ASX Announcement
27 August 2021
ANNUAL REPORT
FOR THE YEAR ENDING 30 JUNE 2021
Paladin Energy Limited (ASX:PDN OTCQX:PALAF) (“Paladin” or “the Company”) is pleased to announce its financial
results for the year ended 30 June 2021.
FY2021 HIGHLIGHTS
Financial and Operational Performance
• During the year, Paladin continued to progress the critical-path elements of its Restart Plan1 for the globally
significant Langer Heinrich Mine, including:
− optimisation of pit design, tailings management and mining schedules
− high level project delivery schedule development
−
appointment of key contractors
• The Langer Heinrich Mine remained on care and maintenance during the year
• The reset of Paladin’s capital structure via completion of the successful Placement and Entitlement Offer raising
A$218.7M (before costs) with redemption and cancellation of the US$115M Senior Notes and the discharge of
all related security
• Cash expenditure for FY2021 of US$10.2M (excluding one-off equity raise costs of US$7.6M and payments
associated with the redemption of the US$115M Senior Notes)
• FY2022 cash expenditure is forecast to be US$12.2M, (including 100% Langer Heinrich Mine costs), an increase
from FY2021 cash expenditure, primarily due to investment in future growth options through exploration and
the impact of the forecast strengthening of the Australian and Namibian dollars. Cash receivables are forecast
to be US$3M with US$1M expected from CNNC Overseas Holding Limited (Paladin’s minority shareholder in
1 ASX Announcement “Langer Heinrich Mine Restart Plan” dated 30 June 2020
the Langer Heinrich Mine) to fund Langer Heinrich care and maintenance activities and US$2M expected from
Lotus Resources Limited associated with the repayment of the environmental bond from the sale of Paladin
(Africa) Ltd
• Net loss after tax from continuing operations for FY2021 was US$58.3M (FY2020 loss of US$46.1M), with the
increased loss due to a non-cash revaluation of subsidiary loans
• The Company held US$30.7M1 of cash and cash equivalents as at 30 June 2021, and holds no corporate debt.
Health & Safety
• Paladin had no lost time injuries or reportable environmental incidents during FY2021
• Five employees at the Langer Heinrich Mine tested positive to COVID-19 during the year. These employees
have all recovered and returned to work
• The Company continued to maintain appropriate protocols across all locations to minimise the potential
transmission of COVID-19.
Corporate
• Ms Melissa Holzberger and Ms Joanne Palmer were appointed as independent non-executive directors of the
Company during FY2021.
• Paladin further expanded the strength and breadth of its management team during the year with the
appointments of Mr Jonathon Clements (General Manager Projects and Development), Mr Jess Oram (General
Manager Exploration) and Mr Alex Rybak (General Manager Business Development & Marketing)
• An equity raise by way of a fully underwritten pro-rata accelerated non-renounceable entitlement offer and
institutional placement, raising A$218.7M, was completed during the year
• Proceeds from the Equity Raise were used to fully redeem the US$115M Senior Notes. The reset of Paladin’s
capital structure has cleared the Company’s corporate debt, providing capital flexibility and a platform to
maximise shareholder value upon expected improvements in the uranium market.
Paladin CEO, Ian Purdy said “With our successful equity raising and debt redemption during the year, Paladin is now
strongly placed to continue progressing the Langer Heinrich Mine towards restarting production and advancing our
portfolio of high-grade exploration assets. The addition of Jonathon, Jess and Alex to Paladin’s executive
management team have significantly strengthened our internal skill sets.
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.”
This release has been authorised for release by the Board of Directors of Paladin Energy Ltd.
For further information contact:
Ian Purdy
Chief Executive Officer
P: +61 8 9423 8117
E: paladin@paladinenergy.com.au
About Paladin
Paladin Energy Limited (ASX:PDN OTCQX:PALAF) is an Australian listed uranium company focused on maximising
the value of its 75% stake in the Langer Heinrich Mine in Namibia.
Langer Heinrich is a globally significant, long-life operation, having already produced over 43Mlb U3O8 to date.
Operations at Langer Heinrich were suspended in 2018 due to low uranium prices.
Beyond Langer Heinrich, the Company also owns a large global portfolio of uranium exploration and development
assets. Nuclear power remains a cost-effective, low carbon option for electricity generation.
1 Excluding restricted cash of US$1M
Paladin Energy Ltd
2
Appendix 4E - Financial Report
Financial year ended 30 June 2021
Paladin Energy Ltd
ABN or equivalent company reference
ACN 061 681 098
Results for announcement to the market
Revenue from sales of uranium oxide
Up
100%
Revenue
Up
100%
Loss after tax attributable to members Down
45%
Net loss for the year attributable to
members
Down
45%
30 June 2021
US$’000
30 June 2020
US$’000
to
to
to
to
2,985
2,985
-
-
(43,983)
(79,866)
(43,983)
(79,866)
Loss per share (US cents)
(2.0)
(4.1)
Dividends
Amount per security
Franked amount per
security
It is not proposed to pay dividends for the year
N/A
Previous corresponding year:
No dividend paid
N/A
N/A
N/A
An explanation of the results is included in the Operating and Financial Review and the Financial
Report attached.
Net tangible assets per share
US$0.09
US$0.04
30 June 2021
30 June 2020
Other
Previous corresponding period is the year ended 30 June 2020.
All foreign subsidiaries are prepared using IFRS.
TABLE OF CONTENTS
Corporate Directory ......................................................................................... 3
Chairman’s Letter ............................................................................................ 4
Insights from the CEO ...................................................................................... 5
Operating and financial review........................................................................... 8
Ore Reserves and Mineral Resources ................................................................. 11
Health and Safety / Sustainable Development ..................................................... 16
Coporate Governance Statement ...................................................................... 17
Directors' Report ............................................................................................ 18
Remuneration Report ...................................................................................... 24
Contents of the Financial Report ....................................................................... 39
Consolidated Income Statement ....................................................................... 40
Consolidated Statement of Comprehensive Income ............................................. 41
Consolidated Statement of Financial Position ...................................................... 42
Consolidated Statement of Changes in Equity ..................................................... 43
Consolidated Statement of Cash Flows ............................................................... 44
Notes to the Consolidated Financial Statements .................................................. 45
Directors' Declaration ...................................................................................... 88
Independent Audit Report ................................................................................ 89
Additional Information..................................................................................... 95
Paladin Energy Ltd
2
Corporate Directory
DIRECTORS
Non-Executive Chairman
Mr Cliff Lawrenson
Non-Executive Directors
Mr Peter Main
Mr Peter Watson
Ms Melissa Holzberger
Ms Joanne Palmer
Chief Executive Officer
Mr Ian Purdy
Company Secretary
REGISTERED OFFICE
Mr Jeremy Ryan
Level 8, 191 St Georges Terrace
Perth Western Australia 6000
Telephone: (+61 8) 9423 8100
Facsimile: (+61 8) 9381 4978
Email: paladin@paladinenergy.com.au
Web: www.paladinenergy.com.au
SHARE REGISTRY
Computershare Investor Services Pty Ltd
INVESTOR RELATIONS
AUDITORS
STOCK EXCHANGE LISTINGS
Level 11, 172 St Georges Terrace
Perth Western Australia 6000
Telephone: 1300 850 505 (within Australia) or
(+61 3) 9415 4000 (outside Australia)
Facsimile: (+61 3) 9473 2500
Mr Alex Rybak
Level 8, 191 St Georges Terrace
Perth Western Australia 6000
(PO Box 8062 Cloisters Square PO WA 6850)
Telephone: (+61 8) 9423 8135
Facsimile: (+61 8) 9381 4978
Email: alex.rybak@paladinenergy.com.au
PricewaterhouseCoopers
125 St Georges Terrace
Perth Western Australia 6000
Australian Securities Exchange
Code: PDN
Namibian Stock Exchange
Code: NM-PDN
The annual report covers the Group consisting of Paladin Energy Ltd (referred throughout as the Company or
Paladin) and its controlled entities (the Group).
Paladin Energy Ltd is a company limited by shares, incorporated and domiciled in Australia.
Through the use of the internet, we have ensured that our corporate reporting is timely, complete, and available
globally at minimum cost to the Company. All press releases, financial statements and other information are
available on our website www.paladinenergy.com.au.
Paladin Energy Ltd
3
Chairman’s Letter
Dear Stakeholders
On behalf of your Board of Directors, I am delighted to present the 2021 Annual Report. During the 2021 Financial
Year (FY2021), we achieved a number of important milestones as Paladin’s team works towards restarting our
Langer Heinrich Mine and unlocking significant shareholder value.
Our Langer Heinrich Mine, located in Namibia, remains a globally significant asset within the uranium sector. The
Mine Restart Plan1 completed in 2020 highlighted the strategic significance of the asset and the potential economic
returns that can be delivered to shareholders under the right uranium price environment. The team continues to
refine and progress the work packages required to deliver the Langer Heinrich Mine back into production and to
ensure that we execute the project with minimised risk.
With the growing global demand for electricity, and the targets for reduced CO2 emissions, nuclear energy will
continue to play a key role in the decarbonisation of global power generation. At Paladin, we stand ready to
contribute positively to the reduction of carbon emissions.
Uranium mining and processing are critical components of the nuclear fuel cycle as they provide the raw material
for producing clean, sustainable base-load electricity. The uranium which will be mined and processed at the Langer
Heinrich Mine in the future and used to resource nuclear power plants to displace coal-fired electricity will
significantly contribute to reducing CO2 emissions over the life of the mine.
During the year we restated our core sustainability commitments to the critical areas that underpin our shared
present and our future: Health, Safety and Wellbeing, People and Opportunity, Community and Social Investment
and Environmental Stewardship, via our 2020 Sustainability Update. At Paladin, we are committed to upholding
our sustainability standards for our people, communities and environment. In this, we are clear that our personal
actions will always reflect both Paladin’s values and our sustainability commitments.
Importantly, during the year, the Company undertook a transformational reset of our capital structure. The
Company now has no corporate debt and the benefit of increased capital flexibility will provide a solid foundation
for management to continue its focus on the Langer Heinrich Mine restart and value creation for equity holders in
an improving uranium market.
We extended our Board of Directors during the year with the addition of Melissa Holzberger and Joanne Palmer as
independent Non-Executive Directors. Melissa’s extensive experience in legal, governance and compliance roles
and Joanne’s experience within audit and financial services will help strengthen the Board’s experience and
expertise. The appointment of Melissa and Joanne reflects Paladin’s commitment to maintaining the highest
standards of governance. Their appointments enhance the attributes, experience and diversity of our Board,
providing a broader skill set to ensure the effective governance of our Company.
I would like to take this opportunity to thank all of our stakeholders, particularly our staff in Australia, Namibia and
Canada, for their ongoing support and commitment to our efforts in advancing Langer Heinrich towards restarting
production.
Finally, on behalf of the Board I would like to thank you, our shareholders, for your continued support and I look
forward to reporting on the progress we make over the coming year.
Yours faithfully
Cliff Lawrenson
Chairman
1 ASX Announcement “Langer Heinrich Mine Restart Plan” dated 30 June 2020
Paladin Energy Ltd
4
Insights from the CEO
Dear Shareholders
The 2021 Financial Year (FY2021) has been another year of significant progress for Paladin. Over the course of the
year we completed the transformation of the company and returned Paladin to its position as an industry leading
Uranium company. Key achievements included:
• Advancing the Langer Heinrich Mine restart planning and further de-risking the operational restart activities
• Extending our leadership team to ensure we have the right skills to bring the Langer Heinrich Mine back into
production and pursue our existing growth opportunities
• Completing a transformational reset of our capital structure through the redemption of our corporate debt,
and
• Continuing our marketing activities to secure long-term uranium offtake agreements.
During the year Paladin also committed to a shared accountability to the core principle of delivering value through
sustainable development. Our Paladin Values support every decision we take, and we proactively uphold key
operating responsibilities to ensure we are considered and transparent in all we do. With these strong foundations,
we can focus on achieving economic, social and environmental sustainability in balanced and successful ways for
all stakeholders.
Advancing the Langer Heinrich Mine towards production
Our primary focus during the year was advancing activities to return the Langer Heinrich Mine back to production.
Paladin owns 75% of the Langer Heinrich Mine located in Namibia, which commenced operations in 2007 and has
produced and sold over 43Mlb of U3O8 to date. The mine was transitioned into care and maintenance in August
2018 due to the sustained low uranium price.
The release of the Langer Heinrich Mine Restart Plan1 (the Restart Plan) in FY2020 provided a low risk, reliable
restart plan balancing the ability to rapidly respond to strengthening uranium prices and maximising asset value.
Since its release the Company has continued to progress the restart plan and engage with our key consultants
AMC (mine planning), Lycopodium Minerals (engineering) and Elemental Engineering (processing). Work
programmes included:
• Optimisation of pit shells and improved pit design with revised wall angles and detailed geometallurgical data
input into resource models for the mining phase
• Developing a separate detailed geometallurgical model for the first year mining of the medium grade stockpile
• Updating the Mineral Resource model including the validation of dilution assumptions from historical mining
data
• Engagement with the previous mining contractor on future improvements
• Completing various discipline reports (civil, structural, tanks, electrical, instruments, piping and valves) on plant
and equipment condition, ready for prioritisation and detailed costing
• Completing detailed analysis of historical plant performance from the metallurgical database and establishing
key process issues and drivers
• Completing reports on plant run-time and capacity, at target grades and crushed ore volumes, and
• Engagement of original equipment manufacturers to provide technical support for target process and
equipment improvements.
1 ASX Announcement “Langer Heinrich Mine Restart Plan” dated 30 June 2020
Paladin Energy Ltd
5
Insights from the CEO (continued)
The engagement of high calibre industry experts, and our own detailed project work, will ensure that, when the
right uranium pricing market prevails, the Langer Heinrich Mine can be successfully restarted delivering value to
all stakeholders.
During the year the Company also continued its care and maintenance activities at the Langer Heinrich Mine, which
are focused on maintaining the operational integrity of the plant and ensuring all plant and equipment is in a state
of readiness for a production restart.
Our People
Our people remain the key to the ongoing success of our Company. We have carefully recruited over the year to
ensure we have the right team to bring the Langer Heinrich Mine back into production and drive the future growth
of the Paladin.
•
•
Jonathon Clements was appointed General Manager Projects and Development. Jonathon is a mining and
mineral processing industry professional with over 30 years’ of experience in the resources industry. His
extensive experience and qualifications include the management of large sustaining capital portfolios,
feasibility studies, maintenance and global projects from concept to construction
Jess Oram was appointed as General Manager Exploration. Jess is an experienced exploration geologist and
manager with over 25 years’ of experience in mineral exploration and management across a variety of
commodities and companies
• Alex Rybak was appointed General Manager Business Development & Marketing. Alex is an M&A, Business
Development and Strategy professional with over 20 years’ of experience, spanning both in-house and in
advisory capacities across a broad range of sectors including mining, oil & gas, healthcare and financial services.
The health and safety of our people remains a core priority for the company. During the year we reported no lost
time injuries or reportable incidents. To safeguard our employees against COVID-19, the company continued to
implement a range of protocols across all of our locations aimed at reducing the potential for transmission.
Strong balance sheet provides flexibility
Paladin completed a transformational reset of our capital structure during FY2021. The Company undertook an
equity raise by way of a fully underwritten pro-rata accelerated non-renounceable entitlement offer and
institutional placement to raise A$218.7M. The entitlement offer and institutional placement were both heavily
oversubscribed, demonstrating investors’ confidence that Paladin is well positioned to take advantage of expected
improvements in the uranium market. The successful equity raise and Senior Note redemption resulted in:
• A reset the Company’s capital structure, significantly improving the Company’s financial strength and resilience;
• Removal of the legacy corporate debt via the redemption of the US$115M Senior Notes;
•
Increased optionality on future funding structures for the capital required to restart the Langer Heinrich Mine;
and
• Strengthening of the Company’s uranium marketing position as a preferred counterparty.
With unrestricted cash reserves of US$30.7M at 30 June 2021, the Company maintains a disciplined and patient
approach to restarting the Langer Heinrich Mine and has the financial flexibility to respond to market conditions.
We will only restart operations after securing an appropriate term-price contract with sufficient tenure and value
to deliver an appropriate return to all stakeholders.
Paladin Energy Ltd
6
Insights from the CEO (continued)
Uranium market fundamentals remain positive
In the face of the COVID-19 pandemic, global nuclear power generation remained stable in FY2021. China remains
at the cornerstone of global nuclear growth with four units added to the grid over the past 12 months and
construction commencing on a further eight new nuclear plants. Worldwide, FY2021 saw a total of ten new
reactors enter commercial operation, including in the United Arab Emirates and Belarus.
With 54 reactors under construction across 20 countries, the outlook for nuclear power remains positive. The
advancement of Small Modular Reactor technology in multiple countries is expected to provide additional impetus
to uranium demand in future years.
With many operating nuclear plants economically disadvantaged by market deregulation in the United States, the
successful implementation of a US$1.2 trillion infrastructure bill introduced by the Biden administration will
provide key industry support.
The first half of 2021 has seen the re-emergence of strong secondary uranium demand via financial entities and
junior uranium developers. More than 15 million pounds of uranium has been purchased by these market players
so far in 2021. Of particular note is the recently established Sprott Physical Uranium Trust which already holds
approximately 19 million pounds of uranium and which is expected to simplify and expand investor ownership of
physical material going forward.
In contrast with the demand side of the industry, the COVID-19 pandemic has had a notable impact on global
uranium supply. Extended shut-downs at Cigar Lake in Canada alongside production cut-backs in Kazakhstan
combined to remove almost 28 million pounds from planned uranium production in FY2021.
During 2021 the market has also seen the permanent closure of long-standing operations in Australia (Ranger) and
Niger (Akouta), removing upwards of six million pounds per annum of primary uranium supply. Kazakhstan intends
to maintain a 20% reduction to production through 2023, reducing market supply by an additional 20 million
pounds in aggregate.
Production cut-backs have increased the rate of inventory drawdown by global nuclear utilities. Inventory levels
held by US and European utilities are at their lowest for several years and will continue to reduce in coming years.
Meanwhile forward uranium contracting has remained well below replacement levels, exacerbating future supply
imbalances. The normalisation of uranium contracting remains a key influence to a return to incentive prices
required for the resumption of production at the Langer Heinrich Mine.
Outlook
We are looking forward with confidence as we continue to progress the restart of our world class Langer Heinrich
Mine and assess growth opportunities within the company’s high-grade global exploration portfolio.
The Restart Plan highlighted that Langer Heinrich is competitively positioned versus other suspended uranium
mines and greenfield projects due to its low levels of restart capital and its low operating costs. With strong project
economics, we anticipate Langer Heinrich will be at the forefront of the next wave of uranium mines commissioned
to meet the structural shortage in uranium supply.
I would like to thank all our staff, contractors and consultants for their hard work and dedication over the year. I
would also like to thank the Board of Directors for their ongoing support and finally, I would like to thank our
shareholders for your continued support of the Company. The positive outlook for uranium markets and Paladin’s
opportunity to positively impact the decarbonisation of global electricity generation provides the platform for an
exciting year ahead.
Yours faithfully
Ian Purdy
Chief Executive Officer
Paladin Energy Ltd
7
Operating and Financial Review
OVERVIEW OF OPERATIONS
Paladin Energy Limited (ASX:PDN OTCQX:PALAF) is an Australian listed uranium company focused on maximising
the value of its 75% stake in the Langer Heinrich Uranium Mine (LHM) in Namibia. Langer Heinrich is a globally
significant, long-life operation, having already produced over 43Mlb U3O8 to date. Operations at Langer Heinrich
were suspended in 2018 due to low uranium prices.
Beyond Langer Heinrich, the Company also owns a large global portfolio of uranium exploration and development
assets. Nuclear power remains a cost-effective, low carbon option for electricity generation.
The Company is incorporated under the laws of Australia with a primary share market listing on the Australian
Securities Exchange (ASX) and the Namibian Stock Exchange (NSX). The Company also trades on the OTCQX market
in the United States of America and the Munich, Berlin, Stuttgart and Frankfurt markets.
HIGHLIGHTS
Health & Safety
• Paladin had no lost time injuries or reportable environmental incidents during FY2021
• Five employees at the Langer Heinrich Mine tested positive to COVID-19 during the year. These employees
have all recovered and returned to work
• The Company continued to maintain appropriate protocols across all locations to minimise the potential
transmission of COVID-19.
Operational Performance
• During the year, the Company continued to progress the critical-path elements of its plan to restart the globally
significant Langer Heinrich Mine, including:
-
optimisation of pit design, tailings management and mining schedules
-
-
high level project delivery schedule development
appointment of key contractors
• The Langer Heinrich Mine remained on care and maintenance during the year
• There were no production or development activities during the year.
Exploration
• During the year, the Company has undertaken the work required to meet minimum tenement commitments at
its exploration projects in Canada and Australia
• Under the terms of the Michelin Joint Venture Agreement, a mandatory transfer of 5% from Michelin Nominees
Ltd to Aurora Energy Ltd (a wholly owned subsidiary of the Company) was completed, increasing the Company’s
interest from 60% to 65%.
Corporate
• Ms Melissa Holzberger and Ms Joanne Palmer were appointed as independent non-executive directors of the
Company during FY2021
• Paladin further expanded the strength and breadth of its management team during the year with the
appointments of Mr Jonathon Clements (General Manager Projects and Development), Mr Jess Oram (General
Manager Exploration) and Mr Alex Rybak (General Manager Business Development & Marketing)
• An Equity Raise by way of a fully underwritten pro-rata accelerated non-renounceable entitlement offer and
institutional placement, raising A$218.7M, was completed during the year proceeds from the equity raise were
used to fully redeem the US$115M Senior Notes
• The reset of Paladin’s capital structure has cleared the Company’s corporate debt, providing capital flexibility
and a platform to maximise shareholder value upon expected improvements in the uranium market.
Paladin Energy Ltd
8
Operating and Financial Review (continued)
FINANCIAL PERFORMANCE
Key financial performance metric
Earnings
Average selling price
U3O8 sold
Revenue
Cost of sales
Net loss after tax from continuing operations
(Loss)/profit after tax from discontinued
operations
Cash Flows
Cash flows from operating activities
Capital expenditure
Free cash flows
Financial Position
Unrestricted cash and cash equivalents
Debt (principal amount + accrued interest)
Net debt
Total equity
Gearing ratio (Net debt / (net debt + equity))
US$/lb
Mlb
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
%
Earnings
Year ended 30 June
2021
2020
% Change
29.85
100,000
2,985
(2,973)
(58,258)
-
-
-
-
(46,051)
100
100
100
100
27
-
(46,401)
(100)
(5,565)
(3,261)
(8,826)
30,661
-
-
246,708
-
(11,478)
(4,346)
(15,824)
34,237
145,745
111,508
92,999
55
(52)
(25)
(44)
(10)
(100)
(100)
165
100
Net loss after tax from continuing operations increased by 27%, mainly as a result of foreign exchange losses of
US$3,934,000 (2020: foreign exchange gain US$8,279,000) which is predominantly due to the foreign exchange
translation of the environmental rehabilitation provision in Namibia. The Namibian dollar appreciated 17% during
the year, from US$1:N$17.2708 at 30 June 2020 to US$1:N$14.3121 at 30 June 2021.
Cash Flows
The Group had unrestricted cash and cash equivalents at 30 June 2021 of US$30,661,000.
Unrestricted cash and cash equivalents decreased by US$3,576,000 during the year comprising of the following
cash flows:
• Receipts from customers – proceeds from a spot sale of 100,000lb of uranium of US$2,985,000.
• Cost of sales – cost of sales relating to the spot sale of US$2,973,000.
• Placement and Entitlement Offer – net proceeds from issue of shares US$158,963,000.
• Redemption of Senior Secured Notes – repayment of US$115,000,000 senior secured notes plus redemption
premium and accrued interest of US$42,765,000.
