Uranium One Announces
115% Increase in Revenue and 19% Lower Cash Costs for 2010
VANCOUVER and JOHANNESBURG,
South Africa, March 8 /CNW/ - Uranium One Inc. ("Uranium One") today
reported record revenue of $327 million for 2010 based on sales of 6.9 million
pounds at an average realized sales price of $48 per pound. Total cash
costs for 2010 were $13 per pound sold. Uranium One
also reported strong earnings from mine operations of $137 million for 2010,
149% higher compared to 2009.
Highlights
Operational Results
- Total
attributable production during 2010 was a record 7.4 million pounds, 106%
higher than total attributable production of 3.6 million pounds
during 2009.
- The
average total cash cost per pound sold was $13 per pound during 2010,
compared to the average cash cost per pound sold of $16 per pound during
2009.
2010 Financial Results
- Attributable
sales volumes for 2010 increased by 116% to a record 6.9 million pounds,
compared to 3.2 million pounds sold during 2009.
- Revenue
increased by 115% to a record $327 million in 2010, compared to $152
million in 2009. The average realized sales price during both 2009 and
2010 was $48 per pound. The
average spot price in 2010 was $47 per pound.
- Earnings
from mine operations were $137 million during 2010, a 149% increase from
earnings from mine operations of $55 million in 2009, due to
increased sales volumes and decreased operating expenses.
- Attributable
inventory was 3.0 million pounds in December 31, 2010, compared to 2.1
million pounds at December 31, 2009.
- The
carrying value of the Honeymoon Uranium Project was written down by $113.5
million, caused by the strengthening of the Australian dollar and
increased capital expenditures.
Corporate
- On
December 27, 2010 Uranium One completed the ARMZ transaction, under which
the company acquired a 50% interest in the Akbastau Uranium Mine, and a
49.67% interest in the Zarechnoye Uranium Mine, as well as $610 million in
cash.
- In
connection with the ARMZ transaction, on December 20, 2010 the Corporation
paid a special dividend of $1.06 per share to all shareholders other than
ARMZ.
- New
director - Mr. Peter Bowie, former Chief Executive Officer of Deloitte
China and former Chairman of Deloitte Canada, was appointed to Uranium
One's board of directors on closing of the ARMZ transaction.
- Management
changes - Mr. Vadim Zhivov, Director General of ARMZ and a director of
Uranium One, was appointed President of Uranium One on closing of the ARMZ
transaction. Mr. Chris Sattler was appointed as the Chief Executive
Officer on February 1, 2011.
- On
December 15, 2010, following ARMZ's announcement that it had entered into
a definitive agreement to acquire Mantra Resources Limited
("Mantra"), Uranium One and ARMZ jointly announced that the two
parties had entered into an option agreement for Uranium One to acquire
Mantra from ARMZ.
Chris Sattler, CEO of
Uranium One commented:
"After an excellent
year in 2010 for Uranium One, I am looking forward to continued strong results
in 2011. With a resurgence in the price of uranium, I
am particularly excited about Uranium One's position as a low cost producer
with a high degree of leverage to the uranium price. Our goals for 2011 are
much the same as they were last year - to continue to deliver on our production
and cost targets and to continue to add quality assets to our portfolio."
Outlook
The total attributable
production guidance for 2011 is 10.5 million pounds, consisting of 1.8 million
pounds from Akdala; 3.4 million pounds from South Inkai; 2.4 million pounds
from Karatau; 1.2 million pounds from Akbastau; 1.0 million pounds from
Zarechnoye; 0.3 million pounds from the Powder River Basin; 0.2 million pounds
from Honeymoon; and 0.2 million pounds from Kharasan.
During 2011, the
average cash cost per pound sold for the company is expected to be approximately
$18 per pound, based on $14 per pound at Akdala, $19 per pound at South Inkai,
$12 per pound at Karatau, $18 per pound at Akbastau, $21 per pound at
Zarechnoye, $25 per pound at the Powder River Basin, and $35 per pound at
Honeymoon.
Uranium One
expects attributable sales to be approximately 9.5 million and 12.0 million
pounds in 2011 and 2012, respectively.
Attributable capital
expenditures for 2011 are expected to be $78 million for wellfield development,
$21 million for resource definition drilling and $144 million for plant and
equipment, totalling $243 million.
In 2011, general and
administrative expenses (excluding non-cash items) are expected to be
approximately $37 million, restructuring and other non-recurring costs are
expected to be $7 million, and exploration expenses are expected to be
$7 million.
Operations and Projects
Results for Uranium One's
operations and projects during 2010 were:
- The
Akdala Uranium Mine achieved attributable
production of 1.9 million pounds; total cash costs were $12 per pound
sold.
- The
South Inkai Uranium Mine achieved attributable
production of 3.1 million pounds; total cash costs were $19 per pound
sold.
- The
Karatau Uranium Mine achieved attributable
production of 2.2 million pounds; total cash costs were $9 per pound sold,
which was lower than expected due to deferred operational expenditure.
