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A class action has accused mining company Paladin Energy Limited of providing “unreasonably optimistic” guidance to shareholders.
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Paladin Energy Limited, a West Australian uranium production company, was accused of providing investors with an “optimistic” view of its future mining activities at a time when it knew there were material risks in the way of it meeting those targets.
Slater & Gordon’s practice group leader, Nathan Rapoport, alleged that had the “true information” been available, group members would have acquired shares at a lower price or not at all.
“When investors purchase shares in a listed company, they are entitled to assume that all of the material information relevant to that company’s financial position and prospects has been disclosed.
“For shareholders of Paladin, this was not the case,” Rapoport said.
Paladin said it intends to “strongly defend this claim”.
According to the claim, filed in the Victorian Supreme Court, Paladin advised the Australian Securities Exchange (ASX) that its Langer Heinrich Mine was likely to produce 4 million to 4.5 pounds of uranium concrete in FY2024–25, at a cost of US$28 to US$31 per pound.
Despite Paladin reaffirming this to investors on 22 July and 5 August last year, the mining company’s quarterly production results, released in October, were below expectations. Slater & Gordon said this caused the price of its shares to drop by 15 per cent.
On 12 November, Paladin completely withdrew its previous guidance and said it expected the mine to produce 3 million to 3.6 million pounds, which saw its shares plummet by a further 22 per cent over two days.
It cited disruptions to the mine’s water supply and variability in the quality of its stockpiled ore as a reason for the downgrade.
“Paladin knew or ought to have known that its June guidance was unreasonably optimistic and was never going to be met,” Rapoport said.
“We allege that the company was aware of material risks to its uranium production targets well before it disclosed these to the ASX.”
Slater & Gordon said it intends to apply for a group costs order.
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Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
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