The Paladin Energy Ltd (ASX: PDN) share price continues its recent momentum, surging 8.33% in early trade on Monday.
At the time of writing, the uranium miner’s share price is up 5.13% at 82 cents a share.
Here’s what might be driving the Paladin Energy share price to fresh multi-year highs.
Surging uranium prices
Uranium prices bounced back to a six-year high of US$35/lb last week.
This witnessed broad-based buying across the ASX uranium sector, from large cap players like Paladin Energy to small cap explorers such as Boss Energy Ltd (ASX: BOE), Deep Yellow Limited (ASX: DYL) and Peninsula Energy Ltd (ASX: PEN).
To capitalise on recovering uranium prices, Paladin Energy is looking to restart operations at its “globally significant” Langer Heinrich Mine located in Nambia.
The project began producing uranium back in 2007 with a peak production of 5.6 million lbs in 2014, before transitioning into care and maintenance in August 2018 due to the sustained low uranium price.
Paladin Energy successfully raised $192.5 million back in March to prop up its balance sheet in preparation for Langer Heinrich’s restart.
During FY21, Paladin Energy kicked off its mine restart plans, progressing “critical-path elements” such as mine optimisation, the appointment of key contractors and a high-level project delivery schedule.
In Paladin Energy’s annual report to shareholders, CEO Ian Purdy said:
At the Langer Heinrich Mine we continue to focus on the continued de-risking of the mine restart. We continue to engage with global nuclear energy utilities to secure long term contracts to underpin the restart of the Langer Heinrich Mine and ensure the project, when re-started, will deliver significant economic benefit to all of our shareholders.
Paladin Energy share price joins the ASX 300
Paladin Energy will be making its well-deserved entry into the S&P/ASX 300 (INDEXASX: XKO) on 20 September.
Shares in the uranium producer have surged 67% in the past month and 239% year-to-date thanks to a jump in spot prices.
The post Why the Paladin Energy (ASX:PDN) share price is up 5% on Monday appeared first on The Motley Fool Australia.
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More reading
- Guess which sector last week’s top performing ASX shares come from
- ASX uranium shares are booming this week. Here’s why.
- Up 50% this week, the Paladin Energy (ASX:PDN) share price is booming. Here’s why.
- Which ASX shares are set to finish the week as the top movers on the ASX 300?
- Which ASX 300 shares are the biggest winners and losers on Thursday?
Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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