TORONTO, March 5, 2012 /CNW/ - Uranium One Inc. ("Uranium One") today reported record revenue of $530 million for 2011 based on record sales and production of 9.9 and 10.7 million pounds. Uranium One also reported cash costs per pound sold of $14 for 2011. Net earnings for 2011 were $88 million, or $0.09 per share and adjusted net earnings for 2011 were $114 million or $0.12 per share..
2011 Highlights
Operational Results
- Total attributable production during 2011 was a record 10.7 million pounds, 43% higher than total attributable production of 7.4 million pounds during 2010.
- The average total cash cost per pound sold was $14 per pound during 2011, compared to the average cash cost per pound sold of $13 per pound during 2010.
- Total attributable production during Q4 2011 was a record 3.4 million pounds, 60% higher than total attributable production of 2.1 million pounds during Q4 2010.
Financial Results
- Attributable sales volumes for 2011 increased by 44% to a record 9.9 million pounds, compared to 6.9 million pounds sold during 2010.
- Revenue increased by 62% to a record $530 million in 2011, compared to $327 million in 2010. The average realized sales price during 2011 was $54 per pound. The average spot price for uranium in 2011 was $57 per pound.
- Earnings from mine operations were $263 million during 2011, an 89% increase from earnings from mine operations of $138.7 million in 2010, due to increased sales volumes.
- The net earnings for 2011 were $88 million or $0.09 per share, compared to net losses of $154 million or $0.25 per share for 2010.
- The adjusted net earnings for 2011 were $114 million or $0.12 per share, compared to adjusted net losses of $3.3 million or $0.01 per share for 2010.
Corporate
- During June 2011, Uranium One became the operator of Mantra's Mkuju River Project in Tanzania. On January 16, 2012, Uranium One elected to pay $150 million to ARMZ which will both extend the term of the Mantra purchase option from June 7, 2012 to June 7, 2013 and result in Uranium One acquiring a 13.9% stake in Mantra from ARMZ.
- The Corporation issued ruble-denominated bonds with an aggregate principal amount of $463.5 million (RUB 14.3 billion) in December 2011, In connection with the offering, the Corporation entered into a RUB/USD cross-currency interest rate swap agreement, creating a synthetic US dollar instrument with an interest rate of 6.74%
Chris Sattler, Chief Executive Officer of Uranium One, commented:
"Uranium One delivered excellent operational results during 2011 and I am looking forward to continued strong results in 2012. Despite the challenges that the nuclear power industry faced during 2011, our Company's strategy has not changed and we will continue to focus on increasing production from our assets and remaining the world's lowest cost supplier of uranium. We expect demand for uranium to continue to grow through this decade and Uranium One, as one of the world's largest producers, is well-positioned to capitalize on this growth."
Outlook
The Corporation's total attributable production guidance for 2012 and 2013 remains 11.6 million and 12.5 million pounds, respectively.
During 2012, the average cash cost per pound sold is expected to be approximately $19 per pound.
The Corporation expects attributable sales to be approximately 11.0 million and 12.5 million pounds in 2012 and 2013, respectively.
The Corporation expects to incur attributable capital expenditures in 2012 of $114 million for wellfield development and $115 million for plant and equipment, totalling $229 million for its assets in Kazakhstan, the United States and Australia.
In 2012, general and administrative expenses (excluding non-cash items) are expected to be approximately $39 million and exploration expenses are expected to be $11 million.
Operations and Projects
Results for Uranium One's operations and projects during 2011 were:
| Asset |
2011 Attributable Production
(lbs U3O8) |
2011 Total Cash Costs
(per lb sold U3O8) |
| Akdala |
2,027,800 |
$13 |
| South Inkai |
2,817,700 |
$18 |
| Karatau |
2,826,800 |
$9 |
| Akbastau |
1,437,000 |
$12 |
| Zarechnoye |
947,900 |
$21 |
| Kharasan |
332,800 |
N/A |
| Willow Creek |
214,800 |
N/A |
| Honeymoon |
51,000 |
N/A |
| Total |
10,655,800 |
$14 |
2011 Financial Review
Revenue of $530 million was recorded in 2011, 62% higher compared to revenue of $327 million in 2010, due to an increase in both sales volumes as well as the average realized sales price.