•
Interest received & paid and other income – the Group received cash inflows of US$1,438,000, including
US$1,316,000 proceeds from the final settlement for litigation related to previous activities at the Kayelekera
Mine (not related to the sale to Lotus Resources Ltd).
• Proceeds from sale of Paladin (Africa) Ltd – the Group received US$1,000,000 from Lotus Resources Ltd: the
second tranche of repayment of funds advanced to provide security for the US$10,000,000 environmental
performance bond.
• Langer Heinrich expenditure – ongoing C&M, Langer Heinrich Mine utilised US$3,050,000 in cash flows from
operations.
• Langer Heinrich restart study costs – the Group incurred US$2,142,000 in restart study expenditure.
• Exploration expenditure – the Group utilised US$1,081,000 for minimum tenement commitments at its
exploration projects.
Paladin Energy Ltd
9
Operating and Financial Review (continued)
• Corporate expenditure – during the year US$3,764,000 was paid for corporate costs.
• Payments for property, plant and equipment – during the year US$38,000 was paid for property, plant and
equipment.
• Effect of movement in exchange rates on cash held – US$3,002,000 was predominantly due to an increase in
Australian dollars following the completion of the equity raising and held to cover corporate expenditure.
Financial Position
Unrestricted group cash and cash equivalents decreased by 10% to US$30,661,000. Debt decreased by 100%, from
US$145,745,000 at 30 June 2020 to Nil at 30 June 2021 as Paladin fully redeemed the US$115,000,000 Senior Notes
in April 2021. This resulted in the Company’s gearing ratio decreased from 55% at 30 June 2020 to Nil at 30 June
2021.
Paladin Energy Ltd
10
Ore Reserves and Mineral Resources
PROJECT LOCATIONS AND RESOURCE OVERVIEW
Unless specifically noted, Mineral Resources were prepared and first disclosed under the JORC Code 2004. These
estimates have not been updated since to comply with JORC Code (2012) on the basis that the information that
the estimates are derived from has not materially changed since it was last reported.
Paladin Energy Ltd
11
AustraliaCanadaNamibiaNewfoundlandand Labrador Happy ValleyGoose BayQuebecPostvilleSt JohnsCanadaMichelinAdvanced ExplorationKilometers0300NCarley BoreExplorationMount IsaPre-developmentNTQLDWASANSWVICTASManyingeeAdvancedExplorationPerthSydneyHobartAdelaideBrisbaneDarwinKilometers01,000NHead OfficePerth, WAKilometers0300NZimbabweNamibiaSouthAfricaAngolaBotswanaZambiaWindhoekWalvis BaySwakopmundLanger HeinrichMine on Care & Maintenance
Ore Reserves and Mineral Resources (continued)
NAMIBIA
Langer Heinrich
Langer Heinrich is located in central western Namibia approximately 80km east of Swakopmund. Langer Heinrich
is a surficial calcrete type uranium deposit containing a JORC Code (2012) compliant Mineral Resource of
119.7Mlb U3O8 at a grade of 445ppm U3O8 and 38.8Mlb V2O5 at grade of 145ppm V2O5 at a cut-off of grade of
250ppm U3O8. The deposit consists of seven mineralised zones designated Detail 1 to 7 along the length of the
Langer Heinrich valley within the 15km length of a contiguous paleo drainage system.
The Langer Heinrich Mine transitioned to care and maintenance in August 2018.
CANADA
Michelin Project
Paladin, through its wholly-owned subsidiary Aurora Energy Ltd (Aurora), holds rights to 52,250 hectares of mineral
claims within the Central Mineral Belt of Labrador (CMB), Canada, approximately 140km north of Happy Valley-
Goose Bay and 40km southwest of the community of Postville.
Paladin currently holds a 65% interest (increased from 60% in May 2020) in a special purpose joint venture
(Michelin Joint Venture) which owns the Michelin Project. The Michelin Joint Venture includes a farm out
agreement over a five year period whereby Paladin will receive an additional 5% participating interest in the
Michelin Project on an annual basis until May 2023 in return for Paladin funding all obligations for the Michelin
Project over this period.
The mineral claims cover a significant area of prospective ground over the CMB. The claims contain 105.6Mlb U3O8
Measured and Indicated Mineral Resources as well as an additional 22Mlb U3O8 Inferred Mineral Resource in six
deposits. The largest of these deposits is Michelin which contains a total JORC Code (2012) compliant Mineral
Resource of 92.0Mlb U3O8, 82.2Mlb of which is classified Measured and Indicated. Michelin is still open along strike
and at depth. Cut-off grades for all deposits except Jacques Lake reflect the use of open cut (200ppm) and
underground (500ppm) mining methodologies in the determination of prospects for eventual economic extraction.
For Jacques Lake, there was insufficient Mineral Resources remaining after pit optimisation studies to warrant any
portion being considered for underground mining.
QUEENSLAND
Mount Isa Project
The Mount Isa Project, which is wholly-owned by Paladin, is located 40km north of Mount Isa and consists of six
Mineral Development Licences.
The Mount Isa Project includes 10 deposits containing 106.2Mlb U3O8 Measured and Indicated Mineral Resources
as well as 42.2Mlb U3O8 Inferred Mineral Resources at a cut-off grade of 250ppm U3O8 for all deposits except
Valhalla which utilised a cut-off grade of 230ppm U3O8.
WESTERN AUSTRALIA
Manyingee Project
Manyingee is located in the north-west of Western Australia, 1,100km north of Perth and 85km inland from the
coastal township of Onslow. The property is comprised of three mining leases covering 1,307 hectares. Field trials
by AFMEX demonstrated that the Manyingee sandstone-hosted uranium deposit is amenable to extraction by in-
situ recovery (ISR) in 1985.
Manyingee contains an Indicated Mineral Resource of 15.7Mlb U3O8 grading 850ppm and an Inferred Mineral
Resource of 10.2Mlb U3O8 grading 850ppm (JORC Code (2012) compliant) at a cut-off grade of 250ppm U3O8.
Paladin Energy Ltd
12
Ore Reserves and Mineral Resources (continued)
Carley Bore
Carley Bore is located approximately 100km south of Manyingee in Western Australia. Carley Bore consists of two
contiguous exploration licences with granted retention status.
The Carley Bore deposit contains an JORC Code (2012) compliant Mineral Resources, 5.0Mlb U3O8 grading 420ppm
in the Indicated category and 10.6Mlb U3O8 grading 280ppm in the Inferred category at a cut-off grade of 150ppm
U3O8. Potential exists for extensions to mineralisation north and south of the estimated Carley Bore Mineral
Resource.
MINERAL RESOURCES AND ORE RESERVES SUMMARY
The following tables detail the Company’s Mineral Resources and Ore Reserves and the changes that have occurred
within FY2021. There were no material changes to the Company’s Mineral Resources and Ore Reserves.
Uranium Mineral Resources
30 June 2021
Grade
ppm
U3O8
Mlb
U3O8
Mt
30 June 2020
Grade
ppm
U3O8
Mlb
U3O8
Mt
Change
Mlb
U3O8
Mt
Langer Heinrich1
Namibia
Measured
In-situ
MG ROM stockpiles
Lg ROM stockpiles
Total Measured
Indicated
In-situ
Inferred
In-situ
Stockpiles
66.2
4.7
26.1
97.0
490
520
325
445
71.9
5.4
18.7
95.9
66.2
4.7
26.1
97.0
490
520
325
445
71.9
5.4
18.7
95.9
18.8
435
18.0
18.8
435
18.0
6.3
-
420
-
5.8
-
6.3
-
420
-
5.8
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 JORC Code (2012) compliant
Paladin Energy Ltd
13
Ore Reserves and Mineral Resources (continued)
Uranium Mineral Resources
30 June 2021
Grade
ppm
U3O8
Mlb
U3O8
Mt
30 June 2020
Grade
ppm
U3O8
Mlb
U3O8
Mt
Change
Mlb
U3O8
Mt
Canada
Measured
Indicated
Inferred
Australia
Measured
Indicated
Inferred
Michelin1
Rainbow
Gear
Inda
Jacques Lake1
Michelin
Nash
Rainbow
Gear
Inda
Jacques Lake1
Michelin1
Nash
Rainbow
Valhalla
Andersons
Bikini
Duke Batman
Odin
Skal
Valhalla
Carley Bore1
Manyingee1
Andersons
Bikini
Duke Batman
Honey Pot
Mirrioola
Odin
Skal
Valhalla
Watta
Warwai
Carley Bore1
Manyingee
17.6
0.2
0.4
1.2
13.0
20.6
0.7
0.8
0.3
3.3
3.6
4.5
0.5
0.9
16.0
1.4
5.8
0.5
8.2
14.3
18.6
5.4
8.4
0.1
6.7
0.3
2.6
2.0
5.8
1.4
9.1
5.6
0.4
17.4
5.4
965
920
770
690
630
980
830
860
920
670
550
985
720
810
820
1,450
495
1,370
555
640
840
420
850
1,640
490
1,100
700
560
590
520
640
400
360
280
850
37.6
0.4
0.6
1.8
18.0
44.6
1.2
1.4
0.6
4.8
4.4
9.9
0.8
1.6
28.9
4.6
6.3
1.6
10.0
20.2
34.5
5.0
15.7
0.4
7.3
0.7
4.0
2.5
7.6
1.6
12.8
5.0
0.3
10.6
10.2
17.6
0.2
0.4
1.2
13.0
20.6
0.7
0.8
0.3
3.3
3.6
4.5
0.5
0.9
16.0
1.4
5.8
0.5
8.2
14.3
18.6
5.4
8.4
0.1
6.7
0.3
2.6
2.0
5.8
1.4
9.1
5.6
0.4
17.4
5.4
965
920
770
690
630
980
830
860
920
670
550
985
720
810
820
1,450
495
1,370
555
640
840
420
850
1,640
490
1,100
700
560
590
520
640
400
360
280
850
37.6
0.4
0.6
1.8
18.0
44.6
1.2
1.4
0.6
4.8
4.4
9.9
0.8
1.6
28.9
4.6
6.3
1.6
10.0
20.2
34.5
5.0
15.7
0.4
7.3
0.7
4.0
2.5
7.6
1.6
12.8
5.0
0.3
10.6
10.2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 JORC Code (2012) compliant
Paladin Energy Ltd
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14
Ore Reserves and Mineral Resources (continued)
Vanadium Mineral Resources
30 June 2021
Grade
ppm
V2O5
Mlb
V2O5
Mt
30 June 2020
Grade
ppm
V2O5
Mlb
V2O5
Mt
Change
Mlb
V2O5
Mt
Langer Heinrich1
Namibia
Measured
In-situ
MG ROM stockpiles
LG ROM stockpiles
Total Measured
Indicated
In-situ
Inferred
In-situ
66.2
4.7
26.1
97.0
160
170
105
145
23.3
1.8
6.0
31.1
66.2
4.7
26.1
97.0
160
170
105
145
23.3
1.8
6.0
31.1
18.8
140
5.8
18.8
140
5.8
6.3
135
1.9
6.3
135
1.9
-
-
-
-
-
-
-
-
-
-
-
-
Uranium Ore Reserves
Langer Heinrich1
Namibia
Proven
Probable
Stockpiles
30 June 2021
Grade
ppm
U3O8
Mlb
U3O8
Mt
30 June 2020
Grade
ppm
U3O8
Mlb
U3O8
Mt
Change
Mlb
U3O8
Mt
42.0
13.1
30.8
525
485
355
48.5
14.0
24.0
42.0
13.1
30.8
525
485
355
48.5
14.0
24.0
-
-
-
-
-
-
Figures may not add due to rounding. Mineral Resources and Ore Reserves quoted on a 100% basis.
All the Company’s Mineral Resources and Ore Reserves are internally peer reviewed at the time of estimation and
are subject to ongoing review, as and when required. Should any Mineral Resources or Ore Reserves be utilised
within a Bankable or Definitive Feasibility Study, it is expected that an audit by independent experts would be
conducted.
The information above relating to exploration, Mineral Resources and ore reserves is, except where stated, based
on information compiled by David Princep B.Sc P.Geo FAusIMM(CP) who is an independent consultant and who is a
member of the AusIMM. Mr Princep has sufficient experience that is relevant to the style of mineralisation and type
of deposit under consideration and to the activity that he/she is undertaking to qualify as Competent Person as
defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves”. Mr Princep consents to the inclusion of this information in the form and context in which it appears.
1 JORC Code (2012) compliant
Paladin Energy Ltd
15
Health and Safety / Sustainable Development
SUSTAINABILITY
Paladin is committed to the core principle of delivering value through sustainable development.
Our Paladin Values, Integrity, Respect, Courage and Community, support every decision we take, and we
proactively uphold key operating responsibilities to ensure we are considered and transparent in all we do.
With these strong foundations, we can focus on achieving economic, social and environmental sustainability in
balanced and successful ways for all stakeholders. Paladin recognises it has a key role to play in reducing global
carbon emissions as a fuel supplier to the Nuclear Power industry.
During FY2020 the Company restated its Sustainability Commitments:
Health, Safety and Wellbeing
We put the health, safety and wellbeing of our workforce and all stakeholders at the forefront, with a positive
culture of safety that underpins all our decisions and actions.
People and Opportunity
We value and respect all our people as central to what we do, embracing diversity and promoting equal
opportunities to thrive and be recognised.
Community and Social Investment
We engage positively with local communities, actively listening and contributing to their social prosperity and
development with integrity.
Environmental Stewardship
We protect the environment and work to minimise our impacts on it, achieving continuous improvements in
sustainability practices and committing to support emission reductions to achieve the goals of the Paris Agreement
on climate change.
A copy of Paladin’s 2020 Sustainability Report can be found on the Company’s website paladinenergy.com.au. The
Company will release its 2021 Sustainability Report in October 2021.
Paladin Energy Ltd
16
Corporate Governance Statement
CORPORATE GOVERNANCE FRAMEWORK
The Board of directors of Paladin Energy Ltd recognises the importance of its corporate governance framework in
establishing accountabilities, guiding and regulating activities, monitoring and managing risks and optimising
Paladin’s performance. Paladin, as a listed entity, must comply with the Corporations Act 2001 (Cth), Australian
Securities Exchange Listing Rules (ASX LR) and other Australian and international laws.
Paladin reviews and amends its corporate governance policies as appropriate to reflect the growth of the Company,
current legislation and best practice. Paladin’s website www.paladinenergy.com.au includes copies or summaries
of key corporate governance policy documents. The website also contains copies of all Board and Committee
Charters.
Paladin’s Corporate Governance Statement, dated 30 June 2021 and approved by the Board on 26 August 2021,
outlines the key governance principles and practices of the Company which, taken as a whole, sets out the
Company’s governance framework. In accordance with ASX Listing Rule 4.10.03 the Corporate Governance
Statement is aligned with the fourth edition Corporate Governance Principals and Recommendations published by
the ASX Corporate Governance Council in February 2019. Paladin’s Corporate Governance Statement can be found
in the Corporate Governance section of the Investor Centre on its website at www.paladinenergy.com.au, along
with the ASX Appendix 4G, a checklist cross-referencing the ASX Principles and Recommendations to disclosures in
this statement and the current Annual Financial Report. The Corporate Governance Statement, together with the
Appendix 4G, has been lodged with the ASX.
Paladin Energy Ltd
17
Directors’ Report
The Directors of Paladin Energy Ltd present their report together with the financial report of the Group consisting
of Paladin Energy Ltd and the entities it controlled at the end of, or during, the year ended 30 June 2021 and the
auditor’s report.
During the year, Paladin appointed two new non-executive directors to provide additional experience and resources
in order to maintain the highest standards of governance. The Company has previously announced the following
changes to the Board of Directors:
• Ms Melissa Holzberger appointed Non-Executive Director (13 May 2021)
• Ms Joanne Palmer appointed Non-Executive Director (13 May 2021)
Ms Holzberger has extensive executive and non-executive experience in legal, governance and compliance roles and
Ms Palmer has experience within audit and financial services which will broaden the Board’s experience and
expertise.
DIRECTORS
The following persons were Directors of Paladin Energy Ltd and were in office for the period stated:
Mr Cliff Lawrenson B.Com (Hons)
(Non-Executive Chairman)
Mr Lawrenson is an experienced non-executive director having served on or chaired public and private companies
for over 15 years after a successful career in executive leadership, including in investment banking. Mr Lawrenson
holds postgraduate qualifications in commerce and finance and has worked extensively in the resources and energy
sectors, across the world. He has a successful track record of leading strategic direction in companies and executing
complex corporate transactions.
Special Responsibilities
Member of Audit & Risk Committee
Chairman of Remuneration, Nomination & Governance Committee
Current listed company Directorships: Australian Vanadium Limited, Caspin Resources Ltd and Canyon Resources Ltd
Former listed company Directorships (last three years): Atlas Iron Limited
Mr Peter Watson B Eng (Hons), FIEAust, GAICD, RPEQ
(Non-Executive Director)
Mr Peter Watson is a chemical engineer with more than 35 years’ experience in the global resources sector across
senior technical, project, and management roles as well as corporate experience in running ASX listed companies.
His experience includes project development, project delivery, asset optimisation and mining facilities operations
across multiple commodities and global jurisdictions, including Africa. Mr Watson has held technical and senior
executive roles with a number of companies, culminating in his appointment as the MD & CEO of Sedgman Limited.
Mr Watson has also held a number of senior and directorship roles at Strandline Resources Ltd, Sedgman Limited,
New Century Resources, Resource Generation and EvacGroup (private), bringing significant board level experience
at both the public and wholly owned company level, particularly on matters covering project development and
delivery, operations re-start, safety, governance, financial reporting, risk management, strategy and leadership.
Special Responsibilities
Member of Audit & Risk Committee
Member of Remuneration, Nomination & Governance Committee
Chairman of Technical & Sustainability Committee
Current listed company Directorships: Strandline Resources Ltd and New Century Resources Ltd.
Former listed company Directorships (last three years): Resource Generation Ltd and Evacuation Services Australia
Pty Limited
Paladin Energy Ltd
18
Directors’ Report (continued)
Mr Peter Main B Bus.
(Non-Executive Director)
Mr Peter Main is a mining and finance professional with extensive experience spanning more than 30 years. During
that time, Mr Main has developed an extensive working knowledge in financial markets centred around the mining
sector developing a wealth of industry experience. During his career Mr Main has spent 13 years in a variety of roles
in the mining industry through to CEO in the later years of a TSX-V listed mining company, obtaining diverse
experience across most facets of the industry. He spent 20 years in finance, more recently in an advisory capacity
to the mining and finance industries. Mr Main primarily worked for investment banks, including 11 years managing
the Royal Bank of Canada's (RBC) Australian equity sales and trading business and co-managing RBC's regional
business. Prior to that Mr Main spent six years at Hartley Poynton as a mining analyst and almost nine years full
time service in the Australian Army.
Special Responsibilities
Chairman of Audit & Risk Committee
Member of Remuneration, Nomination & Governance Committee
Current listed company Directorships: Carbine Resources Limited
Former listed company Directorships (last three years): Rizal Resources
Ms Melissa Holzberger LLM Resources Law (Distinction) (Scotland), Dip. International Nuclear Law (Hons) (France),
LLB (Adel), BA (Adel), GDLP, FGIA, GAICD (appointed 13 May 2021)
(Non-Executive Director)
Ms Melissa Holzberger is a commercial and mining lawyer with over 20 years’ experience in the energy and resources
sector, including the uranium industry. She is an experienced company director having served on ASX-listed, public,
government and not-for-profit boards spanning a wide range of sectors. She brings legal, risk, compliance, corporate
ethics and corporate governance expertise, together with valuable experience in uranium mining operations and
projects, international trade, logistics, product stewardship and sustainability having previously worked for both BHP
and Rio Tinto. Ms Holzberger is a member of the Federal Government’s Australian Radiation Protection and Nuclear
Safety Agency’s Radiation Health and Safety Advisory Council and founding Principal of Sloan Holzberger Lawyers.
Current listed company Directorships: Silex Systems Limited
Ms Joanne Palmer RCA, FCA (ICAEW), FCA (ICAA), GAICD, BSc Hons Mathematics & Statistics (appointed 13 May
2021)
(Non-Executive Director)
Ms Joanne Palmer is a Registered Company Auditor and a Fellow of Chartered Accountants in Australia, England and
Wales. Ms Palmer is currently an Executive Director of Pitcher Partners in Perth. Ms Palmer brings over 25 years of
industry experience providing audit and assurance services on company listings, mergers, acquisitions and takeovers
and significant experience in auditing international mining companies. Ms Palmer is a council member of the
Association of Mining & Exploration Companies (AMEC).
Ms Palmer has had an extensive financial services career including leading Ernst and Young’s Financial Accounting
Advisory Services team in Perth, working predominantly in the mining sector assisting both multinational companies,
mid-caps and junior explorers with technical accounting, regulatory advice and finance function support services.
Current listed company Directorships: None
CHIEF EXECUTIVE OFFICER
Mr Ian Purdy BCom, FCA, FAICD
(Chief Executive Officer)
Mr Purdy is a highly respected executive with more than three decades’ experience within Australian and
international natural resources companies. In his time as a CEO and CFO of listed and private companies, Mr Purdy
has delivered significant shareholder value through managing and optimising operations, delivering large projects
and executing on business improvements and asset sales. He also has extensive capital markets experience and a
proven track record of delivering company funding requirements.
Mr Purdy was previously the CFO of Quadrant Energy, Managing Director and CEO of Mirabela Nickel Limited,
Managing Director of Norilsk Nickel Australia, Director of Finance and Strategy of LionOre Australia, and has held
senior finance and commercial roles at North Limited and WMC Limited.
Paladin Energy Ltd
19
Directors’ Report (continued)
COMPANY SECRETARY
Mr Nathan Bartrop BCom, LLB, FGIA, FCG (appointed 26 February 2021)
(Company Secretary)
Mr Bartrop is a corporate governance professional (Chartered Secretary) with over 10 years’ experience in ASX
Listing Rules compliance, corporate advisory and corporate governance.
Mr Bartrop has assisted numerous listed and dual listed entities across a wide range of industries as Company
Secretary. During his career Mr Bartrop has also worked as an ASX listings compliance adviser at ASX in Perth and
Sydney, where he was actively involved in the new listing of companies on the ASX and advising listed entities on
their compliance with ASX listing rules. He is a Fellow and WA State Council member of the Governance Institute of
Australia.
Ms Andrea Betti CA, AGIA, BCom, MBA (resigned 26 February 2021)
(Joint Company Secretary)
Ms Betti is an accounting and corporate governance professional with over 20 years’ experience in accounting,
corporate governance, corporate advisory, finance and corporate banking. Ms Betti has acted as Chief Financial
Officer and Company Secretary for companies in the private and publicly listed sectors, as well as senior executive
roles in the banking and finance industry.
Mr Ranko Matic (resigned 26 February 2021)
(Joint Company Secretary)
Mr Matic is a Chartered Accountant with over 25 years’ experience in the areas of financial and executive
management, accounting, audit, business and corporate advisory. Mr Matic serves as a Non-Executive Director and
Company Secretary for a number of publicly listed natural resources companies.
BOARD AND COMMITTEE MEETINGS
The number of Directors’ meetings and meetings of committees held during the financial year, and the number of
meetings attended by each Director in the period they held office were:
Board of
Directors
Audit and Risk
Committee
Technical &
Sustainability1
Remuneration,
Nomination &
Governance
Committee
Name
Mr Cliff Lawrenson
Mr Peter Watson
Mr Peter Main
Ms Melissa Holzberger
Ms Joanne Palmer
Number
attended
6
6
6
1
1
Number
eligible
to attend
6
6
6
1
1
Number
attended
4
4
4
12
12
Number
eligible
to attend
Number
attended
Number
eligible
to attend
Number
attended
Number
eligible
to attend
4
4
4
1
1
22
4
22
12
12
4
4
4
1
1
2
2
2
-
-
2
2
2
-
-
1 Committee changed its name to Technical & Sustainability in February 2021
2 Indicates that a Director attended some or all meetings by invitation whilst not being a member of a specific
committee
Paladin Energy Ltd
20
Directors’ Report (continued)
PRINCIPAL ACTIVITY
The principal activity of the Group was the development and operation of the Langer Heinrich Mine in Namibia,
together with exploration and evaluation activities in Australia and Canada.
