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Uranium miner seeks $70m in fresh funds

IT IS not the best of times for a uranium producer to be tapping the market for fresh funding. But that is what ASX-listed African uranium producer Paladin Energy is doing, seeking up to $70 million from an institutional placement of shares.

IT IS not the best of times for a uranium producer to be tapping the market for fresh funding. But that is what ASX-listed African uranium producer Paladin Energy is doing, seeking up to $70 million from an institutional placement of shares.

The funds are needed to strengthen the group's balance sheet to "ensure the company is well placed to meet all future commitments and pursue identified growth options". It was not inspiring stuff from a company whose share price has been trashed since investor confidence in uranium stocks was undermined by the partial meltdown at Japan's Fukushima nuclear plant in March.

Paladin was a $5 stock before the earthquake and tsunami hit Japan. Ahead of a trading halt for the bookbuild for the placement, Paladin was trading at $1.31 a share.

Expansion at the group's Langer Heinrich mine in Namibia and the development of the Kayelekera mine in Malawi have also caused some headaches, contributing to the group's 74 per cent share price fall since Fukushima.

Last month, the Perth-based group talked up the prospect of big-spending joint-venture partners picking up the pace on the development of its other uranium projects. It said it had received eight "genuine inquiries" from potential joint-venture partners and it was a "reasonable aim" to have something finalised by the end of the calen-dar year.

Paladin's managing director, John Borshoff, said at the time introducing joint-venture partners to fund new developments would achieve growth in a much less costly manner. "This program of monetising some of our non-producing projects with third-party engagement for minority interests was always on our agenda," he said.

"We are positioned to make Paladin a partner of choice and this is reflected in the interest and the intensity of discussions we are having."


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