- The
Akbastau Uranium Mine's attributable production
was 16,700 pounds since the acquisition date of December 27, 2010.
- The
Zarechnoye Uranium Mine's attributable production
was 16,300 pounds since the acquisition date of December 27, 2010.
- The
Kharasan Uranium Project's attributable production during the
commissioning process was 0.2 million pounds during 2010.
- The
Willow Creek ISR Project in Wyoming began commissioning activities on
December 20, 2010 and production has commenced.
2010 Financial Review
Revenue of $327 million in
2010 increased by 115% compared to $152 million in 2009, due to higher sales
volumes.
Operating expenses per
pound sold decreased by 19% to $13 per pound in 2010 compared to $16 per pound
in 2009.
Earnings from mine
operations increased to $137 million in 2010, a 149% increase from $55 million
in 2009 due to increased sales volumes and decreased operating expenses.
Attributable inventory as
at December 31, 2010 was 3.0 million pounds, which includes work in progress as
well as finished product ready to be shipped or in transit.
The adjusted net loss for
2010 was $12 million, or $0.02 per basic share compared to the adjusted net
loss for 2009 of $36 million, or $0.08 per basic share.
Consolidated cash and cash
equivalents were $316 million as at December 31, 2010 and working capital was
$199 million as of the same date.
FINANCIAL
SUMMARY
|
Q4
2010
|
Q4 2009
|
2010
|
2009
|
Attributable
production (lbs) (1)
|
2,038,400
|
1,151,200
|
7,230,200
|
3,474,800
|
Attributable
sales (lbs) (1)
|
2,878,400
|
1,498,900
|
6,861,600
|
3,187,700
|
|
|
|
|
|
Average realized sales price ($ per lb) (2)
|
53
|
46
|
48
|
48
|
Average cash cost of production sold ($
per lb)(2)
|
12
|
15
|
13
|
16
|
Revenues
($ millions)
|
152.3
|
69.1
|
326.9
|
152.0
|
Earnings from mine operations ($ millions)
|
76.3
|
22.7
|
137.4
|
54.6
|
Net loss from continuing operations ($ millions)
|
(148.2)
|
179.6
|
(189.7)
|
(38.1)
|
Loss per share from continuing operations - basic
and diluted ($ per share)
|
(0.24)
|
0.38
|
(0.31)
|
(0.08)
|
Earnings from discontinued operations ($ millions)
|
-
|
-
|
-
|
2.0
|
Earnings per share from discontinued operations -
basic and diluted ($ per share)
|
-
|
-
|
-
|
0.00
|
Net
loss ($ millions)
|
(148.2)
|
179.6
|
(189.7)
|
(36.1)
|
Net loss per share - basic and diluted ($ per share)
|
(0.24)
|
0.38
|
(0.31)
|
(0.08)
|
|
|
|
|
|
Adjusted
net loss ($ millions)(2)
|
8.0
|
(15.8)
|
(11.9)
|
(36.5)
|
Adjusted net loss per share - basic ($ per share)(2)
|
0.01
|
(0.03)
|
(0.02)
|
(0.08)
|
Notes:
- Attributable
production and sales are from assets in commercial production during the
year (for 2010: Akbastau and Zarechnoye only from acquisition on December
27, 2010. For
2009: Karatau only from acquisition on December 21, 2009).
- The
Corporation has included non-GAAP performance measures: average realized
sales price per pound, cash cost per pound sold, adjusted net earnings and
adjusted net earnings per share. In the uranium mining industry, these are
common performance measures but do not have any standardized meaning, and
are non-GAAP measures. The Corporation believes that, in addition to
conventional measures prepared in accordance with GAAP, the Corporation
and certain investors use this information to evaluate the Corporation's
performance and ability to generate cash flow. The additional information
provided herein should not be considered in isolation or as a substitute
for measures of performance prepared in accordance with GAAP. See "Non-GAAP
Measures".
The following table
provides a reconciliation of adjusted net earnings / loss to the financial
statements:
|
3 months ended
|
Year ended
|
|
Dec 31, 2010
$(000's)
|
Dec 31, 2009
$(000's)
|
Dec 31, 2010
$(000's)
|
Dec 31, 2009
$(000's)
|
Net (loss) / earnings from continuing operations
|
(148,232)
|
179,601
|
(189,702)
|
(38,078)
|
Unrealized foreign exchange loss / (gain) on future
income tax liabilities
|
71
|
4,678
|
823
|
(63,771)
|
Impairment of mineral interests, plant and equipment
and closure costs
|
111,067
|
3,913
|
112,955
|
269,540
|
Loss / (gain) on sale of available for sale
securities
|
155
|
(67)
|
10,603
|
(193)
|
Corporate
development expenditure
|
422
|
-
|
8,906
|
-
|
Restructuring
costs
|
5,520
|
-
|
5,520
|
-
|
Effect of rate adjustment on future income tax
liabilities(1)
|
39,000
|
(203,961)
|
39,000
|
(203,961)
|
Adjusted
net earnings / (loss)
|
8,003
|
(15,836)
|
(11,895)
|
(36,463)
|
|
|
|
|
|
Adjusted net earnings / (loss) per share - basic ($)
|
0.01
|
(0.03)
|
(0.02)
|
(0.08)
|
|
|
|
|
|
Weighted average number of shares (thousands) -
basic
|
682,872
|
475,083
|
611,562
|
475,583
|
|
|
|
|
|
Note:
- The
rate adjustment relates to the change in the effective tax rate used to
calculate future income tax, resulting from the change in the tax
regulations for Kazakhstan. (Refer to Kazakhstan tax rate).
