2008 profits expected to reach US$111-million.
Mr. Lancaster maintained his "outperform" rating on the stock and left his target price of AUD$12 unchanged.
"We regard today's selldown of 5% [on the Australian Stock Exchange] as an over-reaction. As such we believe there may be no better time to buy the stock."