Paladin Strikes a Uranium Deal

Uranium miner, Paladin Energy (ASX:PDN) has struck a 6 year supply deal between 2019 and 2024 with an undisclosed energy utility. In the deal they have agreed to sell 13.73 million pounds of uranium from one of its mines in Africa or one of its future projects based on spot prices at a time with agreed floor and ceiling prices. Current uranium prices are at lows of less than US$50 per pound.

Shares in Paladin (PDN) jumped 10.32 percent on the deal, closing the day at $1.39. PDN stock have declined from $5 to its current levels since the Fukushima nuclear disaster. There were concerns that the company would have been unable to pay off a $134 million debt obligation. In the deal, the company reeives $200 million upfront before January 31, two months before the debt obligation is due.

The deal will be finalise din September. RBC Capital markets have upgraded the company's investment rating to "outperform".