REVIEW AND RESULTS OF OPERATIONS
A detailed operational and financial review of the Group is set out on pages 8 to 10 of this report under the section
entitled Operating and Financial Review.
The Group’s loss after tax from continuing operations for the year is US$58,258,000 (2020: loss after tax
US$46,051,000) representing an increase of 27% from the previous year.
DIVIDENDS
No dividend has been paid during the financial year and no dividend is recommended for the current year.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Significant changes in the state of affairs of the Group during the financial year were as follows:
Capital Raising
In April 2021, Paladin successfully completed an equity raise by way of a fully underwritten pro-rata accelerated
non-renounceable entitlement offer and institutional placement, to raise A$218.7M. The fully underwritten
A$218.7M equity raise comprised:
• An institutional placement of 347.3M new fully paid ordinary shares in Paladin to raise A$128.5M (Placement);
and
• A 1 for 8.5 pro-rata accelerated non-renounceable entitlement offer of 243.7M new shares to raise A$90.2M
(Entitlement Offer)
All new shares were issued at a price of A$0.37 per new share under the equity raise.
Cancellation of Senior Secured Notes
On 12 May 2021, Paladin completed the cancellation of all the US$115M Senior Notes that were repayable in January
2023.
Commenced trading on U.S. based OTCQX Market
On 2 June 2021, Paladin commenced trading on the OTCQX market. The OTCQX is the top market tier operated by
OTC Market Group, Inc. in New York, on which over 11,000 U.S. and global securities trade. This allows for greater
access to retail and small institutional investors, with investors being able to trade and settle in U.S. hours and U.S.
dollars, allowing for greater visibility and accessibility of the Company.
APPOINTMENT OF NEW NON-EXECUTIVE DIRECTORS
On 13 May 2021, Paladin appointed Ms Melissa Holzberger and Ms Joanne Palmer as Non-Executive Directors.
APPOINTMENT OF THREE NEW EXECUTIVES
On 12 October 2020 Mr Jonathon Clements was appointed General Manager Projects and Development. On 28 June
2021, Paladin announced the appointed Mr Jess Oram as General Manager Exploration and Mr Alex Rybak as General
Manager Business Development & Marketing effective from 19 July 2021.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
Since the end of the financial year, the Directors are not aware of any other matter or circumstance not otherwise
dealt with in this report, that has significantly or may significantly affect the operations of the Group, the results of
those operations or the state of affairs of the Group in subsequent periods.
Paladin Energy Ltd
21
Directors’ Report (continued)
LIKELY DEVELOPMENTS
Likely developments in the operations of the Group are set out under the section entitled Operating and Financial
Review.
ENVIRONMENTAL REGULATIONS
The Group is subject to environmental regulation in respect to its exploration, evaluation, development and
operational activities for uranium projects under the laws of the countries in which its activities are conducted. The
Group currently has a mining and processing operation in Namibia (on care and maintenance due to current uranium
market conditions), as well as exploration projects in Australia, and Canada. The Group’s Policy is to ensure
compliance with all applicable environmental laws and regulations in the countries in which it conducts business.
Specific environmental regulations, approvals and licenses for the exploration, development and operation are
required to conduct the activities at each site. In addition, many other international and industry standards are also
applied to the Group’s activities, including those specified for the global uranium industry. These environmental
laws, regulations and standards relate to environmental factors such as radiation, water, flora, fauna, air quality,
noise, waste management and pollution control.
The Directors are not aware of any environmental matters which would have a significant adverse effect on the
Group.
REMUNERATION FOR THE YEAR AT A GLANCE
Executive Remuneration – cash value of earnings realised (unaudited)
Details of the remuneration received by the Key Management Personnel (KMP) are prepared in accordance with
statutory requirements and Accounting Standards and are detailed further in the Remuneration Report.
In keeping with Paladin’s practice since 2011, the tables below set out the cash value of earnings realised by the CEO
and other executives considered to represent KMP for FY2020 and FY2021 and the intrinsic value of share-based
payments that vested to KMP during the period. In FY2021 shares issued upon the vesting of Performance Rights
during the year are subject to a 12-month voluntary escrow with a holding lock in place from the date of issue and
have therefore not been disclosed in the tables below. This voluntary disclosure is in addition and different to the
disclosures required by the Corporations Act and Accounting Standards, particularly in relation to performance and
share rights. As a general principle, the Accounting Standards require a value to be placed on performance and
share rights based on probabilistic calculations at the time of grant, which may be reflected in the remuneration
report even if ultimately the rights do not vest because vesting conditions are not met. By contrast, this table
discloses the intrinsic value of rights, which represents only those rights which actually vested and resulted in shares
issued to a KMP. The intrinsic value is Paladin’s closing share price on the date of vesting.
Paladin believes that this additional information is useful to investors as recognised by the 2009 Productivity
Commission Inquiry Report ‘Executive Remuneration in Australia’. The Commission recommended that
remuneration reports should include actual levels of remuneration received by the individuals named in the report
in order to increase its usefulness to investors.
The cash value of earnings realised include cash salary and fees, superannuation, cash bonuses and other benefits
received in cash during the year and the intrinsic value of long-term incentives vesting during FY2021. The tables do
not include the accounting value for performance rights and share appreciation rights granted in the current and
prior years, as this value may or may not be realised as they are dependent on the achievement of certain
performance hurdles. The accounting value of other long-term benefits which were not received in cash during the
year have also been excluded.
The Company is undergoing a comprehensive review of its executive remuneration policy and practice which is
being conducted by an independent remuneration specialist. The review is centred on strengthening the
alignment between variable remuneration outcomes and the shareholder experience. The focus of the review is to
better ensure that the Company’s executive remuneration structure is adaptable and more directly aligns to and
supports the company’s business strategy and goals.
Paladin Energy Ltd
22
Directors’ Report (continued)
REMUNERATION FOR THE YEAR AT A GLANCE (CONTINUED)
Executive Remuneration - cash value of earnings realised (unaudited) (continued)
All cash remuneration is paid in Australian dollars to those parties listed below, therefore the tables are presented
in both A$ and US$ (being the functional and presentation currency of Paladin). The detailed schedules of
remuneration presented later in this report are presented in US$.
2021 (A$) / (US$)
Name
Mr Ian Purdy
Ms Anna Sudlow
Mr Jonathon Clements1
Mr Michael Drake2
Base Salary &
Superannuation
A$
521,694
320,000
232,399
44,366
US$
389,219
238,742
173,386
33,100
Total
1,118,459
834,447
Other
A$
-
2,286
-
-
2,286
Total
Cash
A$
521,694
322,286
232,399
44,366
US$
389,219
240,448
173,386
33,100
US$
-
1,706
-
-
1,706
1,120,745
836,153
Refer to the Compensation of KMP table later in the Remuneration Report for audited information required in
accordance with the Corporations Act 2001 and its Regulations.
Exchange rate used is average for 2021 financial year US$1 = A$1.34036.
Shares issued upon the vesting of Performance Rights during the year are subject to a 12-month voluntary escrow
with a holding lock in place from the date of issue and have therefore not been disclosed in the table above.
2020 (A$) / (US$)
Name
Mr Ian Purdy3
Ms Anna Sudlow
Mr Scott Sullivan4
Mr Michael Drake6
Mr Craig Barnes7
Base Salary &
Superannuation
Other
A$
214,649
320,124
310,847
363,207
151,356
US$
143,969
214,713
208,491
243,609
101,517
A$
-
-
266,0565
159,9195
-
US$
-
-
178,4485
107,2615
-
Total
Cash
A$
214,649
320,124
576,903
523,126
151,356
US$
143,969
214,713
386,939
350,870
101,517
Total
1,360,183
912,299
425,975
285,709
1,786,158
1,198,008
Refer to the Compensation of Key Management Personnel table later in the Remuneration Report for audited
information required in accordance with the Corporations Act 2001 and its Regulations.
Exchange rate used is average for 2020 financial year US$1 = A$1.49094.
1 Appointed 12 October 2020.
2 Resigned 3 July 2020
3 Appointed 4 February 2020.
4 Ceased employment 3 March 2020
5 Ex gratia termination payment plus payment in lieu of notice.
6 Resigned 3 July 2020
7 Resigned 9 August 2019
Paladin Energy Ltd
23
Directors’ Report (continued)
REMUNERATION REPORT (AUDITED)
This Remuneration Report outlines the Director and Executive remuneration arrangements of the Company and the
Group in accordance with the requirements of the Corporations Act 2001 (Cth) and its Regulations. For the purposes
of this report, KMP of the Group are defined as those persons having authority and responsibility for planning,
directing and controlling the major activities of the Group, directly or indirectly, including any Director, whether
executive or otherwise, of the parent company.
Over the year, Paladin made significant changes to its Board and Executive Management Team to provide the
technical and commercial skill set necessary to lead the Company going forward. The decision to restructure the
board was made following discussions with and feedback received from shareholders.
Key Management Personnel comprise:
• Mr Cliff Lawrenson, Non-Executive Chairman
• Mr Peter Watson, Non-Executive Director
• Mr Peter Main, Non-Executive Director
• Ms Melissa Holzberger, Non-Executive Director (appointed 13 May 2021)
• Ms Joanne Palmer, Non-Executive Director (appointed 13 May 2021)
• Mr Ian Purdy, Chief Executive Officer
• Ms Anna Sudlow, Chief Financial Officer
• Mr Jonathon Clements, General Manager – Projects & Development (appointed 12 October 2020)
• Mr Michael Drake, Chief Operating Officer (resigned 3 July 2020)
For the purposes of this report, the term Executive encompasses the CEO and senior executives of the Group.
REMUNERATION APPROVAL PROCESS
The Remuneration, Nomination and Governance Committee is charged with assisting the Board by reviewing and
it makes
making appropriate recommendations on remuneration packages for the KMP.
recommendations on long-term incentive plans and associated performance hurdles together with the quantum of
grants made, taking into account both the individual’s and Paladin’s performance.
In addition,
The Remuneration, Nomination & Governance Committee, chaired by Mr Cliff Lawrenson, held two meetings during
the year. Messrs Watson and Main are also Committee members. The CEO is invited to attend those meetings
which consider the remuneration strategy of the Group and recommendations in relation to KMP.
The Committee approves the quantum of any short-term incentive bonus pool and the total number of any long-
term incentive grants to be made and recommends the same for approval by the Board. The remuneration for the
CEO is determined by the Remuneration, Nomination & Governance Committee.
KEY ELEMENTS OF KEY MANAGEMENT PERSONNEL REMUNERATION STRATEGY
The overall focus of Paladin’s remuneration strategy is to:
• Provide competitive and fair reward;
• Be flexible and responsive in line with market expectations;
• Align executive interests with those of Paladin’s shareholders; and
• Comply with applicable legal requirements and appropriate standards of governance.
The above strategies also recognise the financial position of the Group given the low prevailing uranium prices. This
strategy applies group wide for all employees.
The overall level of compensation takes into account Paladin’s earnings and growth in shareholder wealth, together
with the achievement of strategic goals but must also reflect current economic conditions. Consideration of
Paladin’s earnings will be more relevant as Paladin moves from care and maintenance, to restart and profitability,
which is highly dependent on prevailing uranium prices.
Paladin Energy Ltd
24
Directors’ Report (continued)
REMUNERATION REPORT (AUDITED) (CONTINUED)
KEY ELEMENTS OF KEY MANAGEMENT PERSONNEL REMUNERATION STRATEGY (CONTINUED)
The Board is cognisant of general shareholder preference that long-term equity-based remuneration be linked to
Paladin’s performance and growth in shareholder value. Performance and Share Appreciation Rights (PRs and SARs)
issued under the Long-Term Incentive (LTI) programme usually have a one to three-year performance period. These
will therefore only vest at the end of a one to three-year period. This promotes a focus on long-term performance
as the value of the PRs or SARs is linked to the ongoing performance of Paladin. This period represents an
appropriate balance between providing a genuine and foreseeable incentive to KMP and fostering a long-term
alignment to shareholder interests. If a KMP resigns during this period, they will ordinarily forfeit their PRs and SARs.
The table below compares the earnings per share to the closing share price for Paladin's five most recently
completed financial years.
30 June
2017
30 June
2018
30 June
2019
30 June
2020
30 June
2021
(Loss)/profit for the year attributable to
members of the parent (US$’000)
EPS continuing operations (US cents)
Share Price (A$)
Increase/(decrease) in share price
Dividend payment (US$’000)
(457,785)
(26.7)
A$0.0471
367,762
21.5
A$0.175
(30,345)
(1.7)
A$0.125
(75)%
-
272%
-
(29)%
-
(79,866)
(1.7)
A$0.10
(20)%
-
(43,983)
(2.0)
A$0.515
415%
-
The remuneration structure for the Key Management Personnel has two elements:
• Fixed remuneration; and
• Long-term incentives.
COMPONENTS OF KEY MANAGEMENT PERSONNEL REMUNERATION
These are detailed as follows:
Remuneration Component
Elements
Details
Fixed Remuneration
Annual base salary determined as
at 1 July each year
The ‘not at risk’ cash component which
sacrifice
may
packaging.
include certain
salary
Statutory superannuation
contributions
Statutory % of base salary.
Variable Performance Linked
Remuneration
(“at risk” remuneration)
Long-term
under the Rights Plan
incentive,
granted
and
Award determined based on individual
performance
and
Paladin’s performance. Vesting dependent
on creation of shareholder value together
with a retention element.
contribution
Fixed Remuneration
This is reviewed annually with consideration given to both Paladin’s and the individual’s performance and
effectiveness. Market data, focused on the mining industry, is analysed with a focus on maintaining parity or above
with companies of similar complexity and size operating in the resources sector and becoming an employer of choice.
Paladin did not engage remuneration consultants during the year.
1 The securities of Paladin were suspended from official quotation, at the request of Paladin, on 13 June 2017 and
were reinstated on 16 February 2018.
Paladin Energy Ltd
25
Directors’ Report (continued)
REMUNERATION REPORT (AUDITED) (CONTINUED)
COMPONENTS OF KEY MANAGEMENT PERSONNEL REMUNERATION (CONTINUED)
Variable Performance Linked Remuneration
Long-Term Incentives
Paladin believes that encouraging its KMPs to become shareholders is the best way of aligning their interests with
those of its shareholders. In 2009, Paladin implemented an Employee Performance Share Rights Plan (the 2009
Employee Share Rights Plan) together with a Contractor Performance Share Rights Plan (the Contractor Rights Plan).
These plans are referred to jointly as the Rights Plans and were reaffirmed by shareholders at the 2018 Annual
General Meeting. The Plan terms were amended at the 2020 Annual General Meeting (2020 Employee Share Rights
Plan).
The Rights Plans are long-term incentive plans aimed at advancing the interests of Paladin by creating a stronger link
between employee performance and reward and increasing shareholder value by enabling participants to have a
greater involvement with, and share in, the future growth and profitability of Paladin. They are an important tool in
assisting to attract and retain talented people.
Performance Rights (PRs)
PRs were issued to the CEO, CFO, GM – Projects & Development and Non-Executive Directors under the 2009
Employee Share Rights Plan in order to provide an equity based component to their respective remuneration
packages.
Each PR that vests will automatically entitle the holder to be issued with one share.
The PRs have been issued for nil cash consideration and no consideration is payable by the holder upon the vesting
of a PR. The holder of any Shares issued on the vesting of the PRs will generally be restricted from selling, transferring
or otherwise disposing of the Shares for a period ending 12 months after the date that the relevant vesting condition
was satisfied. The PRs vesting hurdles were A$0.20, A$0.30, A$0.40 and A$0.50.
Any PRs that have not vested on or before the date that is five years after the date of the issue will automatically
lapse and become incapable of vesting into Shares.
The number of performance rights able to be issued under the Plans is limited to 5% of the issued capital.
A summary of PRs held by KMPs is on page 27.
Share Appreciation Rights (SARs)
SARs were granted under the 2009 Employee Share Rights Plan for no consideration. SARs are a right to receive a
bonus equal to the appreciation in Paladin's share price over a period. SARs benefit the holder with an increase in
share price; the holder is not required to pay the exercise price, but rather just receives the amount of the value
increase in shares. The number of ordinary shares ultimately issuable upon vesting of the SARs will vary as the
number of ordinary shares to be issued is based upon Paladin’s relative share price growth over the relevant vesting
periods.
The number of share rights able to be issued under the Plans is limited to 5% of the issued capital. The 5% limit
includes incentive grants under all plans made in the previous five years (with certain exclusions under the Australian
corporate legislation).
Paladin does not offer any loan facilities to KMPs.
A summary of SARs held by KMPs is on page 27.
Paladin Energy Ltd
26
Directors’ Report (continued)
REMUNERATION REPORT (AUDITED) (CONTINUED)
COMPONENTS OF KEY MANAGEMENT PERSONNEL REMUNERATION (CONTINUED)
Variable Performance Linked Remuneration (continued)
Shares Acquired Under the Rights Plan
Shares to be allocated to participants on vesting are currently issued from equity. No consideration is paid on the
vesting of the share rights and resultant shares carry full dividend and voting rights.
Change of Control
The Board has the discretion to vest PR and SARS issued under the 2009 Employee Share Rights Plan upon a change
of control event. In exercising any such discretion the Board may take into account the number of SARs to be vested
upon a change of control relative to the total shares on issue.
Cessation of Employment
Under the 2009 Employee Share Rights Plan, all PRs and SARs that have not vested will be forfeited on cessation of
employment, unless special circumstances exist such as retirement, total and permanent disability, redundancy or
death.
Performance Rights of KMPs (excluding Non-Executive Directors) at 30 June 2021 - Nil
All Performance Rights granted to KMPs vested during the year.
Performance Rights of KMPs (excluding Non-Executive Directors) at 30 June 2020
Date granted
5 February 2020
5 February 2020
5 February 2020
5 February 2020
30 April 2020
30 April 2020
30 April 2020
30 April 2020
Total
Expiry date
5 February 2025
5 February 2025
5 February 2025
5 February 2025
12 June 2025
12 June 2025
12 June 2025
12 June 2025
Fair value
A$0.038
A$0.038
A$0.038
A$0.038
A$0.05
A$0.05
A$0.05
A$0.05
Vesting price
A$0.20
A$0.30
A$0.40
A$0.50
A$0.20
A$0.30
A$0.40
A$0.50
Number
6,250,000
6,250,000
6,250,000
6,250,000
2,500,000
2,500,000
2,500,000
2,500,000
35,000,000
Share Appreciation Rights of KMPs (excluding Non-Executive Directors) at 30 June 2021
Date granted
Exercisable date
Expiry date
Fair value
1 July 2019
1 July 2019
1 July 2019
Total
1 July 2020
1 July 2021
1 July 2022
1 July 2025
1 July 2026
1 July 2027
A$0.05
A$0.06
A$0.07
Exercise
price
A$0.1226
A$0.1226
A$0.1226
Number
700,000
700,000
1,100,000
2,500,000
In summary, this balance represents 0.09% of the issued capital.
Share Appreciation Rights of KMPs (excluding Non-Executive Directors) at 30 June 2020
Date granted
Exercisable date
Expiry date
Fair value
11 February 2019
11 February 2019
11 February 2019
1 July 2019
1 July 2019
1 July 2019
Total
1 March 2020
1 March 2021
1 March 2022
1 July 2020
1 July 2021
1 July 2022
1 March 2025
1 March 2026
1 March 2027
1 July 2025
1 July 2026
1 July 2027
A$0.05
A$0.07
A$0.09
A$0.05
A$0.06
A$0.07
In summary, this balance represents 0.25% of the issued capital.
Exercise
price
A$0.20
A$0.20
A$0.20
A$0.1226
A$0.1226
A$0.1226
Number
700,0001
700,0001
1,100,0001
700,000
700,000
1,100,000
5,000,000
1 Michael Drake – now lapsed due to resignation and were forfeited during FY2021
Paladin Energy Ltd
27
Directors’ Report (continued)
REMUNERATION REPORT (AUDITED) (CONTINUED)
KEY ELEMENTS OF NON-EXECUTIVE DIRECTOR REMUNERATION STRATEGY
The focus of the remuneration strategy is to:
• Attract and retain talented and dedicated directors.
• Remunerate appropriately to reflect the:
-
-
-
-
size of Paladin;
the nature of its operations;
the time commitment required; and,
the responsibility the Directors carry.
The aggregate annual remuneration permitted to be paid to Non-Executive Directors is A$1,200,000 (US$895,282)
as approved by shareholders at the 2008 annual general meeting. Fees paid for the year to 30 June 2021 total
A$267,310 (US$199,431).
Remuneration Component
Elements
Base Fee
Must be contained within aggregate
limit
Details
(per annum)
Chairman
A$110,000 (US$82,068)
Non-Executive Director
A$70,000 (US$54,225)
Superannuation
Performance Rights
Statutory contributions are included
in the fees set out above
Statutory % of fees
The Board acknowledges that the granting of PRs to Non-Executive Directors is contrary to Recommendation 8.2 of
the ASX Corporate Governance Principles and Recommendations (4th Edition). However, the Board considers the
issue of the PRs to be reasonable in the circumstances in order to align Non-Executive Directors’ interests with that
of shareholders and to provide appropriate remuneration to the Non-Executive Directors for their ongoing
commitment to Paladin whilst minimising expenditure of Paladin’s cash resources.
PRs were issued to Non-Executive Directors under the 2009 Employee Share Rights Plan in lieu of a portion of cash
remuneration. The PRs were issued in order to provide an equity based component to their respective remuneration
packages.
Share Appreciation Rights held by Non-Executive Directors at 30 June 2021 - Nil
Performance Rights held by Non-Executive Directors at 30 June 2021 - Nil
All Performance Rights granted to Non-Executive Directors vested during the year.
Performance Rights held by Non-Executive Directors at 30 June 2020
Date granted
5 February 2020
5 February 2020
5 February 2020
5 February 2020
Total
Other Fees/Benefits
Expiry date
5 February 2025
5 February 2025
5 February 2025
5 February 2025
Fair value
A$0.038
A$0.038
A$0.038
A$0.038
Vesting price
A$0.20
A$0.30
A$0.40
A$0.50
Number
3,500,000
3,500,000
3,500,000
3,500,000
14,000,000
In addition, Paladin’s Constitution provides for additional compensation to be paid if any of the Directors are called
upon to perform extra services or make any special exertions on behalf of Paladin or the business of Paladin. Paladin
may compensate such Director in accordance with such services or exertions, and such compensation may be either
in addition to or in substitution for the Directors’ fees referred to above. No additional fees were paid during the
year, other than the Directors’ fees disclosed.
Directors are also entitled to be reimbursed for reasonable expenses incurred whilst engaged on Paladin business.
There is no entitlement to compensation on termination of Non-Executive directorships. Non-Executive Directors
do not earn retirement benefits, other than the statutory superannuation.
Paladin Energy Ltd
28
Directors’ Report (continued)
REMUNERATION REPORT (AUDITED) (CONTINUED)
Compensation of Key Management Personnel of the Group for the years ended 30 June 2021 and 2020.
