Paladin faces irate investors in class action

Paladin Energy (ASX, TSX: PDN) says it will challenge a class action suit in Australia alleging the uranium producer’s output forecast misled investors.

The case filed with the Supreme Court of Victoria in Melbourne contends that Paladin made misleading representations and contravened its ASX continuous disclosure obligations between June 27 and Nov. 11, according to Paladin and Melbourne-based law firm Slater and Gordon.

“Paladin intends to strongly defend this claim,” the miner said in a statement.

The Perth, Australia-based company restarted its main producer, the Langer Heinrich mine in Namibia, in late 2023 after being on care and maintenance since 2018. The first official production guidance was announced on June 27 for the fiscal year 2025 (July 1, 2024, to June 30, 2025), projecting an output of 4 million to 4.5 million lb. of uranium oxide (U?O?). This guidance was later revised on Nov. 12 to 3 million to 3.6 million lb. due to operational challenges including variability in stockpiled ore and water supply disruptions.

Then last month Paladin withdrew its 2025 guidance entirely following unseasonal heavy rainfall that disrupted mining operations.

Shares in Paladin fell 2% to C$3.95 apiece in Toronto on Wednesday morning, giving it a market capitalization of about C$1.54 billion. They’ve traded in a range of C$3.34 to C$8.55 since they listed in Canada in December.

Ian Weatherlake

Paladin’s ASX share price dropped by 22% across two trading day after the Nov. 12 output downgrade, says Slater and Gordon. The firm is leading the class action seeking undisclosed damages on behalf of Ian Weatherlake, the trustee for the Ian Weatherlake Staff Superannuation Fund and the Ian Weatherlake Family Trust. Their assets aren’t publicly disclosed.

“This claim alleges that Paladin knew or ought to have known that its June guidance was unreasonably optimistic and there was a material risk it would not be met,” the law firm says. “We allege that the plaintiff and group members paid more for shares in Paladin than would have been the case had the company revealed the true situation and alternatively, that some group members would not have purchased shares at all.”

A timeline for the class action isn’t yet clear, Ian Hamilton, a Paladin spokesperson based in Toronto, said by email Wednesday. There’s nothing more to add to the company’s statement at this point, he said.

Investors who purchased Paladin shares between April 2, 2024, and Nov. 12, 2024, may be eligible to participate in the class action. Slater and Gordon has provided a registration form on its website for interested shareholders.

Fission takeover

In December, the Canadian government approved Paladin’s $1.1-billion all-share takeover of Fission Uranium after a three-month national security review since Chinese state-owned companies held stakes in both firms. The approval bars Paladin from selling uranium, sourced from the Patterson Lake South (PLS) project that Fission was developing, to end-users in China.

PLS is an advanced-stage project in Saskatchewan hosting the high-grade Triple R deposit. It is expected to produce about 9.1 million lb. of U?O? annually over a 10-year mine life starting in 2029, according to a 2023 feasibility study.

The company also holds the Michelin project in Newfoundland and Labrador, an advanced exploration project with a resource of 127.7 million lb. at 860 parts per million (ppm) U?O?. It has the potential for both open-pit and underground mining operations.

The Mount Isa project in Queensland, Australia, has a resource of 148.4 million lb. at 680 ppm U?O?, with potential for a 5 million to 7 million lb. a year open-pit mine. In Western Australia, the Manyingee and Carley Bore projects have a combined resource of 41.5 million lb. at 510 ppm U?O?, with potential for in-situ recovery mining methods.