Paladin raises A$77 million in oversubscribed offering

Vancouver – Aspiring uranium producer Paladin Resources (PDN-T, PDN-A) has closed an A$77 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 apiece in the oversubscribed placement entirely gobbled up by institutional funds in Australia, Canada, U.S., 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, was paid to the brokers.

The proceeds, 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, annually producing about 1,180 tonnes (2.6 million pounds) 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 pre-feasibility, and completed a bankable feasibility study earlier this year that showed positive economics and recommended development. The deposit hosts a JORC-compliant total mineral resource of 46.3 million tonnes grading 0.07% U₃O₈, containing 32,800 tonnes (72 million pounds) 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 one 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) Rssing open pit uranium mine, which has been in production since 1976. Rssing produced 3,582 tonnes (7.9 million pounds) of U₃O₈ in 2004, with 2005 targeted output of about 3,800 tonnes (8.4 million pounds).

Investor’s appetite for uranium juniors has buoyed Paladin’s shares, have recently traded at the $1.60-level, in the mid to upper point of its $0.86-$2.25 one-year price range.