Capacity at the Langer Heinrich mine in Namibia is due to be expanded to 3,7 million pounds a year by the end of December, Perth-based Paladin said yesterday in a statement to the Australian stock exchange.

Production at the US$200 million Kayalekera project in Malawi will start ramping up in January toward the planned 3,3 million pounds a year rate.

Paladin started up its first operating mine at Langer Heinrich near Swakopmund in late 2006 and sold 1,4 million pounds of uranium oxide in the year, missing its original output target of 2,6 million pounds because of a slower ramp-up of the operation.

A proposed third phase of expansion would further increase capacity to six million pounds a year.

The company started buying uranium for its trading unit, Paladin Nuclear Ltd., purchasing 530 000 pounds for US$31,8 million.

The product "will be retained for future transactions by Paladin Nuclear,"' it said.

Paladin reported a full-year loss of US$36 million, compared with a US$37.6 million loss a year earlier, as financing costs almost tripled.

The net loss decreased each quarter of the year as gross profits rose at Langer Heinrich, it said.

The average sales price of uranium in the year was US$66 a pound.

Sales jumped to US$101,9 million in the 12 months ended June 30, from US$11,2 million.

Paladin fell for the first time in five days in Sydney trading, dropping 12 cents, or 2,1 per cent, to A$5.48.

The company last month cut its forecast for 2008 production to as low as 2,45 million pounds from an earlier guidance of 2,6 million.

Bloomberg

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