"We all regard this as a temporary situation," Borshoff said on a teleconference this morning.

The uranium price is hovering around $28/lb, a more than five-year low.

"One of the main drivers of the 16% year-to-date spot price decline in uranium is continued weak demand," Macquarie said in a report overnight.

"Quite simply, the market continues to suffer from huge inventories and high levels of contract coverage."

But Borshoff says there will be major supply shortages in the coming decade with no incentive for producers to bring on new supply.

"The looming shortfall is worrying," he said.

Low prices prompted Paladin to put its Kayelekera mine in Malawi on care and maintenance during the March quarter.

The company says a uranium price in the $70s will be required before considering bringing it back online.

March quarter production for Kayelekera and the Langer Heinrich mine in Namibia increased by 5% over the same period in 2013 to 2.08 million pounds of uranium oxide.

Cash costs continued to fall, by 3% at Langer Heinrich to $29/lb and by 17% at Kayelekera to $32.90/lb.

Combined production for the nine months to the end of March was 6.34Mlb, up 4% over the previous period.

Borshoff said today that despite the closure of Kayelekera, Paladin was on track to meet the upper end of its revised full-year guidance of 7.8-8Mlb uranium oxide.

The company posted an $11 million loss for the March quarter, taking losses for the nine months to $274.9 million.

Revenue was $259.6 million for the nine months for 6.85Mlb sold at an average price of $37.90/lb.

Paladin made strong progress in the March quarter, refinancing its project facilities and selling a 25% stake in Langer Heinrich for $190 million.

"The March quarter has been a pivotal period for Paladin," Borshoff said.

"It has set the path for stabilising the company."

Paladin has received a $20 million deposit for the Langer Heinrich sale and expects the deal to be completed by June 30.

Proceeds will be used to repay debt.

Shares in Paladin dropped 0.7% to A43.2c.