Paladin Energy (ASX: PDN) has entered a memorandum of understanding with China's biggest nuclear power company Guangdong Nuclear Power.
The Perth based company has been negotiating this long term sales and growth opportunity for longer than a year.
As per the deal with the company Guangdong Nuclear Power, Paladin Energy will expand a potential joint venture in Northern Territory with Energy Metals. Energy Metals is owned 69.3 % by Guangdong and will partner with Paladin on the Bigrlyi Uranium project.
The Bigrlyi Project comprises ten granted exploration retention licences located approximately 390km northwest of Alice Springs in Australia’s Northern Territory. The licences cover 1,414 hectares on the Mount Doreen Cattle Station 80km west of the Yuendumu Aboriginal township.
Soon after the announcement shares in Paladin hit a three month high at $4.09. John Borshoff the chief executive of Paladin said that the deal would provide a platform from which Paladin could build on its growth even though the deal was non exclusive.
With both China and India looking to expand nuclear power capacity to cut carbon emissions and reduce use of oil and coal the demand for uranium is set to rise. The Uranium producing Paladin Energy Ltd is expecting China's demand to rise to 20,000 tons a year by 2020.
Diamond drilling Bigrlyi Project, NT, Australia. Image Credit: © Paladin Energy Ltd