Paladin Energy (PDN) shares have jumped after the uranium production company slashed costs across the business in the face of the weakening uranium price.
The stock surged 9.4% to 52.5 cents at 1321 AEST – its biggest lift in nine months – after Paladin cut an unknown number of jobs in its head office, executive pay by 10% and cash costs by $23 million.
Reductions in cash costs came from $10.8 million in corporate overhead and exploration costs, which were 24% less than what they were in 2012-13, and $12.4 million in discretionary capital expenditure that would be realised in the current financial year.
"Optimisation strategies have now become even more pertinent with the further incremental weakening of the uranium spot price," Paladin said.
Paladin shares have been slammed over the past year, dropping 61.6% to 48 cents before today's rise – its lowest price since late 2004 – as the uranium price slid 23% to $US35 per pound.
But its problems are also symptomatic of other failures across the uranium industry, including an inability to deliver on promises (see Uranium's meltdown by Tim Treadgold). The company made heavy annual losses of $421 million last year and $173 million in the year before that.
Paladin was downgraded by six brokers in August after issuing a discounted share placement and ending talks to sell Langer Heinrich.
Most brokers polled on Bloomberg have a "hold" recommendation on the stock, with an average one-year forward price target of 73 cents.