Paladin jumps 5 pct as record output burnishes takeover appeal

Thu Feb 14, 2013 11:41am EST
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* Australia-based miner seen as possible Cameco target

* Output at African mines rises to record, costs drop

* Stock rises 5 pct on Toronto Stock Exchange

Feb 14 (Reuters) - Shares of Paladin Energy Ltd jumped 5 percent in midday Thursday on the Toronto Stock Exchange after the Australia-based uranium miner reported record quarterly and half-yearly production and lower costs at its African mines.

The news likely polishes Paladin's appeal as a takeover target for Canada's Cameco Corp, the world's largest publicly listed uranium producer, said Rob Chang, an analyst who covers metals and mining for Cantor Fitzgerald in Toronto.

In the past, Paladin's relatively high costs and low production at its uranium mines in Namibia and Malawi were negatives that may have given Cameco pause, he said.

"Paladin appears closer to solving these issues and if that is the case, it will look more appetizing for Cameco," Chang said.

Shares of Paladin, which has a market capitalization of $985 million, were up 5 percent at C$1.24 per share.

Cameco shares in Toronto edged up 0.4 percent to C$21.16.

($1=$1.00 Canadian) (Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Bernadette Baum)