Langer Heinrich Cost Disaggregation Deep Dive

Research evidence excerpt

Langer Heinrich Cost Disaggregation Deep Dive

Australia | Metals & Mining

Paladin Energy Ltd EquityJuneResearch18, 2026

TARGET | ESTIMATE CHANGELanger Heinrich Cost Disaggregation Deep

RATING HOLDDive

PRICE AUD10.65^

LHM has beaten initial FY26 expectations, but the next phase gets harder as

AUD11.00 (AUD12.00) |

MG3 stockpiles roll off and feed shifts to primary J-pit ore. We see a lower PRICE TARGET | % TO PT +3%

production denominator, higher mine movement / haulage intensity and 52W HIGH-LOW AUD15.10 - AUD6.03

diesel pressure lifting Q4/FY27 costs, partly masked by elevated capitalised FLOAT (%) | ADV MM (USD) 98.2% | 23.97

stripping offsets to headline COP. We expect July FY27 guidance to reset MARKET CAP AUD4.8B | $3.4B

LoM confidence below the 6.0Mlb p.a. nameplate profile. Reiterate HOLD, TICKER PDN AU

PT AUD11.00. ^Prior trading day's closing price unless otherwise

noted.

Asymmetric ramp-up risk into FY27. LHM has recovered well from FY25 disruptions (weather, RATING HOLD

stockpile grade variability and delayed fleet delivery), with YTD FY26 production of 3.59Mlb

TICKER PDN CN

and Q3 production of 1.29Mlb, ahead of the original FY26 ramp assumptions. Revised FY27

guidance implies an ~18% QoQ decline in Q4 FY26 as production benefits from remaining MG3 PRICE C$10.51^

stockpile material transitions to more J-pit primary ore. Mining has transitioned to the J-pits in PRICE TARGET | % TO PT C$12.00 | +14%

Q4, introducing higher stripping, longer haulage and diesel intensity, alongside increased clay-

related risks across ore handling, dilution, beneficiation, leach kinetics and recovery. We model FY (Jun) CHANGE TO JEFe JEF vs CONS

Q4 production of 1.11Mlb 5% below VAe of 1.17Mlb, and FY27 at 5.34Mlb 4% below VAe of 2026 2027 2026 2027

5.54Mlb.