WINDHOEK: Paladin Energy Limited has signed a US.dollars 200 million (about N.dollars 1,7 billion) long-term off-take contract for its uranium.
Paladin Managing Director John Borshoff announced on the company website on Wednesday that the company signed a six-year off-take agreement with an unnamed ‘major utility’ to provide 13.73 million pounds of uranium from 2019 through to 2024.
It will supply the uranium from its current African mining operations, or upcoming projects.
An off-take agreement refers to a contractual agreement for one party to supply another with a product within certain conditions such as purity and timing.
The Langer Heinrich Mine, located about 80 kilometres east of Walvis Bay and about 40 kilometers south-east of the Rössing Uranium Mine, is Paladin’s flagship project, while the Kayelekera Mine in Malawi is the company’s second mine.
“All of the uranium delivered under the long-term contract will be sold at market prices prevailing at the time of delivery bounded by escalating floor and ceiling prices,” Borshoff said.
As part of the agreement, the unnamed utility will hold security over 60.1 per cent of Paladin’s Michelin project in Canada.
The prepayment of the US.dollars 200 million will be applied to the repayment of US.dollars 134 million (about N.dollars 1,1 billion) worth of convertible notes, with the remainder held in the balance sheet as working capital.
“Paladin will now re-evaluate its strategic options in the light of this major achievement,” he added.