TSX Commentary

Paladin Energy Ltd. (PDN) – $3.46 – Re-Plumbing the Pipeline: Reducing Target to $4.50/sh
Outperform, Above Average Risk, Price Target: $4.50 (prev. $5.00)
On February 16, 2010, Paladin held a conference call to discuss its financial and operating results, previously released on February 11, 2010. Adjusted EPS for the quarter was $0.01, in-line with both RBC CM’s estimate and the consensus estimate. According to management, the changes that have been made at Kayelekera are allowing the company to bring the mine to nameplate capacities. Management expects the improvements to allow Kayelekera to ramp up to nameplate by the end of March 2010. Given the recent operating history at Kayelekera RBC CM is maintaining a more conservative ramp-up whereby Kayelekera sustainably reaches its nameplate capacity by the end of June 2010. Management reported that Stage 3 development is well under way at Langer Heinrich with the earthworks almost complete and civil works set to start. RBC CM has forecast Stage 3 will reach nameplate capacity in September 2011 (with the ramp up beginning in December 2010). RBC CM has made fairly significant changes to its production forecasts for Paladin driven by the two year delay of the start of the Valhalla project. Based on these changes, RBC CM’s NAV estimate for Paladin has fallen to A$2.89 per share from A$3.46 per share.