Year
2021
2020
2021
2020
2021
2020
2021
2021
2020
2020
2020
2020
Non-Executive Directors
Mr Cliff Lawrenson1
Peter Main2
Peter Watson2
Ms Melissa Holzberger3
Ms Joanne Palmer3
Mr Rick Crabb4
Mr David Riekie5
Mr Daniel Harris5
Mr John Hodder5
Subtotal 2021
Subtotal 2020
1 Appointed 29 October 2019
2 Appointed 11 December 2019
3 Appointed 13 May 2021
4 Retired 29 October 2019
5 Resigned 11 December 2019
Paladin Energy Ltd
Short-Term Benefits
Salary
& Fees
US$
Other
US$
Termination
Payment
US$
Post
Employment
Superannuation
US$
Share
Based
Payment
Share
Rights
US$
Total
Total
Total
Performance
Related
Total
Performance
Related
US$
A$
US$
%
82,068
51,106
52,225
26,126
47,694
23,859
5,897
5,897
25,522
21,867
23,944
23,944
193,781
196,368
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,271
-
-
4,531
2,267
560
560
2,425
2,077
-
-
5,651
8,040
156,417
12,304
104,278
8,203
104,278
8,203
-
-
-
-
-
-
364,973
28,710
238,485
64,681
156,503
34,329
156,503
34,329
6,457
6,457
27,947
23,944
23,944
23,944
564,405
233,118
319,655
96,436
209,770
51,181
209,770
51,181
8,655
8,655
41,667
35,699
35,699
35,699
756,505
347,562
156,417
12,304
104,278
8,203
104,278
8,203
-
-
-
-
-
-
364,973
28,710
65.6
19.0
66.6
23.9
66.6
23.9
-
-
-
-
-
-
29
Directors’ Report (continued)
REMUNERATION REPORT (AUDITED) (CONTINUED)
Compensation of Key Management Personnel of the Group for the years ended 30 June 2021 and 2020.
Short-Term Benefits
Year
Salary
& Fees
US$
Other
US$
Termination
Payment
US$
2021
2020
2021
2020
2021
2020
2020
2021
2020
373,034
136,926
222,557
200,626
161,247
197,926
97,995
29,054
229,522
785,892
862,995
979,673
1,059,363
-
-
1,7063
-
-
-
-
-
-
1,706
-
1,706
-
-
-
-
-
-
178,4486
-
-
107,2606
-
285,708
-
285,708
Other Key Management Personnel
Mr Ian Purdy1
Ms Anna Sudlow2
Mr Jonathon Clements4
Mr Scott Sullivan5
Mr Craig Barnes7
Mr Michael Drake8
Mr Michael Drake
Subtotal 2021
Subtotal 2020
Directors & KMPs
Total – 2021
Total - 2020
Post
Employment
Superannuation
US$
Share
Based
Payment
Share
Rights
US$
Total
Total
Total
Performance
Related
Total
Performance
Related
US$
A$
US$
%
651,738
16,185
51,268
7,043
405,159
16,185
61,082
14,087
535,677
12,139
(55,155)
10,565
-
3,522
-
4,046
14,087
1,030
48,555 1,592,574
58,225
49,304
1,040,957
195,237
645,607
275,795
709,063
331,784
101,517
33,100
351,899
2,428,727
1,256,232
1,395,257
291,086
865,345
411,194
950,399
494,670
151,356
44,366
524,661
3,255,367
1,872,967
651,738
51,268
405,159
61,082
535,677
(55,155)
-
-
1,030
1,592,574
58,225
54,206 1,957,547
86,935
57,344
2,993,132
1,489,350
4,011,872
2,220,529
1,957,547
86,935
62.6
26.3
62.8
22.1
75.5
-
-
-
0.3
Notes to the Compensation Tables
Presentation Currency - The compensation table has been presented in US$, Paladin’s functional and presentation currency. The A$ value has also been shown as this is considered
to be the most relevant comparator between years, given that 100% of KMPs contracts for services were denominated in A$ and this eliminates the effects of fluctuations in the
US$ and A$ exchange rate. Exchange rate used is average for 2021 financial year US$1 = A$1.34036 (2020 financial year US$1 = A$1.49094.
1 Appointed 4 February 2020
2 Appointed 1 July 2019
3 Insurance
4 Appointed 12 October 2020
5 Ceased employment 3 March 2020
6 Ex gratia termination payment plus payment in lieu of notice
7 Resigned 9 August 2019
8 Resigned 3 July 2020
Paladin Energy Ltd
30
Directors’ Report (continued)
REMUNERATION REPORT (AUDITED) (CONTINUED)
Share Appreciation Rights Holdings of Key Management Personnel (Group)
30 June 2021
Executives
Ms Anna Sudlow
Mr Michael Drake1
Total
30 June 2020
Executives
Mr Scott Sullivan
Mr Craig Barnes
Ms Anna Sudlow
Mr Michael Drake7
01 Jul 20
number
2,500,000
2,500,000
5,000,000
01 Jul 19
number
5,000,0002
2,329,000
-
2,500,000
Granted as
remuneration
number
Fair value at
grant date
US$
Vested as
shares
number
Lapsed
number
30 Jun 21
Number
-
-
-
-
-
-
-
-
-
-
(2,500,000)
2,500,000
-
(2,500,000)
2,500,000
Granted as
remuneration
number
Fair value at
grant date
US$
Vested as
shares
number
Lapsed
number
30 Jun 20
Number
1,000,0003
-
2,500,0006
-
26,509
-
112,202
-
-
-
-
-
-
(6,000,000)4
(2,329,000)5
-
-
-
-
2,500,000
2,500,0008
(8,329,000)
5,000,000
Total
9,829,000
3,500,000
138,711
Performance Rights Holdings of Key Management Personnel (Group)
30 June 2021
Directors/Executives
Mr Cliff Lawrenson
Mr Peter Watson
Mr Peter Main
Mr Ian Purdy
Ms Anna Sudlow
Mr Jonathon Clements
Total
01 Jul 20
number
6,000,000
4,000,000
4,000,000
25,000,000
10,000,000
-
49,000,000
Granted as
remuneration
number
Fair value at
grant date
US$
Vested as
shares
number
Lapsed
number
30 Jun 21
Number
-
-
-
-
-
8,000,0009
8,000,000
-
-
-
-
-
542,710
542,710
(6,000,000)
(4,000,000)
(4,000,000)
(25,000,000)
(10,000,000)
(8,000,000)
(57,000,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Shares are subject to a 12-month voluntary escrow with a holding lock in place from the date of issue.
1 Resigned on 3 July 2020. Not exercised and lapsed on 3 July 2020 due to resignation.
2 1,000,000 SARs exercisable at A$0.1775 vested on 1 July 2019 but were not exercised and have now been cancelled
upon cessation on 4 February 2020.
3 Granted 1 October 2019. Fair value per right at grant date was US$0.03. Not exercised and have now been
cancelled upon cessation of employment.
4 Ceased employment on 3 March 2020.
5 Resigned on 9 August 2019. Not exercised and have now been cancelled.
6 Granted 1 July 2019. Fair value per right at grant date was US$0.04.
7 Resigned on 3 July 2020. Not exercised and lapsed on 3 July 2020 due to resignation.
8 700,000 SARs exercisable at A$0.20 vested on 1 March 2020 but have not been exercised with 1,800,000 SARs
exercisable at A$0.20 lapsing on 3 July 2020.
9 Granted 8 October 2020. Fair value per right at grant date was US$0.068.
Paladin Energy Ltd
31
Directors’ Report (continued)
REMUNERATION REPORT (AUDITED) (CONTINUED)
Performance Rights Holdings of Key Management Personnel (Group)
30 June 2020
Executives
Mr Cliff Lawrenson
Mr Peter Watson
Mr Peter Main
Mr Ian Purdy
Ms Anna Sudlow
Total
01 Jul 19
number
Granted as
remuneration
number
Fair value at
grant date
US$
Vested as
shares
number
Lapsed
number
30 Jun 20
Number
-
-
-
-
-
-
6,000,0001
4,000,0001
4,000,0001
25,000,0001
10,000,0002
49,000,000
153,232
102,155
102,155
638,467
345,390
1,341,399
-
-
-
-
-
-
-
-
-
-
-
-
6,000,000
4,000,000
4,000,000
25,000,000
10,000,000
49,000,000
Shares held in Paladin Energy Ltd (number)
30 June 2021
Directors
Mr Cliff Lawrenson
Mr Peter Main
Mr Peter Watson
Ms Melissa Holzberger
Ms Joanne Palmer
Executives
Mr Ian Purdy
Ms Anna Sudlow
Mr Jonathon Clements
Total
30 June 2020
Directors
Mr Rick Crabb
Executives
Mr Scott Sullivan
Total
Balance
01 Jul 20
On Vesting
of Rights3
Net Change
Other4
Balance
30 June 21
-
-
-
-
-
-
-
-
-
6,000,000
4,000,000
4,000,000
-
-
25,000,000
10,000,000
8,000,000
57,000,000
135,1364
94,5944
94,5944
21,7435
21,7255
675,6764
-
-
1,043,468
6,135,136
4,094,594
4,094,594
21,743
21,725
25,675,676
10,000,000
8,000,000
58,043,468
Balance
01 Jul 19
219,630
100,000
319,630
On Vesting
of Rights
Net Change Other
Balance
30 June 20
-
-
-
(219,630)6
(100,000)7
(319,630)
-
-
-
No other KMP held shares during the year ended 30 June 2021 and 30 June 2020.
All equity transactions with KMP have been entered into under terms and conditions no more favourable than
those the Group would have adopted if dealing at arm’s length.
1 Granted 5 February 2020. Fair value per right at grant date was US$0.026.
2 Granted 30 April 2020. Fair value per right at grant date was US$0.035.
3 Shares are subject to a 12-month voluntary escrow with a holding lock in place from the date of issue.
4 Acquisition of shares pursuant to the Paladin Energy Ltd 1 for 8.5 entitlement offer.
5 On market purchase.
6 Retired on 29 October 2019.
7 Ceased employment on 3 March 2020.
Paladin Energy Ltd
32
Directors’ Report (continued)
REMUNERATION REPORT (AUDITED) (CONTINUED)
CONTRACTS FOR SERVICES
Remuneration and other terms of employment for the KMP are normally formalised in contracts for services.
All contracts with KMP may be terminated early by either party providing between three and six months written
notice or providing payments in lieu of the notice period (based on fixed component of remuneration). On
termination notice by Paladin, any rights that have vested, or that will vest during the notice period, will be
released. Rights that have not yet vested will be forfeited.
Mr Ian Purdy, Chief Executive Officer
Term of agreement – no fixed term.
Base salary, plus statutory superannuation entitlements, of A$500,000 (2020: A$500,000).
Long term incentive: Mr Purdy was granted 25,000,000 Performance Rights upon appointment, under Paladin’s
2009 Employee Share Rights Plan, on 5 February 2020, as follows:
Date granted
5 February 2020
5 February 2020
5 February 2020
5 February 2020
Expiry date
5 February 2025
5 February 2025
5 February 2025
5 February 2025
Total
Fair value
A$0.038
A$0.038
A$0.038
A$0.038
Vesting price
A$0.20
A$0.30
A$0.40
A$0.50
Number
6,250,000
6,250,000
6,250,000
6,250,000
25,000,000
No termination benefit is specified in the agreement.
Notice period six months.
Ms Anna Sudlow, Chief Financial Officer
Term of agreement – no fixed term.
Base salary, inclusive of superannuation of A$320,000 (2020: A$320,000).
Long term incentive: Ms Sudlow was issued 2,500,000 Share Appreciation Rights (SARs) on 1 July 2019 under
Paladin’s 2009 Employee Share Rights Plan. The SARs have an exercise price of A$0.1226 and will vest in
accordance with the following vesting conditions:
• 700,000 vested on 1 July 2020
• 700,000 will vest on 1 July 2021
• 1,100,000 will vest on 1 July 2022
Long term incentive: Ms. Sudlow was granted 10,000,000 Performance Rights, under Paladin’s 2009 Employee
Share Rights Plan, on 30 April 2020, as follows:
Date granted
30 April 2020
30 April 2020
30 April 2020
30 April 2020
Expiry date
12 June 2025
12 June 2025
12 June 2025
12 June 2025
Fair value
A$0.05
A$0.05
A$0.05
A$0.05
Vesting price
A$0.20
A$0.30
A$0.40
A$0.50
Total
No termination benefit is specified in the agreement.
Notice period six months.
Number
2,500,000
2,500,000
2,500,000
2,500,000
10,000,000
Paladin Energy Ltd
33
Directors’ Report (continued)
REMUNERATION REPORT (AUDITED) (CONTINUED)
CONTRACTS FOR SERVICES (CONTINUED)
Mr Jonathon Clements, General Manager – Projects & Development (appointed 12 October 2020)
Term of agreement – no fixed term.
Base salary, plus statutory superannuation entitlements, of A$300,000.
Long term incentive: Mr Clements was granted 8,000,000 Performance Rights, under Paladin’s 2009 Employee
Share Rights Plan, on 8 October 2020, as follows:
Date granted
8 October 2020
8 October 2020
8 October 2020
8 October 2020
Expiry date
8 October 2025
8 October 2025
8 October 2025
8 October 2025
Fair value
A$0.11
A$0.09
A$0.08
A$0.08
Vesting price
A$0.20
A$0.30
A$0.40
A$0.50
Total
No termination benefit is specified in the agreement.
Notice period three months.
Number
2,000,000
2,000,000
2,000,000
2,000,000
8,000,000
Remuneration for all parties referred to above includes provision of an initial and ongoing discretionary
participation in Paladin’s long-term incentive plans.
57,000,000 (2020: Nil) Performance Rights vested to Key Management Personnel during the year ended 30 June
2021.
700,000 (2020: 1,700,000) Share Appreciation Rights vested to Key Management Personnel during the year ended
30 June 2020.
4,543,000 (2020: Nil) Share Appreciation Rights were exercised during the year ended 30 June 2021 (None by
KMPs).
Mr Michael Drake, Chief Operating Officer (resigned 3 July 2020)
Term of agreement – no fixed term.
Base salary, inclusive of superannuation of A$330,000.
Short term incentive/bonus: up to a maximum of 40% of the total annual remuneration package, to be paid in cash
or shares in Paladin (or a combination of both at Paladin’s election) and determined having regard to market
relativities, the performance of the Company and Mr Drake’s performance.
Long term incentive: Mr Drake was issued 2,500,000 SARs on 11 February 2019 under Paladin’s 2009 Employee
Share Rights Plan. The SARs had an exercise price of A$0.20 were to vest in accordance with the following vesting
conditions:
• 700,000 vested on 1 March 2020
• 700,000 will vest on 1 March 2021 (now lapsed due to resignation)
• 1,100,000 will vest on 1 March 2022 (now lapsed due to resignation)
No termination benefit is specified in the agreement.
Notice period three months.
Paladin Energy Ltd
34
Directors’ Report (continued)
REMUNERATION REPORT (AUDITED) (CONTINUED)
TOTAL PERFORMANCE RIGHTS
No unvested Performance Rights at 30 June 2021.
TOTAL SHARE APPRECIATION RIGHTS
The outstanding balance of Share Appreciation Rights at 30 June 2021 is as follows:
Date granted
Exercisable date
Expiry date
20 October 2015
20 October 2015
20 October 2015
20 October 2015
20 October 2015
20 October 2015
27 September 2016
27 September 2016
27 September 2016
16 April 2018
16 April 2018
16 April 2018
1 July 2019
1 July 2019
1 July 2019
1 October 2019
1 October 2019
1 October 2019
27 October 2020
27 October 2020
14 December 2020
14 December 2020
Total
1 November 2016
1 November 2017
1 November 2018
1 November 2016
1 November 2017
1 November 2018
11 November 2017
11 November 2018
11 November 2019
16 April 2018
16 April 2019
16 April 2020
1 July 2020
1 July 2021
1 July 2022
1 October 2020
1 October 2021
1 October 2022
9 November 2021
9 November 2022
21 December 2021
21 December 2022
1 November 2021
1 November 2022
1 November 2023
1 November 2021
1 November 2022
1 November 2023
11 November 2022
11 November 2023
11 November 2024
16 April 2023
16 April 2024
16 April 2025
1 July 2025
1 July 2026
1 July 2027
1 October 2025
1 October 2026
1 October 2027
10 November 2026
10 November 2027
22 December 2026
22 December 2027
Fair
value
A$0.13
A$0.13
A$0.13
A$0.10
A$0.10
A$0.10
A$0.08
A$0.08
A$0.08
A$0.17
A$0.05
A$0.07
A$0.05
A$0.06
A$0.07
A$0.03
A$0.04
A$0.05
A$0.13
A$0.13
A$0.21
A$0.21
Exercise
price
A$0.20
A$0.20
A$0.20
A$0.20
A$0.20
A$0.20
A$0.20
A$0.20
A$0.20
A$0.15
A$0.15
A$0.15
A$0.1226
A$0.1226
A$0.1226
A$0.12
A$0.12
A$0.12
A$0.00
A$0.00
A$0.00
A$0.00
Number
82,500
41,250
41,250
50,000
25,000
25,000
92,000
92,000
92,000
105,000
52,500
52,500
700,000
700,000
1,100,000
105,000
476,250
476,250
600,000
600,000
100,000
100,000
5,708,500
In summary, this balance represents 0.21% of the issued capital.
1,822,188 shares were issued on the exercise of SARs during the year ended 30 June 2021 (2020: Nil). There were
no other transactions with KMPs.
End of audited Remuneration Report
DIRECTORS’ INDEMNITIES
During the year Paladin has incurred premiums to insure the Directors and/or Officers for liabilities incurred as
costs and expenses that may be incurred in defending civil or criminal proceedings that may be brought against the
officers in their capacity as officers of Paladin and or its controlled entities. Under the terms and conditions of the
insurance contract, the nature of liabilities insured against and the premium paid cannot be disclosed.
Paladin Energy Ltd
35
Directors’ Report (continued)
INDEMINIFICATION OF AUDITORS
To the extent permitted by law, Paladin has agreed to indemnify its auditors, PricewaterhouseCoopers, as part of
the terms of its audit engagement agreement against claims by third parties arising from the audit (for an
unspecified amount). The Directors of Paladin Energy Limited have not provided PricewaterhouseCoopers with
any indemnities. No payment has been made to indemnify PricewaterhouseCoopers during or since the financial
year.
ROUNDING
The amounts contained in this report, the Financial Report and the Operating and Financial Review have been
rounded to the nearest US$1,000 (where rounding is applicable) under the option available to Paladin under ASIC
Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191. Paladin is an entity to which the
Instrument applies.
TOTAL PERFORMANCE RIGHTS
There is no outstanding balance of Performance Rights at the date of this report.
TOTAL SHARE APPRECIATION RIGHTS
The outstanding balance of Share Appreciation Rights at the date of this report is as follows:
Date granted
Exercisable date
Expiry date
20 October 2015
20 October 2015
20 October 2015
20 October 2015
20 October 2015
20 October 2015
27 September 2016
27 September 2016
27 September 2016
16 April 2018
16 April 2018
16 April 2018
1 July 2019
1 July 2019
1 July 2019
1 October 2019
1 October 2019
1 October 2019
27 October 2020
27 October 2020
14 December 2020
14 December 2020
Total
1 November 2016
1 November 2017
1 November 2018
1 November 2016
1 November 2017
1 November 2018
11 November 2017
11 November 2018
11 November 2019
16 April 2018
16 April 2019
16 April 2020
1 July 2020
1 July 2021
1 July 2022
1 October 2020
1 October 2021
1 October 2022
9 November 2021
9 November 2022
21 December 2021
21 December 2022
1 November 2021
1 November 2022
1 November 2023
1 November 2021
1 November 2022
1 November 2023
11 November 2022
11 November 2023
11 November 2024
16 April 2023
16 April 2024
16 April 2025
1 July 2025
1 July 2026
1 July 2027
1 October 2025
1 October 2026
1 October 2027
10 November 2026
10 November 2027
22 December 2026
22 December 2027
Fair
value
A$0.13
A$0.13
A$0.13
A$0.10
A$0.10
A$0.10
A$0.08
A$0.08
A$0.08
A$0.17
A$0.05
A$0.07
A$0.05
A$0.06
A$0.07
A$0.03
A$0.04
A$0.05
A$0.13
A$0.13
A$0.21
A$0.21
Exercise
price
A$0.20
A$0.20
A$0.20
A$0.20
A$0.20
A$0.20
A$0.20
A$0.20
A$0.20
A$0.15
A$0.15
A$0.15
A$0.1226
A$0.1226
A$0.1226
A$0.12
A$0.12
A$0.12
A$0.00
A$0.00
A$0.00
A$0.00
Number
50,000
25,000
25,000
50,000
25,000
25,000
81,000
81,000
81,000
105,000
52,500
52,500
700,000
700,000
1,100,000
105,000
426,250
426,250
600,000
600,000
100,000
100,000
5,510,500
Paladin Energy Ltd
36
Directors’ Report (continued)
AUDITOR
PricewaterhouseCoopers were appointed auditors for Paladin by shareholders at the 2016 Annual General Meeting
on 18 November 2016.
NON-AUDIT SERVICES
During the year, non-audit and assurance services were provided by Paladin’s auditor, PricewaterhouseCoopers.
The Directors are satisfied that the provision of non-audit and assurance services is compatible with the general
standard of independence for auditors imposed by the Corporations Act. The nature and scope of each type of
non-audit and assurance service provided means that auditor independence was not compromised.
Details of amounts paid or payable to PricewaterhouseCoopers can be found in Note 27.
LEAD AUDITOR’S INDEPENDENCE DECLARATION
The Lead Auditor’s Independence Declaration is set out on page 38 of the Financial Report.
Dated this 26th day of August 2021.
Signed in accordance with a resolution of the Directors
Cliff Lawrenson
Chairman
Perth, Western Australia
Paladin Energy Ltd
37
Auditor’s Independence Declaration
As lead auditor for the audit of Paladin Energy Ltd for the year ended 30 June 2021, I declare that to
the best of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Paladin Energy Ltd and the entities it controlled during the period.
Justin Carroll
Partner
PricewaterhouseCoopers
Perth
26 August 2021
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
38
Financial Report
For the year ended 30 June 2021
CONTENTS OF THE FINANCIAL REPORT
Consolidated Income Statement ....................................................................................................................... 40
Consolidated Statement of Comprehensive Income ......................................................................................... 41
Consolidated Statement of Financial Position ................................................................................................. 42
Consolidated Statement of Changes in Equity ................................................................................................. 43
Consolidated Statement of Cash Flows ............................................................................................................ 44
Notes to the Consolidated Financial Statements ............................................................................................ 45
Paladin Energy Ltd
39
Consolidated Income Statement
For the year ended 30 June 2021
Notes
2021
US$’000
2020
US$’000
Revenue
Revenue
Cost of sales
Gross profit
Other income
Foreign exchange loss (net)
Administration, marketing and non-production
costs
Loss before interest and tax
Finance costs
Net loss before income tax from continuing
operations
Income tax expense
Net loss after tax from continuing operations
11
12
12
12
12
12
13
Loss after tax from discontinued operations
18
Net loss after tax
Attributable to:
Non-controlling interests
Members of the parent
Net loss after tax
Loss per share (US cents)
2,985
(2,973)
12
2,452
(3,934)
(24,225)
(25,695)
(32,412)
-
-
-
10,306
-
(31,477)
(21,171)
(24,880)
(58,107)
(46,051)
(151)
(58,258)
-
(58,258)
(14,275)
(43,983)
(58,258)
-
(46,051)
(46,401)
(92,452)
(12,586)
(79,866)
(92,452)
Loss after tax from operations attributable to
ordinary equity holders of the Company
-
continuing operations, basic and diluted
(US cents)
discontinued operations, basic and diluted
(US cents)
-
14
14
(2.0)
-
(1.7)
(2.4)
The above Consolidated Income Statement should be read in conjunction with the accompanying notes.
Paladin Energy Ltd
40
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2021
Notes
2021
US$’000
(58,258)
2020
US$’000
(92,452)
Net loss after tax
Other comprehensive income
Items that may be subsequently reclassified to
profit or loss:
Foreign currency translation
Revaluation of financial assets
9
9
2,975
8,201
(1,254)
2,233
Income tax on items of other comprehensive
income
Items that will not be subsequently reclassified
to profit or loss:
Foreign currency translation attributable to
non-controlling interests
Other comprehensive profit for the year, net
of tax
-
-
-
-
11,176
979
Total comprehensive loss for the year
(47,082)
(91,473)
Total loss attributable to:
Non-controlling interests
Members of the parent
(14,275)
(32,807)
(12,586)
(78,887)
(47,082)
(91,473)
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the
accompanying notes.
