Paladin raises A$77 million

Vancouver — Aspiring uranium producer Paladin Resources (PDN-T, PDN-A) has closed a A$77 million (US$58.1 million) financing that will fund completion of development on its Langer Heinrich project in west-central Namibia.

The company issued 35 million shares at A$2.20 (US$1.66) apiece in the oversubscribed placement, which were entirely gobbled up by institutional funds in Australia, Canada, the U.S., the U.K. and Hong Kong. National Bank Financial and RBC Capital Markets were the co-lead agents for the offering, along with Sprott Securities. A commission of 5%, or A$3.85 million (US$2.9 million), was paid to the brokers.

The funds, along with the US$71 million project loan facility arranged in August, allows the company to finalize construction and development of its Langer Heinrich uranium mine. The open-pit operation is anticipated to come on-stream in the fall of 2006, with annual production of about 1,180 tonnes (2.6 million lbs.) of U3O8 over a projected mine life of 11 years.

Since acquiring the large-tonnage, low-grade project in mid-2002, the company has taken it through prefeasibility, and completed a bankable feasibility study earlier this year that showed positive economics and recommended development. The deposit hosts total mineral resource (compliant with Australia’s JORC code) of 46.3 million tonnes grading 0.07% U3O8, containing 32,800 tonnes (72 million lbs.) of U3O8.

Mineralization is associated with calcrete cemented sediments in a large Tertiary paleo-drainage system. The principle uranium mineral is carnotite, a secondary oxidized uranium-vanadium mineral, which occurs as thin films lining cavities and fracture planes, and as grain coatings and disseminations in calcreted sediments. The deposit covers over 15 km of the paleo-drainage, with localized accumulations, or higher-grade pods. Mineralization is near surface, from 1 to 30 metres thick and covers the 50- to 1,100-metre width of the paleo-valley.

Langer Heinrich is located about 40 km south of Rio Tinto’s (RTP-N) Rossing open-pit uranium mine, which has been in production since 1976. Rossing produced 3,582 tonnes (7.9 million lbs.) of U3O8 in 2004, with 2005 targeted output of about 3,800 tonnes (8.4 million lbs.).

An appetite for uranium juniors among investors has buoyed Paladin’s shares, having recently traded at the $1.60-level, in the mid-to upper-point of its 86-$2.25 1-year price range.