ASX- and TSX-listed Paladin Energy has been served with a class action lawsuit in the Supreme Court of Victoria, with the plaintiffs alleging the uranium producer misled investors and breached its continuous disclosure obligations ahead of a major production downgrade last year.
Filed on April 16 by law firm Slater and Gordon, the claim centers on Paladin’s guidance regarding its flagship Langer Heinrich uranium mine, in Namibia.
The company had forecast production of 4.0-million to 4.5-million pounds of uranium concentrate for the 2025 financial year, at a cost of $28/lb to $31/lb, in an announcement to the ASX on June 27, 2024. That guidance was reiterated in subsequent updates in July and August.
However, on November 12, Paladin slashed its 2025 financial year forecast to between 3.0-million and 3.6-million pounds and withdrew all previous guidance, citing water supply disruptions and variable ore quality. Paladin shares fell 22% over the following two days, compounding a 15% drop in late October after weaker-than-expected quarterly production results.
The class action alleges that Paladin knew or ought to have known its earlier forecasts were overly optimistic, and that there was a material risk they would not be met. According to the claim, shareholders who bought Paladin stock between June 27 and November 11, 2024, paid inflated prices or would not have invested at all had the company disclosed the operational risks earlier.
The proceeding has been initiated by Ian Weatherlake, on behalf of the Weatherlake Family Trust, representing affected shareholders during the five-month period in question. Slater and Gordon allege breaches of the Corporations Act 2001 and the ASIC Act 2001.
In a statement, Paladin said it “intends to strongly defend this claim”.