Paladin Energy Ltd
41
Consolidated Statement of Financial Position
As at 30 June 2021
Notes
2021
US$’000
2020
US$’000
ASSETS
Current assets
Cash and cash equivalents
Restricted cash
Trade and other receivables
Prepayments
Inventories
TOTAL CURRENT ASSETS
Non-current assets
Trade and other receivables
Non-current financial assets
Right-of-use assets
Property, plant and equipment
Mine development
Exploration and evaluation expenditure
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIBILITIES
Current liabilities
Trade and other payables
Lease liabilities
Provisions
TOTAL CURRENT LIABILITIES
Non-current liabilities
Interest bearing loans and borrowings
Other Interest bearing loans - CNNC
Lease liabilities
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
Parent interests
Non-controlling interests
TOTAL EQUITY
6a
6b
16
17
16
19
20
21
22
23
24
25
7
8
25
9
9
30,661
1,000
1,978
1,259
5,123
40,021
4,776
12,880
780
178,089
16,748
99,557
8,312
321,142
361,163
2,262
49
540
2,851
-
68,743
788
42,073
111,604
114,455
246,708
34,237
1,000
1,116
1,222
5,132
42,707
5,512
4,328
215
190,889
18,548
93,369
8,831
321,692
364,399
1,544
215
522
2,281
134,394
102,638
-
32,087
269,119
271,400
92,999
2,489,082
(59,354)
(2,146,511)
283,217
(36,509)
2,327,789
(70,269)
(2,104,132)
153,388
(60,389)
246,708
92,999
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
Paladin Energy Ltd
42
Accumulated
Losses
US$’000
(2,025,649)
(79,866)
-
Attributable to
Owners of
the Parent
US$’000
209,678
(79,866)
979
Non-Controlling
Interests
US$’000
(133,040)
(12,586)
-
Total
US$’000
76,638
(92,452)
979
(79,866)
(78,887)
(12,586)
(91,473)
Consolidated Statement of Changes in Equity
For the year ended 30 June 2021
Balance at 30 June 2019
Loss for the period
Other comprehensive income
Total comprehensive income/(loss) for
the year net of tax
Share-based payment
Capital raising
Sale of Paladin Africa Ltd
Earn in of 5% share of Michelin Project
Contributed Equity
(Note 9)
US$’000
2,306,925
Reserves
(Note 9)
US$’000
(71,598)
-
-
-
-
20,864
-
-
-
978
978
351
-
-
-
-
-
-
1,383
350
20,864
-
1,383
153,388
(43,983)
11,176
(32,807)
2,094
158,938
1,604
-
Balance at 30 June 2020
2,327,789
(70,269)
(2,104,132)
Loss for the period
Other comprehensive income
Total comprehensive income/(loss)
for the year net of tax
Share-based payment
Capital raising
Earn in of 5% share of Michelin Project
Transactions with owners
capacity as owners
in their
-
-
-
2,355
158,938
-
-
-
11,176
11,176
(261)
-
-
-
(43,983)
-
(43,983)
-
-
1,604
-
Balance at 30 June 2021
2,489,082
(59,354)
(2,146,511)
283,217
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Paladin Energy Ltd
-
-
86,620
(1,383)
(60,389)
(14,275)
-
(14,275)
-
-
(1,604)
36,759
(36,509)
350
20,864
86,620
-
92,999
(58,258)
11,176
(47,082)
2,094
158,938
-
39,759
246,708
43
Consolidated Statement of Cash Flows
For the year ended 30 June 2021
Notes
2021
US$’000
2020
US$’000
15
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers1
Payments to suppliers and employees2
Exploration and evaluation expenditure
Other income3
Interest received
Interest and other costs of finance paid
Tax paid
NET CASH OUTFLOW FROM OPERATING
ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment
Proceeds from sale of property, plant & equipment
Capitalised exploration expenditure
LHM restart study costs
Proceeds from sale of subsidiary
NET CASH OUTFLOW FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Equity fundraising costs
Secured Notes interest paid4
Repayment of Secured Notes
Subsidiary sale consent fee to Noteholders and
other selling costs
NET CASH INFLOW FROM FINANCING ACTIVITIES
NET (DECREASE)/ INCREASE IN CASH AND CASH
EQUIVALENTS
Unrestricted cash and cash equivalents at the
beginning of the financial year
Effects of exchange rate changes on cash and cash
equivalents
UNRESTRICTED CASH AND CASH EQUIVALENTS AT
THE END OF THE FINANCIAL YEAR
2,985
(9,787)
-
1,340
95
(47)
(151)
(5,565)
(38)
50
(1,081)
(2,142)
1,000
(2,211)
166,560
(7,597)
(42,765)
(115,000)
-
1,198
-
(13,628)
(4)
1,766
435
(47)
-
(11,478)
(273)
39
(1,014)
(3,059)
4,000
(307)
21,664
(800)
-
-
(1,142)
19,722
(6,578)
7,937
34,237
3,002
25,360
940
30,661
34,237
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
1 During FY2021 the Company participated in a spot trading opportunity.
2 Includes cost of sales relating to the spot trade of US$2,973,000.
3 During FY2021 the Company reached final settlement for litigation related to previous activities at the Kayelekera
Mine in the amount of US$1,316,000 (not related to the sale to Lotus Resources Ltd).
4 The Group’s accounting policy is to treat interest as a finance cost.
Paladin Energy Ltd
44
Notes to the Consolidated Financial Statements
For the year ended 30 June 2021
BASIS OF PREPARATION .......................................................................................................................................... 46
Corporate Information ...................................................................................................................... 46
Note 1.
Structure of the Financial Report ...................................................................................................... 46
Note 2.
Basis of Preparation ......................................................................................................................... 46
Note 3.
Note 4.
Going Concern .................................................................................................................................. 49
SEGMENT INFORMATION .................................................................................................................................. 50
Segment Information ...................................................................................................................... 50
Note 5.
CAPITAL STRUCTURE ....................................................................................................................................... 53
Cash and Cash Equivalents ................................................................................................................ 53
Note 6a.
Restricted Cash .................................................................................................................................. 53
Note 6b
Interest Bearing Loans and Borrowings ............................................................................................. 54
Note 7.
Other Interest Bearing Loans - CNNC ................................................................................................ 55
Note 8.
Contributed Equity and Reserves ...................................................................................................... 57
Note 9.
Note 10.
Financial Risk Management ............................................................................................................... 59
PERFORMANCE FOR THE YEAR .......................................................................................................................... 65
Revenue ............................................................................................................................................. 65
Note 11.
Income and Expenses ...................................................................................................................... 66
Note 12.
Income and Other Taxes .................................................................................................................... 67
Note 13.
Earnings Per Share ............................................................................................................................ 69
Note 14.
Reconciliation of Earnings After Income Tax to Net Cash
Note 15.
Flow from Operating Activities .......................................................................................................... 70
OPERATING ASSETS AND LIABILITIES ................................................................................................................. 71
Trade and Other Receivables ............................................................................................................. 71
Note 16.
Inventories ....................................................................................................................................... 72
Note 17.
Discontinued Operations and Assets and Liabilities Classified as held for sale ................................. 73
Note 18.
Non Current Financial Assets ............................................................................................................. 75
Note 19.
Property, Plant and Equipment ......................................................................................................... 75
Note 20.
Mine Development ......................................................................................................................... 77
Note 21.
Exploration and Evaluation Expenditure ........................................................................................... 78
Note 22.
Intangible Assets ............................................................................................................................... 79
Note 23.
Trade and Other Payables ................................................................................................................. 80
Note 24.
Provisions .......................................................................................................................................... 81
Note 25.
OTHER NOTES ................................................................................................................................................. 83
Key Management Personnel ............................................................................................................. 83
Note 26.
Auditors’ Remuneration .................................................................................................................... 83
Note 27.
Commitments and Contingencies ..................................................................................................... 84
Note 28.
Related Parties .................................................................................................................................. 85
Note 29.
Group Information ............................................................................................................................ 85
Note 30.
Events after the Balance Date ........................................................................................................... 86
Note 31.
New Accounting Standards and Interpretations ............................................................................... 87
Note 32.
Paladin Energy Ltd
45
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
BASIS OF PREPARATION
NOTE 1.
CORPORATE INFORMATION
The Financial Report of Paladin Energy Ltd (Paladin) for the year ended 30 June 2021 was authorised for issue by
the Directors on 26 August 2021.
Paladin is a company limited by shares, incorporated and domiciled in Australia whose shares are publicly traded
on the ASX in Australia, with additional listings on the Munich, Berlin, Stuttgart and Frankfurt Stock Exchanges in
Europe; and the Namibian Stock Exchange in Africa. The Company also trades on the OTCQX market in the United
States and the Munich, Berlin, Stuttgart and Frankfurt markets.
The Group’s principal place of business is Level 8, 191 St Georges Terrace, Perth, Western Australia. The nature of
the operations and principal activities of the Group are described in the Operating and Financial Review (unaudited)
on pages 8 to 10.
NOTE 2.
STRUCTURE OF THE FINANCIAL REPORT
The Notes to the Consolidated Financial Statements have been grouped into six key categories, which are
summarised as follows:
Basis of Presentation
This section sets out the group’s significant accounting policies that relate to the financial statements as a whole.
Where an accounting policy is specific to one note, the policy is described in the note to which it relates. Accounting
policies determined non-significant are not included in the financial statements.
Segment Information
This section compares performance across operating segments.
Capital Structure
This section outlines how the group manages its capital and related financing costs.
Performance for the Year
This section focuses on the results and performance of the group. This covers both profitability and the resultant
return to shareholders via earnings per share combined with cash generation.
Operating Assets and Liabilities
This section shows the assets used to generate the group’s trading performance and the liabilities incurred as a
result. Liabilities relating to the group’s financing activities are addressed in the Capital Structure section.
Other Notes
This section deals with the remaining notes that do not fall into any of the other categories.
NOTE 3.
BASIS OF PREPARATION
Introduction and Statement of Compliance
The Financial Report is a general-purpose Financial Report, which has been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards Board.
Paladin Energy Ltd
46
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 3.
BASIS OF PREPARATION (CONTINUED)
Introduction and Statement of Compliance (continued)
The Financial Report complies with International Financial Reporting Standards as issued by the International
Accounting Standards Board. The Financial Report has also been prepared on a historical cost basis. Where
necessary, comparatives have been reclassified and repositioned for consistency with current year disclosures. For
the purposes of preparing the consolidated financial statements, the Company is a for-profit entity.
The Financial Report is presented in US dollars and all values are rounded to the nearest thousand dollars
(US$1,000) unless otherwise stated under the option available to the Company under Australian Securities and
Investments Commission (ASIC) Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191.
Changes in Accounting Policies
Apart from the changes in accounting policies noted below, the accounting policies adopted are consistent with
those disclosed in the Financial Report for the year ended 30 June 2021.
Certain prior year amounts have been reclassified for consistency with the current year presentation. These
reclassifications had no effect on the report results of the Group.
The Group has adopted all new and amended Australian Accounting Standards and AASB Interpretations effective
from 1 July 2020. The nature and impact of each new standard and amendment is described below:
Reference
Summary
Impact
AASB 2018-7
ASIC Areas of Focus for 30 June
2020
The AASB has made amendments to AASB 101
Presentation of Financial Statements and AASB
108 Accounting Policies, Changes in Accounting
Estimates and Errors and consequential
amendments to other Australian Accounting
Standards (AAS) which: i) use a consistent
definition of materiality throughout AAS and the
Conceptual Framework for Financial Reporting;
ii) clarify when information is material; and iii)
incorporate some of the guidance in AASB 101
about immaterial information.
In its most recent publication in June 2020, ASIC
identified five areas of focus which address
financial reporting under COVID-19 conditions
and should be read in conjunction with ASIC’s
COVID-19 frequently asked questions.
There was no material
impact on the financial
statements.
There was no material
impact on the following five
areas:
• Asset values
• Provisions
• Solvency and going
concern assessments
• Events occurring after
year end and before
completing the financial
report, and
• Disclosures and
Operating and Financial
Review (OFR).
Paladin Energy Ltd
47
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 3.
BASIS OF PREPARATION (CONTINUED)
Basis of Consolidation
The consolidated financial statements comprise the financial statements of Paladin Energy Ltd and its subsidiaries
as at 30 June 2021 (the Group).
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over the investee. Specifically, the Group
controls an investee if and only if the Group has:
• Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the
investee);
• Exposure, or rights, to variable returns from its involvement with the investee; and
• The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether it has power over an investee, including:
• The contractual arrangement with the other vote holders of the investee;
• Rights arising from other contractual arrangements; and
• The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities,
income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of
comprehensive income from the date the Group gains control until the date the Group ceases to control the
subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the
parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having
a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their
accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity,
income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on
consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
transaction.
Foreign Currency Translation
Functional and Presentation Currency
Items included in the Financial Statements of each of the Group's entities are measured using the currency of the
primary economic environment in which the entity operates ('the functional currency'). The Consolidated Financial
Statements are presented in United States dollars (US dollars).
Transactions and Balances
Foreign currency transactions are converted into the functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions
and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the Income Statement. Translation differences on available-for-sale financial assets
are included in the available-for-sale reserve.
Paladin Energy Ltd
48
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 3.
BASIS OF PREPARATION (CONTINUED)
Foreign Currency Translation (continued)
Group Companies
Some Group entities have a functional currency of US dollars which is consistent with the Group’s presentational
currency. For all other Group entities the functional currency has been translated into US dollars for presentation
purposes. Assets and liabilities are translated using exchange rates prevailing at the balance date; revenues and
expenses are translated using average exchange rates prevailing for the income statement year; and equity
transactions are translated at exchange rates prevailing at the dates of transactions. The resulting difference from
translation is recognised in a foreign currency translation reserve. Upon the sale of a subsidiary the Functional
Currency Translation Reserve (FCTR) attributable to the parent is recycled to the Income Statement.
The functional currency of individual subsidiaries reflects their operating environment.
Significant Accounting Judgements, Estimates and Assumptions
The preparation of the Group’s consolidated financial statements requires management to make judgements,
estimates and assumptions in applying the group’s accounting policies that affect the reported amounts of
revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent
liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material
adjustment to the carrying amount of assets or liabilities affected in future periods.
Areas involving significant estimates or judgements are:
• Estimated fair value of certain financial liabilities -Note 8
Estimates and judgements are continually evaluated. They are based on historical experience and other factors,
including expectations of future events that may have a financial impact on the entity and that are believed to be
reasonable under the circumstances.
NOTE 4.
GOING CONCERN
At 30 June 2020 the Directors assessed that there was material uncertainty that may have cast significant doubt
on the entity’s ability to continue as a going concern. This related to the Group’s ability to repay the
US$115,000,000 Senior Secured Notes with a balance, including accrued interest, of US$134,394,000 maturing in
2023.
Paladin fully redeemed the US$115,000,000 senior secured notes in April 2021. The senior secured notes have
subsequently been cancelled and delisted and all security registrations have been discharged.
At 30 June 2021, Paladin has no corporate debt.
The financial statements have been prepared on the basis of accounting policies applicable to a going concern.
This basis presumes that funds will be available to finance future operations and that the realisation of assets and
settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.
The Directors are satisfied that it is appropriate to prepare the financial statements on a going concern basis.
Paladin Energy Ltd
49
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
SEGMENT INFORMATION
NOTE 5.
SEGMENT INFORMATION
Identification of Reportable Segments
The Company has identified its operating segments to be Exploration, Namibia and Australia, on the basis of the
nature of the activity and geographical location and different regulatory environments. The main segment activity
in Namibia1 is the production and sale of uranium from the mine located in this country’s geographic regions. The
Australian segment includes the Company’s sales and marketing, corporate and administration. The Exploration2
segment is focused on developing exploration and evaluation projects in Australia and Canada.
Discrete financial information about each of these operating segments is reported to the Group’s executive
management team (chief operating decision makers) on at least a monthly basis.
The accounting policies used by the Group in reporting segments internally are the same as those contained in the
accounts and in the prior period.
Corporate charges comprise non-segmental expenses such as corporate office expenses. A proportion of the
corporate charges are allocated to Namibia and Exploration tenements with the balance remaining in Australia.
1 In May 2018, the Company received the consent of relevant stakeholders to place the LHM into care and
maintenance and the LHM stopped presenting ore to the plant.
2 In FY2021, the Company has only undertaken the work required to meet minimum tenement commitments.
Paladin Energy Ltd
50
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 5.
SEGMENT INFORMATION (CONTINUED)
The following tables present revenue, expenditure and asset information regarding operating segments for the
years ended 30 June 2021 and 30 June 2020.
Year ended
30 June 2021
Sales to external customers
Total consolidated revenue
Exploration
U$’000
-
-
Namibia
US$’000
2,985
2,985
(2,973)
12
40
Australia
US$’000
-
-
Consolidated
US$’000
2,985
2,985
-
-
5,475
(2,973)
12
5,515
(25,141)
(6,081)
(31,222)
(25,089)
(606)
(25,695)
(8,992)
(23,420)
(32,412)
(34,081)
(24,026)
(58,107)
-
(151)
(151)
(34,081)
(24,177)
(58,258)
-
-
-
-
-
-
-
-
-
94,840
215,156
51,1671
361,163
Australia
U$’000
68,755
Canada
US$’000
31,540
Namibia
US$’000
207,967
Consolidated
US$’000
308,262
Cost of sales
Gross profit
Other income
Other expenses
Segment loss before income
tax and finance costs
Finance costs
Loss before income tax
Income tax expense
Net loss after tax
At 30 June 2021
Segment assets/total assets
Non-current
financial instruments) by country
assets
(excluding
Additions to non-current assets by
country
-
-
Property, Plant and Equipment
Exploration and Evaluation
Expenditure
39
566
-
510
-
2,167
39
3,243
1 Includes US$30,350,000 in cash and cash equivalents.
Paladin Energy Ltd
51
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 5.
SEGMENT INFORMATION (CONTINUED)
Year ended
30 June 2020
Sales to external customers
Total consolidated revenue
Exploration
U$’000
-
-
Namibia
US$’000
-
-
Malawi
US$’000
-
-
Australia
US$’000
-
-
Consolidated
US$’000
-
-
Cost of sales
Gross profit
Other income
Other expenses
Segment loss before income
tax and finance costs
Finance costs
Loss before income tax
Income tax expense
Net loss after tax from continuing
operations
Loss after
operations
tax
from discontinued
-
-
-
(4)
(4)
-
(4)
-
(4)
-
-
-
7,578
(24,274)
(16,696)
(7,447)
(24,143)
-
(24,143)
-
-
-
-
-
-
-
-
-
-
-
-
-
2,728
10,306
(7,199)
(31,477)
(4,471)
(21,171)
(17,433)
(24,880)
(21,904)
(46,051)
-
-
(21,904)
(46,051)
-
(46,401)
-
(46,401)
Net loss after tax
(4)
(24,143)
(46,401)
(21,904)
(92,452)
At 30 June 2020
Segment assets/total assets
90,952
229,042
-
44,4051
364,399
Non-current assets (excluding financial
instruments) by country
Additions to non-current assets by
country
-
Property, Plant and Equipment
-
Exploration and Evaluation
Expenditure
Australia
U$’000
Canada
US$’000
Namibia
US$’000
Consolidated
US$’000
68,817
28,105
220,442
317,364
245
578
56
436
-
3,059
301
4,073
1 Includes US$32,620,000 in cash and cash equivalents.
Paladin Energy Ltd
52
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
CAPITAL STRUCTURE
The group's objectives when managing capital are to safeguard its ability to continue as a going concern, so that it
can continue to provide returns to shareholders and benefits for other stakeholders and to maintain an efficient
capital structure to reduce the cost of capital. Capital includes issued capital and all other equity reserves
attributable to the equity holders of the parent.
In order to maintain or adjust the capital structure, the group may issue new shares or sell assets to reduce debt.
The group monitors capital on the basis of the level of return on capital and also the level of net cash/debt. The
group manages funds on a group basis with all funds being drawn by the parent entity.
NOTE 6a.
CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short-term bank deposits
Total cash and cash equivalents
NOTE 6b.
RESTRICTED CASH
Restricted cash at bank
Total restricted cash and cash equivalents
2021
US$’000
3,608
27,053
2020
US$’000
5,264
28,973
30,661
34,237
2021
US$’000
1,000
2020
US$’000
1,000
1,000
1,000
The cash is restricted for use in respect of an environmental guarantee provided by the LHM.
Recognition and measurement
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term,
highly liquid investments with original maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Cash at
bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying
periods depending on the immediate cash requirements of the Group and earn interest at the respective short-
term deposit rates.
Paladin Energy Ltd
53
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 7.
INTEREST BEARING LOANS AND BORROWINGS
Maturity
2021
US$’000
Non-Current
Senior secured notes
2023
Total non-current interest bearing loans
and borrowings
Senior secured notes
Face value of senior secured notes issued
Equity component
Liability component on initial recognition
Transaction costs
Accretion expense
Capitalised interest
Liability component at 30 June
Senior secured notes redemption
Repayment of senior secured notes issued
Senior secured notes redemption
premium & interest paid
Total redemption
Senior loans and borrowings
-
-
-
-
-
-
-
-
-
115,000
42,765
157,765
2020
US$’000
134,394
134,394
115,000
(7,475)
107,525
(9,099)
5,222
30,746
134,394
-
-
-
Paladin fully redeemed the US$115,000,000 senior secured notes in April 2021. The Senior Notes have
subsequently been cancelled and delisted and all security registrations have been discharged.
FY2020
On 25 January 2018, as part of the effectuation of the DOCA, the Company issued US$115,000,000 9%/10%
payment in kind (PIK) toggle Senior Notes repayable on 25 January 2023. The Senior Notes were secured by the
majority of the Group’s assets, with the main exceptions being the Group’s shares in Summit Resources Limited
and the Canadian subsidiaries. Subscribers for the notes received a pro-rata allocation of 25% of the Company’s
issued shares. The Senior Notes were not convertible and were listed on the Singapore Stock Exchange. The
underwriters of the Notes received 3% of the Company’s issued shares.
PIK Interest on the Notes accrued at a rate of 10% per annum and was deferred on each interest payment date
commencing on 31 March 2018. No additional Notes were issued in respect of such deferred PIK interest. Each
amount of deferred PIK interest also bore interest at the rate of 10% per annum from and including the date on
which the payment was deferred. However Paladin was required to pay cash interest (rather than PIK interest) at
a rate of 9% per annum if (a) the operating cash flows (determined in accordance with IFRS) minus maintenance
capital expenditure of Paladin and its subsidiaries (on an attributable basis) for the half-year immediately preceding
such interest payment date is no less than US$5,000,000 and (b) Paladin and its subsidiaries (on a consolidated
basis) have, after giving pro forma effect to such cash interest payment, no less than US$50,000,000 of cash and
cash equivalents (net of restricted cash) as of the last day falling 15 calendar days before the relevant interest
payment date (31 March and 30 September).
Paladin could also elect to pay cash interest at a rate of 9% per annum on each payment date commencing from
31 March 2018 for interest due in respect of any interest period except for the final interest period, with respect
to 25%, 50%, 75% or 100% of the applicable interest payment (with the relevant balance being deferred PIK
interest), even if Paladin was not required to pay cash interest. All amounts of deferred PIK interest (and any
interest accrued thereon) were due and payable (in cash) when the notes were redeemed.
Paladin Energy Ltd
54
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 7.
INTEREST BEARING LOANS AND BORROWINGS (CONTINUED)
Fair value disclosures
Details of the fair value of the Group’s interest bearing liabilities are set out in Notes 8 and 10.
Recognition and measurement
Loans and borrowings are initially recognised at fair value, net of transaction costs incurred. Loans and borrowings
are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and
the redemption amount is recognised in the Income Statement over the period of the borrowings using the
effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of
the liability for at least 12 months after the balance date.
