Paladin and Toro AGMs

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By Mia Pepper

The overall theme of both the Paladin and Toro Annual General Meetings was the dire financial situation of the uranium price, finances of the respective companies and the future of the nuclear industry. There were forward looking and overly optimistic predictions about a uranium supply shortfall and Japan restarting reactors. Our focus this year was on bringing some reality about the future of nuclear into these forums.

Paladin: Charles Roche and Mia Pepper from MPI attended the meeting with proxies from an activist shareholder. Paladin’s AGM had a sombre mood with a number of irate shareholders who were sitting through yet another AGM with more promises and even more broken promises from the year before. There was some boasting about their success in increasing production rates at the Kayelekera and Langer Heinrich mines in Africa. This was no comfort given that the increase in production and better performance at the mine site has coincided with a slump in the share price of the company and the company is still bogged down in debt with no relief in the short term and returning a $173 million loss. They estimate they will reduce their overall debt to $730million by 2014 and have plans to cut their production costs between $60-$80million per annum, through cuts to mining, non essential drilling, discretionary spending and ‘contractor rationalisation’. Questions from MPI were focused on the financial situation facing the company, the global decline in the nuclear industry exacerbating Paladin’s fragile position and what contingency and capacity there is to fund mine closure at Kayelekera and Langer Heinrich mines.  We were assured that mine closure is a concern among the management team and that within the company there are people advocating for mine closure to be considered in more detail. It remains unclear if there is money set aside for closure and how much. They have no intention of making mine closure costs public.  

Toro: MPI bought shares in Toro in 2012 with funds raised specifically for this purpose – we appointed proxies to Dave Sweeney from the Australian Conservation Foundation and Vicki McCabe from the region around Toro’s proposed uranium mine at Wiluna. There were some hard hitting protests in Perth, Adelaide and Darwin to coincide with the AGM with a focus on mine closure costs and uranium transport through Adelaide and Darwin. In Adelaide alternative annual reports where distributed to shareholders. At their AGM Toro announced that they have formally delayed the expected date of a final investment decision (FID) for the Wiluna project. Previously FID was targeted for the first half of 2013 – at the meeting Toro’s Greg Hall confirmed that due to uranium price weakness and financing issues there will be no FID until late 2013. Data from a short drilling program defining geotechnical conditions in the area of the proposed in-pit tailings storage facility is set to form the basis of the TSF design work. This work is not expected to be completed before the end of March 2013. CCWA and ACF who are campaigning on this project believe that there should be no further state or federal approval ahead of design details of such a key piece of project architecture and are making that case to the relevant Government departments. Toro will be focussing 2013 efforts on addressing financing constraints – the company is actively seeking project buy in from “predominately Asian based nuclear utilities or trading groups” (Greg Hall at AGM). In essence – Toro lack the financial capacity to develop the project, continue to have incomplete project data and design details and are awaiting federal approval in order to increase the likelihood of foreign buy in to the project.