Operating expenses per pound sold were $14 in 2011, compared to $13 per pound sold in 2010.
Increased revenue resulted in an 89% increase in earnings from mine operations to $263 million in 2011, compared to $139 million in 2010.
Net income during 2011 was $88 million, or $0.09 per share compared to a loss of $154 million or $0.25 per share during 2010.
The adjusted earnings for 2011 were $114 million, or $0.12 per share compared to an adjusted net loss of $3.3 million or $0.01 per share in 2010.
Consolidated cash and cash equivalents were $619 million as at December 31, 2011 compared to $324 million at December 31, 2010. Working capital was $715 million at December 31, 2011.
The following table provides a summary of key financial results:
| FINANCIAL |
Q4 2011 |
Q4 2010 |
FY 2011 |
FY 2010 |
| Attributable production (lbs) (1) |
3,156,200 |
2,038,400 |
10,057,200 |
7,230,200 |
| Attributable sales (lbs) (1) |
3,161,200 |
2,878,400 |
9,881,400 |
6,861,600 |
| |
|
|
|
|
| Average realized sales price ($ per lb) (2) |
50 |
53 |
54 |
48 |
| Average cash cost of production sold ($ per lb)(2) |
15 |
12 |
14 |
13 |
| Revenues ($'millions) |
157.9 |
152.3 |
530.4 |
326.9 |
| Earnings from mine operations ($'millions) |
76.0 |
76.3 |
262.6 |
138.7 |
| Net (loss) / earnings ($'millions) |
(1.1) |
(112.9) |
88.4 |
(153.7) |
| Net (loss) / earnings per share - basic and diluted ($ per share) |
(0.00) |
(0.18) |
0.09 |
(0.25) |
| |
|
|
|
|
| Adjusted net earnings / (loss) ($'millions)(2) |
21.4 |
(16.6) |
113.7 |
(3.3) |
| Adjusted net earnings / (loss) per share - basic ($ per share)(2) |
0.02 |
(0.02) |
0.12 |
(0.01) |
Notes:
| (1) |
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.) |
| (2) |
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 consolidated financial statements:
| |
|
3 months ended |
Year ended |
| |
|
Dec 31,
2011
$'millions |
Dec 31,
2010
$'millions |
Dec 31,
2011
$'millions |
Dec 31,
2010
$'millions |
| Net (loss)/earnings |
|
(1.1) |
(112.9) |
88.4 |
(153.7) |
| Fair value adjustments |
|
3.9 |
5.7 |
2.6 |
36.5 |
| Impairment and care and maintenance costs |
|
0.3 |
45.5 |
1.2 |
49.9 |
| Corporate development expenditure |
|
0.2 |
0.4 |
1.2 |
8.9 |
| Restructuring costs |
|
1.4 |
5.5 |
3.6 |
5.5 |
| Effect of rate adjustment on deferred tax liabilities(1) |
|
- |
39.0 |
- |
39.0 |
| Non-recurring income tax expense |
|
16.7 |
- |
16.7 |
- |
| Loss on sale of available for sale securities |
|
- |
0.2 |
- |
10.6 |
| Adjusted net earnings / (loss) |
|
21.4 |
(16.6) |
113.7 |
(3.3) |
| |
|
|
|
|
|
| Adjusted net earnings / (loss) per share - basic and diluted ($) |
|
0.02 |
(0.02) |
0.12 |
(0.01) |
| |
|
|
|
|
|
| Weighted average number of shares (millions) - basic and diluted |
|
957.2 |
682.9 |
957.2 |
611.6 |
| |
|
|
|
|
|
Notes:
| (1) |
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 in 2010. |
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 the first quarter 2011 results on Tuesday, March 6, 2012 starting at 10:00 a.m. (Eastern Time). Participants may join the call by dialing 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 6, 2012 by dialing toll free 1-888-231-8191 or 1-647-427-7450 for local calls or calls from outside Canada and the United States. The pass code for the replay is 55564685. 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, 2010 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.