The component of Senior Notes that exhibited characteristics of debt was recognised as a liability in the Statement
of Financial Position, net of transaction costs. On issue of Senior Notes, the fair value of the liability component
was determined using a market rate for an equivalent non-convertible bond and this amount was carried as a
liability on the amortised cost basis until extinguished on redemption. The increase in the liability due to the
passage of time was recognised as a finance cost. The remainder of the proceeds was allocated to the equity
component and was recognised in shareholders’ equity. The carrying amount of the equity component was not
remeasured in subsequent years.
NOTE 8.
OTHER INTEREST BEARING LOANS - CNNC
(Non-Current)
LHU’s loans from CNNC
2021
US$’000
2020
US$’000
68,743
102,638
As part of the sale of the 25% interest in Langer Heinrich Mauritius Holdings Limited (LHMHL) in 2014 to CNNC
Overseas Uranium Holding Limited (CNNC), US$96,000,000 (representing 25%) of the intercompany shareholder
loans owing by Langer Heinrich Uranium (Pty) Ltd (LHU) to Paladin Finance Pty Ltd (PFPL) were assigned to CNNC
under the same interest rate and conditions in place at the time.
Under the Shareholders’ Agreement between CNNC, PFPL and LHMHL, each shareholder has agreed not to demand
repayment of the loans without the prior written consent of the other shareholder. As neither CNNC nor PFPL can
demand repayment, the repayment of the loans can be deferred. Repayment is dependent on LHU generating
sufficient free cash flows to repay the loans and these loans have not been guaranteed by Paladin.
On consolidation, PFPL’s 75% share of the LHU intercompany shareholder loans are eliminated against the
intercompany shareholder loans receivable recorded in PFPL and therefore, they do not appear on Paladin’s
consolidated statement of financial position. As a result of the consolidation of 100% of LHU’s assets and liabilities,
LHU's shareholder loan liability to CNNC is recognised on the consolidated statement of financial position.
On 1 January 2021, two shareholder loan facility agreements were extended with revised terms. The face value of
the loans remain the same. The revised terms included modifications to the term and interest rate of the loans.
These revisions are considered a substantial modification under AASB9.
Under AASB9 Financial Instruments, amendments constituting a “substantial” modification of the loan terms
require the original loan facilities to be “extinguished” and derecognised and new loan facilities are recognised at
fair value.
The revised terms of the shareholder loans reflect a mix of fixed and floating rate interest and interest free periods
and consider that the LHM is on care and maintenance and not generating revenue. The shareholders loan terms
may not be reflective of market conditions for external borrowings at this time.
The future value of anticipated cash flows, based on the revised loan terms, has been derived using an income
approach by discounting the revised cashflows at a rate of that the Company considers representative of an
unsecured borrowing rate available in the market.
Paladin Energy Ltd
55
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 8.
OTHER INTEREST BEARING LOANS – CNNC (CONTINUED)
As a result, the book value of the total amount of the shareholder loans amounting to US$400,438,000 (owing to
the Group and CNNC at 31 December 2020) was derecognised and “new” loans recognised at a fair value of
US$247,633,000 at that date with the difference taken directly to equity as a shareholder contribution. After
eliminations, the fair value of the CNNC share of the loan facilities was recognised at US$64,432,000.
The difference between the fair value and face value of the loans has been recognised in equity and will be
unwound over the term of the loans through the effective interest rate. At 30 June 2021 $2,918,000 accretion
expense had been recognised from 1 January 2021.
The effect of modification has resulted in the following balances being recognised in the LHU accounts as set out
below:
Balance of shareholder loans at 30 June 2020 (at amortised cost)
Amount owing to PFPL (eliminated on consolidation)
Amount owing to CNNC
Total LHU shareholder loans
Balance of shareholder loans at 1 January 2021 (at fair value)
Amount owing to PFPL (eliminated on consolidation)
Amount owing to CNNC
Total LHU shareholder loans
US$’000
291,766
102,638
394,408
US$’000
183,201
64,432
247,633
There is no change in the face value of the loans which amounted to $105,584,000 at 30 June 2021.
NOTE 9.
CONTRIBUTED EQUITY AND RESERVES
Issued and Paid Up Capital
Number of Shares
2021
2020
2021
US$’000
2020
US$’000
Ordinary shares
Issued and fully paid
2,677,756,397
2,027,891,013
2,489,082
2,327,789
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Recognition and measurement
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are
shown in equity as a deduction, net of tax, from the proceeds.
Paladin Energy Ltd
56
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 9.
CONTRIBUTED EQUITY AND RESERVES (CONTINUED)
Movements in ordinary shares on issue
Number of
Shares
Issue Price
A$
Exchange Rate
US$: A$
Date
Balance 30 June 2019
September 2019
October 2019
Share placement
Share Purchase Plan
Transaction Costs
1,752,084,272
262,812,641
12,994,100
Balance 30 June 2020
2,027,891,013
December 2020
December 2020
January 2021
March 2021
March 2021
April 2021
April 2021
May 2021
May 2021
June 2021
SARs exercised
Conversion of PRs
Conversion of PRs
Conversion of PRs
Share placement
Institutional offer
SARs exercised
Conversion of PRs
SARs exercised
SARs exercised
Transfer from share-
based payment reserve
Transaction costs
1,056,623
14,250,000
14,250,000
14,250,000
520,330,943
70,712,253
245,195
14,250,000
326,377
193,993
Balance 30 June 2021
2,677,756,397
0.115
0.115
1.46333
1.48029
-
-
-
-
0.37
0.37
-
-
-
-
-
-
-
-
1.31480
1.29958
-
-
-
-
Total
US$’000
2,306,925
20,654
1,010
(800)
2,327,789
-
-
-
-
146,427
20,132
-
-
-
-
2,355
(7,621)
2,489,082
Paladin Energy Ltd
57
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 9.
CONTRIBUTED EQUITY AND RESERVES (CONTINUED)
Reserves
Balance at 1 July 2019
Share-based payments
Foreign currency translation
Revaluation of financial assets
Consolidation
reserve
US$’000
48,319
Listed option
application
reserve
US$’000
137
-
-
-
-
-
-
Share based
payment reserve
Foreign currency
translation reserve
Financial assets at
FVOCI reserve
Premium on
acquisition reserve
US$’000
-
US$’000
14,086
US$’000
47,952
351
-
-
US$’000
(182,092)
-
(1,255)
-
Balance at 30 June 2020
48,319
137
48,303
(183,347)
Share-based payments
Foreign currency translation
Revaluation of financial assets
-
-
-
-
-
-
(261)
-
-
-
2,975
-
Total
US$’000
(71,598)
351
(1,255)
2,233
-
-
-
14,086
(70,269)
-
-
-
(261)
2,975
8,201
-
-
2,233
2,233
-
-
8,201
Balance at 30 June 2021
48,319
137
48,042
(180,372)
10,434
14,086
(59,354)
Paladin Energy Ltd
58
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 9.
CONTRIBUTED EQUITY AND RESERVES (CONTINUED)
Nature and Purpose of Reserves
Consolidation reserve
This reserve is the result of the difference between the fair value and the net assets of a reduction of interest in
controlled entities where Paladin retained control.
Listed option application reserve
This reserve consists of proceeds from the issue of listed options, net of expenses of issue. These listed options
expired unexercised and no restriction exists for the distribution of this reserve.
Share-based payments reserve
This reserve is used to record the value of equity benefits provided to Directors, employees and consultants as part
of their remuneration.
Financial assets at fair value in other comprehensive income
This reserve records the changes in fair value of certain investments in equity securities in Other Comprehensive
Income. The group transfers amounts from this reserve to retained earnings when the relevant equity securities
are derecognised.
Foreign currency translation reserve
This reserve is used to record exchange differences arising on translation of the group entities that do not have a
functional currency of US dollars and have been translated into US dollars for presentation purposes, as described
in Note 3.
Premium on acquisition reserve
This reserve represents the premium paid on the acquisition of an interest in Summit.
NOTE 10.
FINANCIAL RISK MANAGEMENT
Financial Risk Management Objectives and Policies
The Group’s management of financial risk is aimed at ensuring net cash flows are sufficient to:
• Meet all its financial commitments; and
• Maintain the capacity to fund corporate growth activities.
The Group monitors its forecast financial position on a regular basis.
Market, liquidity and credit risk (including foreign exchange, commodity price and interest rate risk) arise in the
normal course of the Group’s business. These risks are managed under Board approved directives which underpin
practices and processes. The Group’s principal financial instruments comprise interest bearing debt, cash and
short-term deposits and available for sale financial assets. Other financial instruments include trade receivables
and trade payables, which arise directly from operations.
Market Risk
Foreign Exchange Risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency
exposures.
Foreign exchange risk arises from future commitments, assets and liabilities that are denominated in a currency
that is not the functional currency of the relevant Group company.
The Group’s borrowings and deposits are largely denominated in both US and Australian dollars. Currently there
are no foreign exchange hedge programmes in place. However, the Group finance function manages the purchase
of foreign currency to meet operational requirements.
Paladin Energy Ltd
59
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 10.
FINANCIAL RISK MANAGEMENT (CONTINUED)
Market Risk (continued)
The financial instruments exposed to movements in the Australian dollar are as follows:
Financial assets
Cash and cash equivalents
Trade and other receivables
Non-current financial assets
Financial liabilities
Trade and other payables
Net exposure
2021
US$’000
2020
US$’000
17,428
416
12,880
30,724
(1,097)
29,627
4,627
321
4,328
9,276
(813)
8,463
The following table summarises the sensitivity of financial instruments held at balance sheet date to movements
in the exchange rate of the Australian dollar to the US dollar, with all other variables held constant. The 9%
sensitivity is based on reasonably possible changes, over a financial year, using the observed range of actual
historical rates for the preceding five year period.
Post-Tax Gain/(Loss)
AUD/USD +9% (2020: +5%)
AUD/USD -9% (2020: -5%)
IMPACT ON PROFIT/LOSS
2020
US$’000
2021
US$’000
(2,051)
1,712
(312)
282
IMPACT ON EQUITY
2021
US$’000
891
(744)
2020
US$’000
159
(144)
The financial instruments exposed to movements in the Namibian dollar are as follows:
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Net exposure
2021
US$’000
2020
US$’000
78
38
116
(169)
(53)
1,604
69
1,673
(98)
1,575
Based on the Group’s net exposure at the balance date, a reasonably possible change in the exchange rate would
not have a material impact on profit or equity.
Interest Rate Risk
Interest rate risk is the risk that the Group’s financial position will be adversely affected by movements in interest
rates that will increase the cost of floating rate debt or opportunity losses that may arise on fixed rate borrowings
in a falling interest rate environment.
The interest rate risk on interest-bearing liabilities is not considered to be a material risk. These loans represent
the 25% of intercompany shareholder loans owing by LHU to Paladin Finance Pty Ltd (PFPL) that were assigned to
CNNC upon the sale of a 25% interest in LHMHL to CNNC in 2014. These loans maintain the same conditions as the
intercompany shareholder loans and have a range of fixed and floating rates. During the year, the shareholder
loans were extended with revised conditions. Note 8 details the impact of the extensions. All other financial assets
and liabilities in the form of receivables, investments in shares, payables and provisions, are non-interest bearing.
Paladin Energy Ltd
60
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 10.
FINANCIAL RISK MANAGEMENT (CONTINUED)
Market Risk (continued)
The Group currently does not engage in any hedging or derivative transactions to manage interest rate risk.
The floating rate financial instruments exposed to interest rate movements are as follows:
Financial assets
Cash and cash equivalents – short-term
Deposit
Restricted cash
Financial liabilities
Interest-bearing liabilities
Net exposure
Market Price Risk
2021
US$’000
2020
US$’000
30,661
34,237
1,000
1,000
31,661
35,237
(68,743)
(102,638)
(37,082)
(67,401)
Price risk is the risk that the Group's financial position will be adversely affected by movements in the market value
of its available-for-sale financial assets.
The financial instruments exposed to movements in market value are as follows:
Financial assets
Other financial assets
2021
US$’000
2020
US$’000
12,880
4,328
The following table summarises the sensitivity of financial instruments held at balance date to movements in the
market price of available-for-sale financial instruments, with all other variables held constant. The 25% sensitivity
is based on reasonable possible changes, over a financial year, using the observed range of actual historical prices.
Post-Tax Gain/(Loss)
Market price +25% (2020: +25%)
Market price -25% (2020: -25%)
Post-tax impact on reserve
Market price +25% (2020: +25%)
Market price -25% (2020: -25%)
Liquidity Risk
IMPACT ON EQUITY
2020
2021
US$’000
US$’000
2,254
(2,254)
2,254
(2,254)
757
(757)
757
(757)
The liquidity position of the Group is managed to ensure sufficient liquid funds are available to meet the Group’s
financial commitments in a timely and cost effective manner. The Group finance function continually reviews the
Group’s liquidity position including cash flow forecasts to determine the forecast liquidity position and maintain
appropriate liquidity levels. Sensitivity analysis is conducted on a range of pricing and market assumptions to
ensure the Group has the ability to meet repayment commitments. This enables the Group to manage cash flows
on a long-term basis and provides the flexibility to pursue a range of funding alternatives if necessary. Note 7
details the repayment obligations in respect of the amount of the facilities.
Paladin Energy Ltd
61
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 10.
FINANCIAL RISK MANAGEMENT (CONTINUED)
The maturity profile of the Group’s payables based on contractual undiscounted payments is as follows:
Payables maturity analysis
Total
<1 year
1-2 years
2-3 years
>3 years
US$’000
US$’000
US$’000
US$’000
US$’000
2021
Trade and other payables
LHU’s loans from CNNC - principal
Interest payable on CNNC loans
2,262
80,928
24,656
2,262
-
-
Total payables
107,846
2,262
2020
Trade and other payables
Loans and borrowings
Deferred interest
LHU’s loans from CNNC - principal
Interest payable on CNNC loans
Total payables
Credit Risk
1,541
115,000
30,745
80,928
21,710
249,924
1,541
-
-
-
-
1,541
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
115,000
30,745
-
-
-
80,928
24,656
105,584
-
-
-
80,928
21,710
145,745
102,638
Credit risk is the risk that a contracting entity will not complete its obligation under a financial instrument that will
result in a financial loss to the Group. The carrying amount of financial assets represents the maximum credit
exposure. The Group’s receivables are due from recognised, creditworthy third parties. In addition, receivable
balances are monitored on an ongoing basis.
Cash and cash equivalents are also subject to the impairment requirements of AASB 9.
The maximum exposure to credit risk at the reporting date was a total of US$38,415,000 (2020: US$41,866,000),
comprising cash and receivables.
Current
Cash and cash equivalents*
Restricted cash*
Other receivables – other entities
Non-Current
Other receivables – other entities
Total
2021
US$’000
2020
US$’000
30,661
1,000
1,978
34,237
1,000
1,116
33,639
36,353
4,776
5,513
38,415
41,866
* The Group’s maximum deposit with a single financial institution represents 62% (2020: 77%) of cash and cash
equivalents. This financial institution has a credit rating of Aa3 (2020: Aa3).
Restricted cash is held in Namibia, this financial institution has a credit rating of Ba2 (2020: Ba2).
Paladin Energy Ltd
62
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 10.
FINANCIAL RISK MANAGEMENT (CONTINUED)
Credit Risk (continued)
2021
2021
Trade receivables
Other receivables
Total receivables
2020
Trade receivables
Other receivables
Total receivables
Receivables ageing analysis
Total
<1 year
1-2 years
2-3 years
>3 years
US$’000
US$’000
US$’000
US$’000
US$’000
-
6,754
-
1,978
6,754
1,978
-
6,629
-
1,116
6,629
1,116
-
380
380
-
316
316
-
4,396
4,396
-
-
-
-
1,492
-
3,705
1,492
3,705
The Group considers the probability of default upon the initial recognition of an asset. The Group also considers
whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period.
To assess whether there is a significant increase in credit risk the Company compares the risk of a default occurring
on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available
reasonable and supportive forwarding-looking information. In calculating the expected credit loss rates, the Group
has applied an expected credit loss based on industry provided information.
Fair Values
Set out below is a comparison by class of the carrying amounts and fair value of the Group’s financial instruments,
other than those with carrying amounts that are reasonable approximations of fair values as at 30 June 2021:
2021
2020
Carrying amount
US$’000
Fair value Carrying amount
US$’000
US$’000
Fair value
US$’000
Interest bearing
borrowings
loans and
-
Senior secured notes1
Total non-current
-
-
-
-
134,394
134,394
68,627
68,627
The Group uses various methods in estimating the fair value of a financial instrument. The methods comprise:
Level 1 The fair value is calculated using quoted prices in active markets.
Level 2 The fair value is estimated using inputs other than quoted prices included in Level 1 that are observable
for the asset or liability, either directly (as prices) or indirectly (derived from prices).
Level 3 The fair value is estimated using inputs for the asset or liability that are not based on observable market
data.
1 Paladin fully redeemed the US$115,000,000 senior secured notes in April 2021. The senior secured notes have
subsequently been cancelled and delisted and all security registrations have been discharged. Refer to note 7.
Paladin Energy Ltd
63
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 10.
FINANCIAL RISK MANAGEMENT (CONTINUED)
Fair Values (continued)
The fair value of the financial instruments as well as the methods used to estimate the fair value are summarised
in the table below:
Year ended 30 June 2021
Year ended 30 June 2020
(Level 1)
US$’000
(Level 2)
US$’000
(Level 3)
US$’000
Total
US$’000
(Level 1)
US$’000
(Level 2)
US$’000
(Level 3)
US$’000
Total
US$’000
Financial assets for which fair values are disclosed
Australia listed shares
Share receivables
Cash receivables
12,880
-
-
12,880
-
1,889
4,364
6,253
12,880
1,889
4,364
19,133
4,328
-
-
4,328
Financial liabilities for which fair values are disclosed
US$115M senior
secured notes1
-
-
-
-
-
-
68,627
68,627
-
-
-
-
-
-
-
-
-
-
-
-
-
1,467
4,623
6,090
4,328
1,467
4,623
10,418
-
-
68,627
68,627
Quoted market price represents the fair value determined based on quoted prices on active markets as at the
reporting date without any deduction for transaction costs. The fair value of the listed equity investments is based
on quoted market prices.
For financial instruments not quoted in active markets, the Group uses valuation techniques such as present value
techniques, comparison to similar instruments for which market observable prices exist and other relevant models
used by market participants. These valuation techniques use both observable and unobservable market inputs.
For financial instruments that are recognised at fair value on a recurring basis, the Group determines whether
transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest level
input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Capital Management
When managing capital, management’s objective is to ensure adequate cash resources to meet the Company’s
commitments are maintained, as well as to maintain optimal returns to shareholders through ensuring the lowest
cost of capital available to the entity.
The Company utilises a combination of debt and equity to provide the cash resources required. Management
reviews the capital structure from time to time as appropriate.
The Group finance function is responsible for the Group’s capital management, including management of long-
term debt and cash as part of the capital structure. This involves the use of corporate forecasting models which
enable analysis of the Group’s financial position including cash flow forecasts to determine the future capital
management requirements. To ensure sufficient funding for operational expenditure and growth activities, a range
of assumptions are modelled so as to provide the flexibility in determining the Group’s optimal future capital
structure.
1 The fair value has been determined using a valuation technique based on the quoted market price of the notes.
Paladin Energy Ltd
64
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 10.
FINANCIAL RISK MANAGEMENT (CONTINUED)
Capital Management (continued)
Debt (face value plus accrued interest)1
Less cash and cash equivalents
Net debt
Total equity
Total Capital
Gearing Ratio
(defined as net debt/total capital)
PERFORMANCE FOR THE YEAR
NOTE 11.
REVENUE
Sale of uranium
Total
2021
US$’000
-
(30,661)
2020
US$’000
145,745
(34,237)
(30,661)
111,508
246,708
92,999
216,047
204,507
0%
55%
2021
US$’000
2,985
2,985
2020
US$’000
-
-
During FY2021 the Company participated in a uranium spot trading opportunity.
Recognition and Measurement
Amounts disclosed as revenue are net of duties and taxes paid. The Group’s main source of revenue is the sale of
uranium, however the Group is in Care and Maintenance and consequently minimal revenue is being generated.
Revenue is measured based on the consideration specified in a contract with a customer. The Group’s sales
arrangements with its customers are pursuant to enforceable contracts that provide for the nature and timing of
satisfaction of performance obligations, including payment terms and payment due dates. Each delivery is
considered a separate performance obligation under the contract.
The Group recognises revenue when it transfers control over a good or service to a customer. The Group has
concluded that this occurs on the delivery of the product to the customer at the converter. When uranium is
delivered to converters, the converter will credit the Group’s account for the volume of accepted uranium. Based
on delivery terms in the sales contract with its customer, the converter will transfer the title of a contractually
specified quantity of uranium to the customer’s account at the converter’s facility. At this point, control has been
transferred and the Group recognises revenue for the uranium supply.
1 Excludes LHU’s loans from CNNC that were assigned by PFPL to CNNC and form part of CNNC’s 25% interest in
LHMHL as the Group views these as shareholder loans to LHU.
Paladin Energy Ltd
65
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 12.
INCOME AND EXPENSES
Cost of Sales
Inventory purchased
Total
Other Income
Other income
Foreign exchange gain (net)
Total
Foreign exchange loss (net)
Administration, Marketing and Non-Production Costs
Corporate and marketing
Corporate restructure costs
LHM mine site
LHM depreciation
LHM restructure costs
Other
Total
(Africa) Ltd sale consent
Finance Costs
Senior Secured Notes
LHU’s loans from CNNC
Paladin
Noteholders and other selling costs
Accretion expense relating to Senior Secured Notes
Mine closure provision accretion expense
Accretion expense on shareholder loan
Lease interest expense
Other finance costs
Total
fee
to
Total depreciation and amortisation expense
Recognition and Measurement
Borrowing Costs
2021
US$’000
(2,973)
(2,973)
2,452
-
2,452
(3,934)
(3,539)
(300)
(3,011)
(15,120)
-
(2,255)
(24,225)
(12,019)
(2,946)
-
(11,352)
(3,128)
(2,918)
(2)
(47)
(32,412)
(15,241)
2020
US$’000
-
-
2,027
8,279
10,306
-
(6,695)
(182)
(3,065)
(21,048)
(84)
(403)
(31,477)
(13,568)
(4,374)
(1,188)
(2,677)
(3,073)
-
-
-
(24,880)
(21,107)
Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that
is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed as
incurred including the unwinding of discounts related to mine closure provisions. When relevant, the capitalisation
rate used to determine the amount of borrowing costs to be capitalised is the weighted average interest rate
applicable to the entity's outstanding borrowings during the year.
Employee Benefits Expense
Wages and salaries
Defined contribution superannuation
Share-based payments
Other employee benefits
Total
2021
US$’000
(3,457)
(332)
(2,094)
(561)
(6,444)
2020
US$’000
(4,368)
(439)
(340)
(438)
(5,585)
The table above sets out personnel costs expensed during the year and are included within Administration,
Marketing and Non-Production Costs within the Consolidated Income Statement.
Paladin Energy Ltd
66
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 13.
