Paladin stock jumps after selling uranium mine stake

Mon Jan 20, 2014 10:25am EST
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By Rod Nickel

Jan 20 (Reuters) - Shares of Paladin Energy Ltd jumped as much as 9 percent in Toronto on Monday after the Australian uranium producer agreed to sell a stake in its Namibia mine.

Investors later pared gains to up 3.6 percent at 57 Canadian cents in early trading.

Paladin agreed to sell a 25 percent stake in the Langer Heinrich mine for $190 million to China Uranium Corporation Limited, a subsidiary of China National Nuclear Corporation (CNNC), the company said on Sunday. The deal includes an agreement allowing CNNC to buy its share of uranium production at the spot market price.

The sale requires certain Chinese regulatory approvals that are expected by mid-2014.

Paladin Chief Executive John Borshoff said the company will use cash from the deal mainly to reduce debt.

Shares of Paladin and Canadian uranium producer Cameco Corp have climbed since Japan's trade ministry last week said it would approve a revival plan for the utility responsible for the Fukushima nuclear disaster, Tokyo Electric Power Co .

($1=$1.09 Canadian) (Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Stephen Powell)