Toronto and Australia listed Paladin Energy Ltd (ASX:PDN) is a uranium producer with assets in Namibia, Malawi, Australia and Canada.
Perth-broker Hartleys rates the firm a 'speculative buy', with a A$0.35 12-month price target.
Last month, the group unveiled plans to sell 24% of the Langer Heinrich uranium mine in Namibia and up to 75% stake of its Manyingee project in Western Australia in transactions, which stand to raise over $200 million
The broker reckons the market remains sceptical that Paladin Energy Limited (PDN) will be able to consummate the announced sale of a further 24% interest in the Langer Heinrich uranium mine (LHM).
But it notes that given the buyer is the same Chinese counterparty that purchased a 25% interest in LHM in 2014, it would be reasonable to assume a shorter due diligence and approval process this time around.
The broker also reckons its highly unlikely that the transaction will require FIRB approval because the asset is in Namibia and sits in a Mauritian subsidiary.
Paladin guides that settlement of the sale will happen before the end of 2016.
The broker notes its previous valuation of Paladin’s 75% share of LHM was US$884mln.
"We therefore value a 24% stake in LHM at US$283m...."
Importantly, completing the sale to CNNC would reduce net debt from US$341m at the end of June to US$117m, it notes.
"The key risk to our recommendation remains a delay in completing the sale of the 24% interest in LHM meaning the US$212m convertible bond that comes due in March 2017 will need to be refinanced by alternative means," adds the broker.