Paladin Energy's (ASX:PDN) recovery at its Langer Heinrich mine in Namibia following heavy rainfall is expected to trigger additional operational expenditure, according to a Friday report by the Australian, citing financial services group Macquarie.
Last week, the company said that severe weather affected access to the mine, forcing it to halt all operations.
On Wednesday, PDN said it does not expect the mine to achieve its run-rate guidance of 6 million pounds of uranium by the end of the year and withdrew its full fiscal year production guidance for the mine.
Macquarie analyst Mark Wiseman noted that the company's contract flexibility will enable it to avoid invoking force majeure clauses in its customer contracts, despite having the option to do so in the event of extreme disruptions, such as the heavy rainfall in Namibia.
This flexibility ensures that Paladin will not need to turn to the spot market, where any potential losses would be "immaterial," Wiseman added.
The firm updated Paladin's rating to outperform but lowered its price target to AU$8.25.
Shares of the company fell 2% in recent Friday trade.
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