INCOME AND OTHER TAXES
Income Tax Expense
Current income tax
Current income tax expense
Deferred income tax
Related to the origination and reversal of temporary differences
Income tax expense reported in the Income Statement
Amounts Charged or Credited Directly to Equity
Deferred income tax related to items charged or credited directly to
equity:
Fair value adjustment to CNNC Loans
Tax losses recognised to offset fair value adjustment
Income tax benefit reported in equity
Numerical Reconciliation of Income
Tax Benefit to Prima Facie Tax Payable
Loss before income tax expense from continuing operations
Tax at the Australian tax rate of 30% (2020 – 30%)
Difference in overseas tax rates
Non-deductible items
Under/over prior year adjustment
Tax losses utilised
Deferred tax assets on losses not recognised
2021
US$’000
2020
US$’000
151
-
151
(13,815)
13,815
-
-
-
-
-
-
-
(58,107)
(46,051)
17,432
4,899
1,356
-
13,815
3,530
99
(23,536)
(17,444)
Income tax expense reported in the income statement
151
-
Tax Losses
Australian unused tax losses for which no deferred tax asset has
been recognised1
Other unused tax losses for which no deferred tax asset has been
recognised2
Total unused tax losses for which no deferred tax asset has been
recognised
2021
US$’000
2020
US$’000
(87,014)
(72,154)
(380,039)
(381,546)
(467,053)
(453,700)
1 Including tax losses transferred from SRL on consolidation
2 Excluding tax losses from discontinued operation
Paladin Energy Ltd
67
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 13.
INCOME AND OTHER TAXES (CONTINUED)
Deferred Income Tax
Deferred tax liabilities
Accelerated prepayment deduction for tax purposes
Accelerated depreciation for tax purposes
Exploration expenditure
Inventory / Consumables
Asset disposal
Other
Gross deferred tax liabilities
Set off of deferred tax assets
Net deferred tax liabilities
Deferred tax assets
Revenue losses available for offset against future taxable income
Foreign currency balances
Interest bearing liabilities
Provisions
Other
Deferred tax assets not recognised
Gross deferred tax assets
Set off against deferred tax liabilities
2021
US$’000
(110)
(70,820)
(2,294)
(3,152)
-
-
(76,376)
76,376
-
88,293
45,582
29,269
8,085
2,750
(97,603)
76,376
(76,376)
2020
US$’000
(58)
(75,984)
(1,311)
(3,154)
(407)
(823)
(81,737)
81,737
-
112,670
65,955
21,322
4,174
64
(122,448)
81,737
(81,737)
Net deferred tax assets recognised
-
-
Paladin and all its wholly-owned Australian resident entities are part of a tax-consolidated group under Australian
tax law.
The net deferred tax assets recognised are in respect of revenue losses expected to be offset against future taxable
income.
This benefit for tax losses will only be obtained if:
1.
2.
3.
The Consolidated Entities derive future assessable income of a nature and of an amount sufficient to enable
the benefit from the deductions for the losses to be realised;
The Consolidated Entities continue to comply with the conditions for deductibility imposed by tax
legislation; and
No changes in tax legislation adversely affect the Consolidated Entities in realising the benefit from the
deductions for the losses.
Recognition and Measurement
Current income tax assets and liabilities for the current period are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantially enacted, at the reporting date in the countries where the Group operates
and generates taxable income.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement
of profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in
which applicable tax regulations are subject to integration and establishes provisions where appropriate.
Paladin Energy Ltd
68
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 13.
INCOME AND OTHER TAXES (CONTINUED)
Recognition and Measurement (continued)
Deferred tax assets and liabilities are recognised using the full liability method for temporary differences at the tax
rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are
enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative
amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An
exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No
deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction,
other than a business combination, that at the time of the transaction did not affect either accounting profit or
taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses. Current and
deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.
Deferred tax assets and liabilities are offset only if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the
same taxation authority.
NOTE 14.
EARNINGS PER SHARE
Loss per share attributable to ordinary equity holders of the
Parent from continuing operations
2021
US cents
2020
US cents
(2.0)
(1.7)
The following reflects the income and share data used in the basic and diluted earnings per share computations:
Net loss attributable to ordinary equity holders of the Parent from
continuing operations
2021
US$’000
2020
US$’000
(43,983)
(33,465)
2021
Number
of Shares
2020
Number
of Shares
Weighted average number of ordinary shares used in calculation
of basic earnings per share
2,201,765,877
1,966,201,370
Weighted average number of ordinary shares used in
calculation for diluted earnings per share
2,205,415,804
1,966,201,370
Total number of securities not included in weighted average
calculation due to their antidilutive nature in the current period,
that could potentially dilute basic earnings per share in the future
3,649,927
-
Recognition and Measurement
Basic Earnings Per Share
Basic earnings per share are calculated by dividing the profit attributable to equity holders of the Company by the
weighted average number of ordinary shares outstanding during the period.
Diluted Earnings Per Share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect associated with dilutive potential ordinary shares and the weighted average
number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary
shares. Diluted earnings per share is the same as basic earnings per share in 2021 and 2020 as the number of
potentially dilutive shares does not change the result of earnings per share.
Paladin Energy Ltd
69
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 15.
RECONCILIATION OF EARNINGS AFTER INCOME TAX TO NET CASH FLOW FROM OPERATING
ACTIVITIES
2021
US$’000
2020
US$’000
Reconciliation of Net Loss After Tax to Net Cash
Flows Used in Operating Activities
Net loss
(58,258)
(92,452)
Adjustments for
Depreciation and amortisation
Sundry income
Gain on disposal of property, plant and equipment
Net exchange differences
Share-based payments
Financing costs
Accretion expense on shareholder loan
Loss on sale of subsidiary
Changes in operating assets and liabilities
(Increase)/decrease in prepayments
Increase in trade and other receivables
Decrease in inventories
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions
Decrease/(increase) in assets classified as held for
sale
Increase in liabilities directly associated with assets
classified as held for sale
15,241
(1,015)
(12)
3,525
2,028
29,447
2,918
-
(37)
(128)
9
700
17
-
-
21,107
-
(8)
(1,111)
340
23,691
-
42,540
2
(5,274)
232
(809)
(175)
355
84
Net cash flows used in operating activities
(5,565)
(11,478)
Paladin Energy Ltd
70
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
OPERATING ASSETS AND LIABILITIES
NOTE 16.
TRADE AND OTHER RECEIVABLES
Notes
2021
US$’000
2020
US$’000
Current
Trade receivables and other receivables
GST and VAT
Total current receivables
Non-Current
Trade receivables and other receivables
Long term deposits
Total non-current receivables
A
B
A
C
1,877
101
1,978
4,396
380
4,776
1,057
59
1,116
5,197
315
5,512
A.
Trade receivables are non-interest bearing. Carrying value approximates fair value due to the short-term
nature of the receivables. Other receivables are amounts that generally arise from transactions outside the
usual operating activities of the group.
Future receivables from the Kayelekera Sale include:
• A$3M additional shares in Lotus Resources Limited due to be issued 13 March 2023;
• US$5M repayment of the environmental performance bond (US$2M due 13 March 2022 and US$3M
due 13 March 2023).
Future Shares - Changes in the fair value of financial assets at fair value through profit or loss are recognised
in other gains/(losses) in the statement of profit or loss as applicable.
Future cash receivables - An expected credit loss model is used for calculating an allowance for doubtful
debts. Details about the group’s impairment policies and the calculation of the expected credit loss are
provided in Note 10.
B.
C.
GST and VAT receivables relates to amounts due from Governments in Australia, Namibia and Canada.
Long term deposits relate to guarantees provided by a bank for the corporate office lease, tenements and
corporate credit cards.
Recognition and Measurement
Trade Receivables
Receivables are initially recognised at fair value and subsequently at the amounts considered receivable. Trade
receivables are amounts due from customers for goods sold or services performed in the ordinary course of
business. They are generally due for settlement within 30 days and therefore are all classified as current.
Due to the short-term nature of the current receivables, their carrying amount is assumed to approximate fair
value.
Other Receivables
These amounts generally arise from transactions outside the usual operating activities of the group.
Paladin Energy Ltd
71
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 16.
TRADE AND OTHER RECEIVABLES (CONTINUED)
The group assesses on a forward-looking basis the expected credit loss associated with its debt instruments carried
at amortised cost and fair value through other comprehensive income. The impairment methodology applied
depends on whether there has been a significant increase in credit risk.
For trade receivables, the group applies the simplified approach permitted by AASB 9, which requires expected
lifetime losses to be recognised from initial recognition of the receivables.
Trade receivables are written off where there is no reasonable expectation of recovery. Indicators that there is no
reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan
with the group, and a failure to make contractual payments for a period of greater than 120 days past due.
Impairment losses on trade receivables are presented as net impairment losses within operating profit. Subsequent
recoveries of amounts previously written off are credited against the same line item.
NOTE 17.
INVENTORIES
Current
Stores and consumables (at cost)
Total current inventories at the lower of cost and net realisable value
Inventory Expense
2021
US$’000
5,123
5,123
2020
US$’000
5,132
5,132
Uranium inventories sold recognised as an expense for the year ended 30 June 2021 totalled US$2,973,000 for the
Group. All inventory was purchased (2020: US$Nil).
Write-down of Inventories
During 2021 stores and consumables held at the LHM were written down by US$5,105 (2020: US$68,682) due to
obsolescence.
Recognition and Measurement
Consumable stores inventory are valued at the lower of cost and net realisable value using the weighted average
cost method, after appropriate allowances for redundant and slow moving items.
Finished goods and work in progress inventory are valued at the lower of cost and net realisable value using the
weighted average cost method. Cost is derived on an absorption costing basis, including both fixed and variable
production costs and attributable overheads incurred up to the delivery point where legal title to the product
passes. No accounting value is attributed to stockpiles containing ore at less than the cut-off grade.
The costs of production include labour costs, materials and contractor expenses which are directly attributable to
the extraction and processing of ore (including any recognised expense of stripping costs); the depreciation of
property, plant and equipment used in the extraction and processing of ore; and production overheads.
Significant Estimates and Assumptions
Net Realisable Value of Inventories
The Group reviews the carrying value of inventories regularly to ensure that their cost does not exceed net
realisable value. In determining net realisable value various factors are taken into account, including sales prices
and costs to complete inventories to their final form.
Paladin Energy Ltd
72
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 18.
DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE
1.
Description
FY2020 - Sale of Kayelekera Mine
On 13 March 2020, the Company completed the sale of its 85% interest in Paladin (Africa) Ltd to Lotus
Resources Limited (Lotus) (65%) and Lily Resources Pty Ltd (Lily) (20%). This is the Malawi operating segment
(refer to Note 5.
The consideration for the sale of Paladin’s 85% shareholding in PAL was A$5M (US$3.2M), comprising
A$200,000 (US$137,000) cash, A$4.8M (US$3.1M) in Lotus shares. On 13 March 2020 Lotus issued A$1.8M
(US$1.1M) shares to Paladin (90,000,000 shares), subject to a 12-month voluntary escrow, with A$3M of
shares (US$2.1M) to be issued on the third anniversary of completion, 13 March 2023. The issue price will
be based on the lower of the 30-day VWAP at the time of issue, or the price of a Lotus capital raising in the
90 days preceding. Paladin is entitled to receive a 3.5% royalty based on revenues derived from future
production at Kayelekera, capped at A$5M (US$3.4M).
On 13 March 2020, the Company became a substantial shareholder in Lotus, holding a 14.46% interest
following the issue of 90,000,000 shares at a 2cps issue price upon completion of the sale. Paladin holds a
9.43% interest at 30 June 2021.
Paladin is also entitled to receive the funds advanced to provide security for the US$10M environmental
performance bond issued to the Government of Malawi. The repayments will occur in four tranches: US$4M
on completion (13 March 2020), US$1M on the first anniversary (13 March 2021), US$2M on the second
anniversary (13 March 2022), and the final US$3M on the third anniversary (13 March 2023). At 30 June
2021 US$5M has been received by Paladin.
At 30 June 2020 - Future receivables from the Kayelekera Sale include:
• A$3M additional shares in Lotus to be issued on 13 March 2023;
• US$5M repayment of the environmental performance bond (US$2M due 13 March 2022 and US$3M
due 13 March 2023);
• A 3.5% production royalty derived from future production at the Kayelekera Mine, capped at A$5M.
2.
Financial performance and cash flow information of discontinued operations
(Loss)/profit after tax from discontinued operations
Other income
Change in estimate of KM mine closure provision
Care and maintenance expenses
Loss on sale of subsidiary after income tax
(Loss)/profit after tax from discontinued
operations
Cash Flows
Net cash outflow from operating activities
Net cash inflow from investing activities
Net decrease in cash and cash equivalents
2021
US$’000
-
-
-
-
-
-
-
-
2020
US$’000
188
-
(4,049)
(42,540)
(46,401)
(3,238)
-
(3,238)
Paladin Energy Ltd
73
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 18.
DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE
(CONTINUED)
3.
Details of the sale of the subsidiary
Consideration received or receivable
Cash
Fair value of Lotus shares issued1
Fair value of receivables – shares and cash2
Total disposal consideration
Carrying amount of assets sold
Carrying amount of liabilities sold
Gain on sale before income tax and de-recognition
of non-controlling interest in PAL
Derecognise non-controlling interest
Loss on sale after income tax
Recognition and Measurement
2021
US$’000
-
-
-
-
-
-
-
-
-
2020
US$’000
4,137
1,953
5,986
12,076
(10,474)
42,478
44,080
(86,620)
(42,540)
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use and a sale is considered highly probable.
They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as
deferred tax assets, assets arising from employee benefits, financial assets and investment property that are
carried at fair value and contractual rights under insurance contracts, which are specifically exempt from this
requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair
value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset
(or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not
previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date
of de-recognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they
are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified
as held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are
presented separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held
for sale are presented separately from other liabilities in the balance sheet.
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and
that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated
plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view
to resale. The results of discontinued operations are presented separately in the statement of profit or loss.
1 On 13 March 2020, the fair value of the 90M Lotus shares issued was A$0.034 per share. It has been recognised
as a financial asset with subsequent fair value movements recognised through Other Comprehensive Income.
2 The fair value of receivables has been assessed using a discount rate to reflect the credit risk and the time value
of money.
Paladin Energy Ltd
74
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 19.
NON-CURRENT FINANCIAL ASSETS
Non-current financial assets
2021
US$’000
2020
US$’000
12,880
4,328
The Group has an investment in Lotus Resources Limited and at 30 June 2021 held 90,000,000 shares (2020:
90,000,000 shares) subject to a 12-month voluntary escrow which expired on 13 March 2021. The market value of
these shares at 30 June 2021 is A$17.1M (US$12.9M) (2020: A$6.3M (US$4.3M)) based on a share price of A$0.19
(2020: A$0.07) per share.
Recognition and Measurement
Financial assets are recognised on trade date, being the date on which the group commits to purchase or sell the
asset.
Equity Instruments
The group measures all equity investments at fair value. Where the group’s management has elected to present
fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains
and losses to profit or loss following the derecognition of the investment. Dividends from such investments
continue to be recognised in profit or loss as other income when the group’s right to receive payments is
established.
Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the statement of profit
or loss as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at
FVOCI are not reported separately from other changes in fair value.
NOTE 20.
PROPERTY, PLANT AND EQUIPMENT
Total
Plant and
Equipment
Land and
Buildings
US$’000
US$’000
US$’000
Construction
Work in
Progress
US$’000
2021
Net carrying value
At 1 July 2020
Additions
Depreciation and amortisation expense
Disposals
Foreign currency translation
At 30 June 2021
Cost
Accumulated depreciation
2020
Net carrying value
At 1 July 2019
Additions
Depreciation and amortisation expense
Disposals
Foreign currency translation
At 30 June 2020
Cost
Accumulated depreciation
Paladin Energy Ltd
190,889
39
(12,819)
(38)
18
185,361
39
(12,455)
(38)
18
178,089
172,925
380,059
(201,970)
369,442
(196,517)
206,599
301
(15,451)
(551)
(9)
200,653
301
(15,033)
(551)
(9)
190,889
185,361
380,363
(189,474)
369,747
(184,386)
4,772
-
(364)
-
-
4,408
9,861
(5,453)
5,190
-
(418)
-
-
4,772
9,860
(5,088)
756
-
-
-
-
756
756
-
756
-
-
-
-
756
756
-
75
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 20.
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Property, Plant and Equipment Pledged as Security for Liabilities
Refer to Note 7 for information on property, plant and equipment pledged as security.
Recognition and Measurement
All property, plant and equipment are stated at historical cost less accumulated depreciation and impairment
losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. All other repairs and maintenance are charged to the Income Statement
during the financial period in which they are incurred.
Property, plant and equipment costs include both the costs associated with construction of equipment associated
with establishment of an operating mine, and the estimated costs of dismantling and removing the asset and
restoring the site on which it is located.
Land is not depreciated. Depreciation on other assets is calculated using the unit of production basis or the straight
line method to allocate their cost amount, net of their residual values, over their estimated useful lives, as follows:
• Buildings
• Databases
• Plant and equipment
20 years
10 years
2-6 years
• Leasehold improvements
period of lease
• Mine plant and equipment
remaining useful life of the assets
The estimates of useful lives, residual values and depreciation method are reviewed at the end of each reporting
period with the effect of any changes in estimate accounted for on a prospective basis.
Significant Estimates and Assumptions
Impairment of Property, Plant and Equipment; Mine Development and Intangibles
Property, plant and equipment; mine development and intangibles are tested for impairment whenever events or
changes in circumstances indicate that the carrying value may not be recoverable.
The Group conducts an internal review of asset values at each reporting date, which is used as a source of
information to assess for any indicators of impairment. Factors, such as changes in uranium prices, production
performance and mining and processing costs are monitored to assess for indicators of impairment. If any
indication of impairment exists, an estimate of the asset’s recoverable amount is calculated.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable
amount. Recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash inflows that are largely independent of the cash inflows from other assets or groups of assets
(cash-generating unit or CGU).
The future recoverability of the property, plant and equipment, mine development and intangibles is dependent
on a number of key factors including: uranium price, capex, life of mine, restart date, discount rates used in
determining the estimated discounted cash flows, foreign exchanges rates, tax rates, the level of proved and
probable reserves and measured, indicated and inferred mineral resources, future technological changes which
could impact the cost of production and future legal changes, including changes to environmental restoration
obligations.
Paladin did not identify any impairment indicators in relation to the Langer Heinrich Mine CGU.
Paladin Energy Ltd
76
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 21. MINE DEVELOPMENT
Mine development – at cost
Less accumulated depreciation and impairment
Net carrying value – mine development
Net carrying value at start of year
Depreciation and amortisation expense
Net carrying value at end of year
Recognition and Measurement
Mine development
2021
US$’000
63,091
(46,343)
16,748
18,548
(1,800)
16,748
2020
US$’000
63,091
(44,543)
18,548
22,958
(4,410)
18,548
Pre-production costs are deferred as development costs until such time as the asset is capable of being operated
in a manner intended by management and depreciated on a straight line basis. Post-production costs are
recognised as a cost of production.
Significant Judgements, Estimates and Assumptions
Proved and Probable Reserves
The Group uses the concept of a life of mine as an accounting value to determine such things as depreciation rates
and the appropriate period to discount mine closure provisions. In determining life of mine, the proved and
probable reserves measured in accordance with the 2012 edition of the JORC Code specific to a mine are taken
into account which by their very nature require judgements, estimates and assumptions.
Paladin Energy Ltd
77
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 22.
EXPLORATION AND EVALUATION EXPENDITURE
The following table details the expenditures on interests in mineral properties by area of interest for the year ended
30 June 2021:
Valhalla/Skal
Isa North
Carley Bore
Canada
Manyingee
Fusion
LHU
Total
Areas of interest
Balance 1 July 2019
Expenditure capitalised
Foreign exchange
differences
Balance 30 June 2020
Expenditure capitalised
Foreign exchange
differences
Balance 30 June 2021
US$’000
39,347
94
US$’000
7,201
342
US$’000
7,847
19
US$’000
28,676
436
US$’000
7,354
62
US$’000
98
61
US$’000
-
3,059
US$’000
90,523
4,073
-
39,441
-
7,543
-
7,866
(1,227)
27,885
-
7,416
-
159
-
3,059
(1,227)
93,369
79
259
51
510
108
69
2,167
3,243
-
39,520
-
7,802
-
7,917
2,945
31,340
-
7,524
-
228
-
5,226
2,945
99,557
Recognition and Measurement
Exploration and evaluation expenditure related to areas of interest is capitalised and carried forward to the extent
that:
1.
2.
Rights to tenure of the area of interest are current; and
Costs are expected to be recouped through successful development and exploitation of the area of interest
or alternatively by its sale.
Exploration and evaluation expenditure is allocated separately to specific areas of interest. Such expenditure
comprises net direct costs and an appropriate portion of related overhead expenditure directly related to activities
in the area of interest.
Costs related to the acquisition of properties that contain Mineral Resources are allocated separately to specific
areas of interest.
If costs are not expected to be recouped through successful development and exploitation of the area of interest,
or alternatively by sale, costs are expensed in the period in which they are incurred.
Exploration and evaluation expenditure that is capitalised is included as part of cash flows from investing activities,
whereas exploration and evaluation expenditure that is expensed is included as part of cash flows from operating
activities.
When a decision to proceed to development is made, the exploration and evaluation capitalised to that area is
transferred to mine development. All costs subsequently incurred to develop a mine prior to the start of mining
operations within the area of interest are capitalised and carried at cost. These costs include expenditure incurred
to develop new ore bodies within the area of interest, to define further mineralisation in existing areas of interest,
to expand the capacity of a mine and to maintain production.
Capitalised amounts for an area of interest may be written down to their recoverable amount if the area of
interest’s carrying amount is greater than their estimated recoverable amount.
Since 30 June 2020, there have been no events or changes in circumstances to indicate that the carrying value may
not be recoverable.
Paladin Energy Ltd
78
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 23.
INTANGIBLE ASSETS
At 30 June
Intangible assets – at cost
Less accumulated depreciation and impairment
Net carrying value – intangible assets
2021
US$’000
2020
US$’000
17,803
(9,491)
17,803
(8,972)
8,312
8,831
Amortisation of US$519,000 (2020: US$631,000) is included in non production costs in the Consolidated Income
Statement.
Movements in Intangible Assets
Movements in each group of intangible asset during the financial year are set out below:
2021
Net carrying value at 1 July 2020
Amortisation expense
Right to
Supply of
Power
US$’000
Right to
Supply of
Water
US$’000
Total
US$’000
2,473
(145)
6,358
(374)
8,831
(519)
Net carrying value at 30 June 2021
2,328
5,984
8,312
2020
Net carrying value at 1 July 2019
Amortisation expense
2,650
(177)
6,812
(454)
9,462
(631)
Net carrying value at 30 June 2020
2,473
6,358
8,831
Description of the Group’s Intangible Assets
1.
Right to supply of power
LHU has entered into a contract with NamPower in Namibia for the right to access power at the LHM. In
order to obtain this right, the power line connection to the mine was funded by LHU. However, ownership
of the power line rests with NamPower. The amount funded is being amortised on a straight line basis.
2.
Right to supply of water
LHU has entered into a contract with NamWater in Namibia for the right to access water at the LHM. In
order to obtain this right, the water pipeline connection to the mine was funded by LHU. However,
ownership of the pipeline rests with NamWater. The amount funded is being amortised on a straight line
basis.
Paladin Energy Ltd
79
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 23.
INTANGIBLE ASSETS (CONTINUED)
Recognition and Measurement
Intangible assets acquired separately or in a business combination are initially measured at cost. The cost of an
intangible asset acquired in a business combination is its fair value as at the date of acquisition. Following initial
recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated
impairment losses. Internally generated intangible assets, excluding capitalised development costs, are not
capitalised and expenditure is recognised in the Income Statement in the year in which the expenditure is incurred.
The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives
are amortised over the useful life and tested for impairment whenever there is an indication that the intangible
asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite
useful life are reviewed at least at each financial year-end. Changes in the expected useful life or the expected
pattern of consumption of future economic benefits embodied in the asset are accounted for prospectively by
changing the amortisation period or method, as appropriate, which is a change in accounting estimate. The
amortisation expense on the intangible assets with finite lives is recognised in profit or loss in the expense category
consistent with the function of the intangible asset.
A summary of the policies applied to the Group’s intangible assets is as follows:
Right to use water and power supply
Useful lives
Life of mine
Amortisation method used
Straight line method over the remaining useful life (16 years). The amortisation
method is reviewed at each financial year-end.
