PDN shares opened ~20% down this morning following a weak quarterly report. Langer Heinrich had produced 0.64Mlb of U3O8 at the end of the quarter. This was lower than market expectations and issues were flagged relating to stockpile variability and process plant equipment. Argonaut anticipates these problems will continue to impact Langer Heinrich’s performance through until at least the end of December quarter. The departure of two company Directors in quick succession is ill timed. We believe it is unlikely that PDN will achieve production guidance this financial year (100% basis Langer Heinrich production of 4-4.5Mlbs). Closure of the Fission Energy deal is expected to provide PDN with a quality secondary asset for development in the long term. Resolution or improvement to stockpile grade variability, recovery and equipment issues will be vital in the December quarter.
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