The financial statements, as
well as the accompanying management's discussion and analysis, are available
for review at www.uranium1.com and should be read in conjunction with this
news release. All figures are in U.S. dollars unless otherwise
indicated. All references to pounds sold or pounds produced are to pounds
of U3O8.
Conference Call Details
Uranium One will be hosting
a conference call and webcast to discuss its 2010 results on Tuesday, March 8,
2010 starting at 10:00 a.m. (Eastern Time). Participants may join the
call by dialling toll free 1-888-231-8191 or 1-647-427-7450 for local calls or
calls from outside Canada and the United States. A live webcast of the
call will be available through CNW Group's website at: www.newswire.ca/en/webcast
A recording of the
conference call will be available for replay for a two week period beginning at
approximately 1:00 p.m. (Eastern Time) on March 8, 2011 by dialling toll free
1-800-642-1687 or 1-416-849-0833 for local calls or calls from outside Canada and
the United States. The pass code for the replay is 45160765. A
replay of the webcast will be available through a link on our website at www.uranium1.com
About Uranium One
Uranium One is one of the
world's largest publicly traded uranium producers with a globally diversified
portfolio of assets located in Kazakhstan, the United States and
Australia.
Cautionary Statement
No stock exchange,
securities commission or other regulatory authority has approved or disapproved
the information contained herein.
Investors are advised to
refer to independent technical reports containing detailed information with
respect to the material properties of Uranium One. These technical reports are
available under the profiles of Uranium One Inc and UrAsia Energy Ltd. at www.sedar.com. Those technical reports provide
the date of each resource or reserve estimate, details of the key assumptions,
methods and parameters used in the estimates, details of quality and grade or
quality of each resource or reserve and a general discussion of the extent to
which the estimate may be materially affected by any known environmental,
permitting, legal, taxation, socio-political, marketing, or other relevant
issues. The technical reports also provide information with respect to data
verification in the estimation.
Forward-looking
statements: This press release contains certain forward-looking statements.
Forward-looking statements include but are not limited to those with respect to
the price of uranium, the estimation of mineral resources and reserves, the
realization of mineral reserve estimates, the timing and amount of estimated
future production, costs of production, capital expenditures, costs and timing
of the development of new deposits, success of exploration activities,
permitting time lines, currency fluctuations, requirements for additional
capital, government regulation of mining operations, environmental risks,
unanticipated reclamation expenses, title disputes or claims and limitations on
insurance coverage and the timing and possible outcome of pending litigation.
In certain cases, forward-looking statements can be identified by the use of
words such as "plans", "expects" or "does not
expect", "is expected", "budget",
"scheduled", "estimates", "forecasts",
"intends", "anticipates" or "does not
anticipate", or "believes" or variations of such words and
phrases, or state that certain actions, events or results "may",
"could", "would", "might" or "will" be
taken, occur or be achieved. Forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Uranium One to be materially different
from any future results, performance or achievements expressed or implied by
the forward-looking statements. Such risks and uncertainties include, among
others, the completion of the transactions described in this press release, the
future steady state production and cash costs of Uranium One, the actual
results of current exploration activities, conclusions of economic evaluations,
changes in project parameters as plans continue to be refined, possible
variations in grade and ore densities or recovery rates, failure of plant,
equipment or processes to operate as anticipated, accidents, labour disputes or
other risks of the mining industry, delays in obtaining government approvals or
financing or in completion of development or construction activities, risks
relating to the integration of acquisitions and the realization of synergies
relating thereto, to international operations, to prices of uranium as well as
those factors referred to in the section entitled "Risk Factors" in
Uranium One's Annual Information Form for the year ended December 31, 2009 and
Management Information Circular dated August 3, 2010, each of which is
available on SEDAR at www.sedar.com, and which should be reviewed in
conjunction with this document. Although Uranium One has attempted to identify
important factors that could cause actual actions, events or results to differ
materially from those described in forward-looking statements, there may be
other factors that cause actions, events or results not to be as anticipated,
estimated or intended. There can be no assurance that forward-looking
statements will prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, readers
should not place undue reliance on forward-looking statements. Uranium One
expressly disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise, except in accordance with applicable securities laws.
For further information
about Uranium One, please visit www.uranium1.com.
%SEDAR: 00005203E