Impairment testing
Annually and more frequently when an indication of impairment exists.
NOTE 24.
TRADE AND OTHER PAYABLES
Current
Trade and other payables
Unearned Revenue
Total current payables
2021
US$’000
2020
US$’000
2,262
-
2,262
1,541
3
1,544
Trade payables are non-interest bearing and are normally settled on 30 day terms.
Recognition and Measurement
Trade and other payables are carried at amortised cost and represent liabilities for goods and services provided to
the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make
future payments in respect of the purchase of these goods and services. The amounts are unsecured and are
usually paid within 30 days of recognition.
Paladin Energy Ltd
80
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 25.
PROVISIONS
Current
Employee benefits
Total current provisions
Non-Current
Environmental rehabilitation provision
Total non-current provisions
Movements in Provisions
2021
US$’000
2020
US$’000
540
540
42,073
42,073
522
522
32,087
32,087
Movements in provisions during the financial year, excluding provisions relating to employee benefits, are set out
below:
At 1 July 2020
Unwinding of discount rate
Foreign currency movements
At 30 June 2021
2021
Current
Non-current
2020
Current
Non-current
Nature and Timing of Provisions
Environmental rehabilitation
Environmental Rehabilitation
US$’000
32,087
3,128
6,858
42,073
-
42,073
-
32,087
A provision for environmental rehabilitation and mine closure has been recorded in relation to the LHM. A
provision is made for rehabilitation work when the obligation arises and this is recognised as a cost of production
or development as appropriate. Additionally, the provision includes the costs of dismantling and demolition of
infrastructure or decommissioning, the removal of residual material and the remediation of disturbed areas specific
to the infrastructure to a state acceptable to various authorities.
Recognition and Measurement
Provisions
Mine closure and restoration costs include the costs of dismantling and demolition of infrastructure or
decommissioning, the removal of residual material and the remediation of disturbed areas specific to the
infrastructure. Mine closure costs are provided for in the accounting period when the obligation arising from the
related disturbance occurs, whether this occurs during the mine development or during the production phase,
based on the net present value of estimated future costs.
Paladin Energy Ltd
81
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 25.
PROVISIONS (CONTINUED)
Recognition and Measurement (continued)
As the value of the provision for mine closure represents the discounted value of the present obligation to restore,
dismantle and close the mine, the increase in this provision due to the passage of time is recognised as a finance
cost. The discount rate used is a pre-tax rate that reflects the current market assessment of the time value of
money and the risks specific to the liability. Foreign exchange movements are treated as a finance component and
recognised in the Income Statement.
Provision is made for rehabilitation work when the obligation arises, and this is recognised as a cost of production
or development. The rehabilitation costs provided for are the present value of the estimated costs to restore
operating locations. The value of the provision represents the discounted value of the current estimate to restore
and the discount rate used is the pre-tax rate that reflects the current market assessments of the time value of
money and the risks specific to the liability.
Employee benefits
Short-term benefits
Liabilities for short-term benefits, including wages and salaries, and accumulating sick leave expected to be settled
within 12 months of the reporting date are recognised as a current liability in respect of employees' services up to
the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities
for non accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.
Long Service Leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present
value of expected future payments to be made in respect of services provided by employees up to the reporting
date. Consideration is given to expected future wage and salary levels, experience of employee departures and
periods of service. Expected future payments are discounted using market yields at the reporting date on
corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash
outflows.
Significant Accounting Judgements, Estimates and Assumptions
Environmental rehabilitation provision
The value of this provision represents the discounted value of the present obligation to rehabilitate the mine and
to restore, dismantle and close the mine. The discounted value reflects a combination of management’s
assessment of the cost of performing the work required, the timing of the cash flows and the discount rate. A
change in any, or a combination, of the three key assumptions (estimated cash flows, discount rates or inflation
rates), used to determine the provision could have a material impact to the carrying value of the provision.
Paladin Energy Ltd
82
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
OTHER NOTES
NOTE 26.
KEY MANAGEMENT PERSONNEL
Details of Key Management Personnel
1
2
Directors
Chairman (Non-Executive)
Mr Cliff Lawrenson
Director (Non-Executive)
Mr Peter Watson
Mr Peter Main
Director (Non-Executive)
Ms Melissa Holzberger Director (Non-Executive)
Director (Non-Executive)
Ms Joanne Palmer
Executives
Mr Ian Purdy
Ms Anna Sudlow
Mr Jonathon Clements General Manager - Projects & Development
Mr Jess Oram
Mr Alex Rybak
Chief Executive Officer
Chief Financial Officer
General Manager Exploration (appointed 19 July 2021)
General Manager – Business Development & Marketing (appointed 19 July 2021)
Compensation of Key Management Personnel: Compensation by Category
Short-term employee benefits
Post-employment benefits
Share-based payments
NOTE 27.
AUDITORS’ REMUNERATION
The auditor of the Paladin Energy Ltd Group is PricewaterhouseCoopers.
Amounts
PricewaterhouseCoopers (Australia) for:
received or due and
receivable by
Audit or review of the financial report of the
consolidated Group
Other services
Taxation services:
Tax compliance services
International tax consulting
Other tax advice
Sub-total
Amounts received or due and receivable by related
practices of PricewaterhouseCoopers (Australia) for:
Audit or review of the financial report of
subsidiaries and audit related services
Other services
Taxation services:
Tax compliance services
Sub-total
Total
Paladin Energy Ltd
2021
US$’000
981,379
54,206
1,957,547
2020
US$’000
1,345,071
57,344
86,935
2,993,132
1,489,350
2021
US$’000
2020
US$’000
140,237
-
27,900
-
-
127,850
-
39,854
10,329
-
168,137
178,033
27,965
288
450
28,703
196,840
24,352
1,219
481
26,052
204,085
83
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 28.
COMMITMENTS AND CONTINGENCIES
There were no outstanding commitments or contingencies, which are not disclosed in the Financial Report of the
Group as at 30 June 2021 other than:
Tenements
Commitments for tenements contracted for at the
reporting date but not recognised as liabilities,
payable:
Within one year
Later than one year but not later than 5 years
More than 5 years
Total tenements commitment
2021
US$’000
2020
US$’000
90
681
493
1,264
41
987
539
1,567
These include commitments relating to tenement lease rentals and the minimum expenditure requirements of the
Namibian, Canadian, Western Australian and Queensland Mines Departments attaching to the tenements and are
subject to re-negotiation upon expiry of the exploration leases or when application for a mining licence is made.
These are necessary in order to maintain the tenements in which the Group and other parties are involved. All
parties are committed to meet the conditions under which the tenements were granted in accordance with the
relevant mining legislation in Namibia, Australia and Canada.
Other Commitments
Commitments for transport, capital, purchase order commitments, fuel and utilities and other supplies contracted
for at the reporting date but not recognised as liabilities, payable:
Within one year
Later than one year but not later than 5 years
More than 5 years
2021
US$’000
145
1,023
558
2020
US$’000
503
297
1,115
Total other commitments
1,726
1,915
In relation to the Manyingee Project, the re-negotiated acquisition terms provide for a payment of A$750,000
(US$564,899) (2020: A$750,000 (US$515,187)) by the Group to the vendors when all project development
approvals are obtained.
Bank Guarantees
As at 30 June 2021 the Group has outstanding US$123,549 (A$164,032) (2020: US$154,656 (A$225,145)) as a
current guarantee provided by a bank for the corporate office lease; a US$11,298 (A$15,000) (2020: US$92,734
(A$135,000)) guarantee for tenements and a US$48,958 (A$65,000) (2020: US$44,650 (A$65,000)) guarantee for
corporate credit cards.
Paladin Energy Ltd
84
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 29.
RELATED PARTIES
Key Management Personnel
The only related party transactions are with Directors and Key Management Personnel. Refer to Note 26. Details
of material controlled entities are set out in Note 30.
Loans from related parties – LHU’s loans from CNNC (refer to Note 8)
Non-Current
At 1 July 2020
Interest charged
Fair value adjustment to shareholder loan
Accretion expense
At 30 June 2021
Purchase of uranium
NOTE 30.
GROUP INFORMATION
Information Relating to Paladin Energy Ltd (parent)
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Accumulated losses
Option application reserve
Share-based payments reserve
Revaluation reserve
Total shareholders’ equity
Net loss after tax from operations
Total comprehensive loss
2021
US$’000
102,638
2,946
(39,759)
2,918
2020
US$’000
98,264
4,374
-
-
68,743
102,638
2,973
-
2021
US$’000
32,127
252,854
1,388
11,934
2020
US$’000
32,989
232,448
1,336
147,265
2,489,082
(2,813,872)
137
48,042
10,434
2,327,789
(2,293,279)
137
48,303
2,233
266,177
85,183
(41,141)
(41,141)
(12,149)
(12,149)
The financial information for the parent entity has been prepared on the same basis as the consolidated financial
statements, except as set out below.
Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial
statements of Paladin Energy Ltd. Dividends received from associates are recognised in the parent entity’s profit
or loss when its right to receive the dividend is established.
Details of Any Contingent Liabilities of the Parent Entity
Paladin has recognised a provision of US$42,073,000 for the LHM Environmental Trust Fund.
Paladin Energy Ltd
85
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 30.
GROUP INFORMATION (CONTINUED)
Tax Consolidation
Paladin and its 100% owned Australian resident subsidiaries formed a tax consolidated group (the Group) with
effect from 1 July 2003. Paladin is the head entity of the Group. Members of the Group have entered into a tax-
sharing agreement that provides that the head entity will be liable for all taxes payable by the Group from the
consolidation date. The parties have agreed to apportion the head entity’s taxation liability within the Group based
on each contributing member’s share of the Group’s taxable income and losses.
Investments in Material Controlled Entities
NAME
COUNTRY OF
INCORPORATION
PERCENTAGE
INTEREST HELD
Paladin Energy Minerals NL
Langer Heinrich Mauritius Holdings Ltd
Langer Heinrich Uranium (Pty) Ltd
Valhalla Uranium Pty Ltd
Summit Resources Ltd
Summit Resources (Aust) Pty Ltd
Paladin Energy Canada Ltd
Michelin Uranium Ltd
Paladin Canada Investment (NL) Ltd
Paladin Canada Holdings (NL) Ltd
Aurora Energy Ltd
Australia
Mauritius
Namibia
Australia
Australia
Australia
Canada
Canada
Canada
Canada
Canada
2021
%
100
75
75
100
100
100
100
100
100
100
65
2020
%
100
75
75
100
100
100
100
100
100
100
60
All investments comprise ordinary shares and all shares held are unquoted.
NOTE 31.
EVENTS AFTER THE BALANCE DATE
Since the end of the financial year, the Directors are not aware of any other matter or circumstance not otherwise
dealt with in this report, that has significantly or may significantly affect the operations of the Group, the results of
those operations or the state of affairs of the Group in subsequent periods.
Paladin Energy Ltd
86
Notes to the Consolidated Financial Statements (continued)
For the year ended 30 June 2021
NOTE 32.
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS
Accounting Standards and Interpretations issued but not yet effective
The following Australian Accounting Standards that have recently been issued or amended but are not yet effective
are relevant to the Group but have not been applied by the Group for the annual reporting period ending 30 June
2021:
Application date of
standard*
Application date for
Group*
1 January 2022
1 July 2022
Reference/ Title
Summary
Narrow scope amendments
issued for AASB 116, AASB
137, AASB 3 and Annual
Improvements made to
AASB 1, AASB 9, AASB 16
and AASB 141 (AASB 2020-
3)
The AASB has made
• Narrow scope amendments to
-
-
-
-
-
AASB 116 Property, Plant and
Equipment in relation to proceeds
before intended use
AASB 137 Provisions, Contingent
Liabilities and Contingent
Assets
in relation to onerous
contracts and the cost of fulfilling
a contract
AASB 3 Business combinations in
relation to references to the
Conceptual Framework, and
Annual improvements to AASB 16,
AASB 1, AASB 9 and AASB 141.
Classification of liabilities
as current or non-current
(AASB 2020-1, AASB 2020-
6)
The AASB
issued a narrow-scope
amendment to AASB 101 Presentation of
Financial Statements
that
liabilities are classified as either current or
non-current, depending on the rights that
exist at the end of the reporting period.
to clarify
1 January 2023
1 July 2023
* Designates the beginning of the applicable annual reporting period unless otherwise stated.
The Group has considered what impact these new Accounting Standards will have on the financial statements,
when applied next year, and have concluded that they will have no material impact.
The Group has elected not to early adopt these new standards or amendments in the financial statements.
For Standards and Interpretations effective from 1 July 2021, it is not expected that the new Standards and
Interpretations will significantly affect the Group’s financial performance.
Paladin Energy Ltd
87
Directors’ Declaration
1.
In the opinion of the Directors’ of Paladin Energy Ltd:
a) The consolidated financial statements and notes that are set out on pages 39 to 87, are in accordance
with the Corporations Act 2001, including:
i)
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2021 and of its
performance for the financial year ended on that date; and
ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations)
and the Corporations Regulations 2001.
b) The financial statements and notes also comply with International Financial Reporting Standards as
disclosed in Note 3 to the Financial Statements.
c) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
2. This declaration has been made after receiving the declarations required to be made in accordance with
section 295A of the Corporations Act 2001 for the financial year ending 30 June 2021 (section 295A
Declarations). The section 295A Declarations have been made by the Chief Executive Officer, Ian Purdy and
the Chief Financial Officer, Anna Sudlow.
Dated at Perth on 26th August 2021
On behalf of the board
_______________________________
Cliff Lawrenson
Chairman
Paladin Energy Ltd
88
Independent auditor’s report
To the members of Paladin Energy Ltd
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Paladin Energy Ltd (the Company) and its controlled entities
(together the Group) is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Group's financial position as at 30 June 2021 and of its
financial performance for the year then ended
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
•
•
•
•
•
•
•
the consolidated statement of financial position as at 30 June 2021
the consolidated statement of comprehensive income for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the consolidated income statement for the year then ended
the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840
T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
The Group owns uranium mining and exploration assets in Namibia, Canada and Australia.
Materiality
Audit scope
For the purpose of our audit we used overall Group
materiality of US$3.6 million, which represents
approximately 1% of the Group’s total assets.
We applied this threshold, together with qualitative
considerations, to determine the scope of our audit
and the nature, timing and extent of our audit
procedures and to evaluate the effect of misstatements
on the financial report as a whole.
We chose total assets as the benchmark because the
Group is not currently operating its assets which are
in the care and maintenance or exploration stage. The
use of total assets as a benchmark provides a level of
materiality which, in our view, is appropriate for the
audit having regard to the expected requirements of
users of the Group’s financial report.
We utilised a 1% threshold based on our professional
judgement, noting it is within the range of commonly
acceptable asset-related thresholds in the mining
industry.
Our audit focused on where the Group made
subjective judgements; for example, significant
accounting estimates involving assumptions and
inherently uncertain future events.
In establishing the overall approach to the Group
audit, we determined the type of work that needed to
be performed by the group engagement team and by
the component auditor in Namibia operating under
our instruction. We structured our audit as follows:
•
•
•
The component auditor performed audit
procedures on the financial information of
Langer Heinrich Uranium (Pty) Ltd.
The Group engagement team performed audit
procedures, as required due to their financial
significance, on the financial information of the
Group’s remaining subsidiaries.
The Group engagement team and component
auditor had active dialogue throughout the year
through discussions, review of audit working
papers and written instructions and reporting.
90
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the
Audit and Risk Committee.
Key audit matter
Revision of shareholder loan terms
(Refer to note 8) US68,743,000
On 1 January 2021 the shareholder loan facility
agreements between the Group’s 75%-owned
Namibian subsidiary Langer Heinrich Uranium (Pty)
Ltd and its shareholders were extended. The revised
terms and conditions of the facility agreements were
sufficiently different from previous terms and
conditions such that the new arrangements
constituted an extinguishment of the previous
facilities and the recognition, at fair value, of the new
facilities.
In accordance with AASB 9 Financial Instruments the
fair values of the loans under the revised facility
agreements were determined by applying a market
interest rate to the future cash flows arising from the
loans. The difference between these fair values and
the carrying amount of the loans at 1 January 2021
represents a non-cash contribution from owners and
has been recognised in equity.
This was a key audit matter due to the complexity of
the accounting requirements for debt modifications,
the judgement required to determine the fair value of
the revised loans and the significant adjustments to
the carrying value of the loans resulting from the
revision.
How our audit addressed the key audit
matter
We focused our work on assessing the
appropriateness of the accounting treatment for the
revised shareholder loan terms and our procedures
included:
•
•
•
•
•
•
obtaining the revised shareholder loan facility
agreements to assess the relevant changes in
terms and conditions
assessing the assumptions used by management
in determining whether the revision resulted in a
debt modification or extinguishment under AASB
9 Financial Instruments
assessing the reasonableness of the interest rate
used to calculate the fair value of the revised
loans
testing the mathematical accuracy of the
calculation of fair values of the revised loans
assessing the reasonableness of the calculation of
interest expense subsequent the revision on 1
January 2021
assessing the appropriateness of disclosures
relating to this matter in the financial report
91
Key audit matter
How our audit addressed the key audit
matter
Assessment of impairment indicators for
Langer Heinrich
(Refer to notes 5 and 20-23) US$207,967,000
We evaluated the Group’s assessment of whether
there were any indicators of asset impairment at
30 June 2021 for the Langer Heinrich CGU.
The Group performed an assessment for impairment
indicators as required by Australian Accounting
Standards for the Langer Heinrich Cash Generating
Unit (CGU) which is currently in care & maintenance.
As at 30 June 2021, the US$207,967,000 Namibian
segment non-current assets (comprising property,
plant and equipment, mine properties, exploration
and evaluation and intangible assets) are attributable
to the Langer Heinrich CGU. The Group concluded
that there were no impairment indicators.
This was a key audit matter due to the significant
carrying value of the Group’s Langer Heinrich CGU
and the judgements required and assumptions used in
determining whether there were any impairment
indicators.
Closure and rehabilitation provisions
(Refer to note 25) US$42,073,000
As a result of its mining and processing operations,
the Group is obliged to restore and rehabilitate the
environment disturbed by these operations.
Rehabilitation activities are governed by a
combination of legislative and licence requirements.
At 30 June 2021 the consolidated statement of
financial position included provisions for such
obligations of US$42.1 million.
This was a key audit matter given the determination
of these provisions required judgement in the
assessment of the nature and extent of future works to
be performed, the future cost of performing the
works, the timing of when the rehabilitation will take
place and economic assumptions such as the discount
and inflation rates applied to future cash outflows
associated with rehabilitation activities to bring them
to their present value.
We applied professional scepticism in our evaluation
of judgements made by the Group and our procedures
included:
•
•
•
•
•
comparing medium and long term uranium
pricing to external industry forecasts
comparing resource estimates to the most recent
Langer Heinrich Resource Statement
comparing foreign exchange and inflation rate
assumptions to current economic forecasts
assessing the Group's market capitalisation as an
indicator for impairment
assessing the reasonableness of the accounting
policy and method selected in light of the
Accounting Standards
We obtained the Group’s assessment of its obligations
to rehabilitate disturbed areas and the estimated
future cost of that work, which forms the basis for the
closure and rehabilitation provision calculations (the
model) for the Langer Heinrich mine. We evaluated
and tested key assumptions utilised in this model by
performing the following procedures:
•
•
•
•
comparing the rehabilitation costs being
estimated at Langer Heinrich to an external
expert’s assessment of the rehabilitation
obligation
examining supporting information for significant
changes in future cost estimates from the prior
year
assessing the timing of work to be performed by
comparison to mine plans and environmental
rehabilitation plans submitted to relevant
authorities
considering the appropriateness of the discount
and inflation rates utilised in calculating the
provision by comparing them to current market
consensus rates.
92
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 30 June 2021, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of
our auditor's report.
93
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 24 to 35 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the remuneration report of Paladin Energy Ltd for the year ended 30 June 2021
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
Justin Carroll
Partner
Perth
26 August 2021
94
Additional Information
Pursuant to the Listing Requirements of ASX as at 20 August 2021:
1. Distribution and number of holders
Range
1
1,001
5,001
10,001
100,001
-
-
-
-
-
1,000
5,000
10,000
100,000
maximum
Total Holders
1,512
3,281
1,679
3,873
828
11,173
No. of Shares
317,652
8,789,931
13,332,165
135,967,650
2,519,483,673
2,677,891,071
1,753 shareholders hold less than a marketable parcel of shares.
2. The twenty largest shareholders hold 79.09% of the total shares issued
Holder
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
NDOVU CAPITAL XII B V
BNP PARIBAS NOMINEES PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
NATIONAL NOMINEES LIMITED
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMS PTY LTD
HOPU CLEAN ENERGY (SINGAPORE) PTE LTD
UBS NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
BNP PARIBAS NOMINEES PTY LTD
WOODROSS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
EGP CONSULTING PTY LIMITED
SACHEM COVE SPECIAL OPPORTUNITIES FUND LP
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BRISPOT NOMINEES PTY LTD
No. of Shares
500,823,785
423,544,611
261,589,744
178,767,744
133,589,561
98,208,973
70,964,493
62,417,326
61,954,406
49,174,305
36,090,390
33,999,602
33,086,333
33,064,683
32,745,012
26,630,701
25,675,676
200,135,14
193,277,64
162,479,60
%
18.70
15.82
9.77
6.68
4.99
3.67
2.65
2.33
2.31
1.84
1.35
1.27
1.24
1.23
1.22
0.99
0.96
0.75
0.72
0.61
Substantial shareholders as disclosed in substantial shareholder notices given to the Company are as
follows:
Tembo Capital Mining Fund II LP and related entities
Paradice Investment Management Pty Ltd
2,117,916,583
79.09
3. Voting Rights
Ordinary Shares
For all shares, voting rights are one vote per member on a show of hands and one vote per share in a poll.
Share Appreciation Rights
There are no voting rights attached to share appreciation rights.
Performance Rights
There are no voting rights attached to performance rights.
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Additional Information (continued)
4.
Securities Subject to Voluntary Escrow
There are 57,000,000 PRs converted into ordinary shares that are subject to escrow.
5. Unquoted securities
Unlisted Share Appreciation Rights
The Company has 5,510,500 share appreciation rights on issue, issued in accordance with the Share Rights
Plan approved by shareholders. The number of beneficial holders of share appreciation rights totals 15.
Unlisted Performance Rights
The Company has nil performance rights on issue.
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Additional Information (continued)
Tenement information required by listing rule 5.20
Tenement
EPM 11898
EPM 13412
EPM 13413
EPM 13682
EPM 14040
EPM 14233
EPM 14694
EPM 14712
EPM 14821
EPM 14935
EPM 15156
MDL 507
MDL 508
MDL 509
MDL 510
MDL 511
MDL 513
M08/86
M08/87
M08/88
E08/1645
E08/1646
EL 6132
ML 140
ML 172
022147M
024697M
024995M
025621M
025641M
025649M
025651M
025658M
025675M
025676M
025677M
025678M
025680M
025681M
025932M
Location
QLD, Australia
QLD, Australia
QLD, Australia
QLD, Australia
QLD, Australia
QLD, Australia
QLD, Australia
QLD, Australia
QLD, Australia
QLD, Australia
QLD, Australia
QLD, Australia
QLD, Australia
QLD, Australia
QLD, Australia
QLD, Australia
QLD, Australia
WA, Australia
WA, Australia
WA, Australia
WA, Australia
WA, Australia
SA, Australia
Namibia, Africa
Namibia, Africa
NL, Canada
NL, Canada
NL, Canada
NL, Canada
NL, Canada
NL, Canada
NL, Canada
NL, Canada
NL, Canada
NL, Canada
NL, Canada
NL, Canada
NL, Canada
NL, Canada
NL, Canada
Ownership
20%
20%
20%
20%
0%
18%
20%
20%
20%
20%
20%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
7.5%
75%
75%
65%
65%
65%
65%
65%
65%
65%
65%
65%
65%
65%
65%
65%
65%
65%
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