Paladin announced plans to put Langer Heinrich on a care-and-maintenance plan in May as a result of weak uranium prices.
Australian uranium producer Paladin Energy (ASX:PDN) has begun an optimization process at its shuttered Langer Heinrich mine in Namibia.
The concept study will look for ways to enhance the site in preparation for production restart.
The announcement to put Langer Heinrich on a care-and-maintenance (C&M) plan was first announced by Paladin in May. The care and maintenance transition was completed in August.
The decision to halt production at the African site came as a result of depressed uranium prices, which made the cost of production unsustainable.
Over the last 6 months and particularly this last fiscal quarter, the spot price of uranium has climbed by 40 percent from US$21.80 per pound in January, to US$28.95 where sits now.
This gradual uptick has prompted Paladin to commence an optimization study to examine potential ways the mining process can be improved at the site.
Paladin is currently entertaining ways to decrease costs, increase throughput and productivity and potentially starting the recovery of a vanadium by-product.
“We want to position Langer Heinrich to be among the first significant global producers to return to production once the uranium price recovers to acceptable and sustainable levels, which it is moving towards currently,” Scott Sullivan, Paladin CEO, said in the press release.
Once the concept study wraps up, Paladin will the commission a prefeasibility study (PFS) for the Langer mine.
“The company will consider multiple processing options for the mine in a PFS to be completed in 2019, which would give priority to initiatives to strengthen Paladin’s plan for a rapid, reliable restart of Langer Heinrich once the uranium price has improved.”
The combined concept study and the PFS will be dubbed the optimization study, and will focus on enhancing two key areas, the first, resolving the current operations issues in order to improve the stability and reliability of the mine and the processing facility by increasing productivity and reducing risk.
Secondly, utilizing the industry’s latest technological developments to increase value through the reduction of production costs.
“It is expected to have a relatively low cash cost of production based on current plans and relatively low capital expenditure needed to restart from C&M and we want to improve our production strategy even further through the optimization studies,” added Sullivan.
In addition to Langer Heinrich, Paladin also operates the Kayelekera uranium mine located in northern Malawi.
Shares of Paladin Energy were down 5 percent on Thursday (December 6), trading at AU$0.19.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.