Uranium One Announces 75% Increase in Production for the First Half of 2009
Trading Symbols: UUU - Toronto Stock Exchange, JSE Limited (Johannesburg
Stock Exchange)
VANCOUVER, Aug. 10 /CNW/ - Uranium One Inc. ("Uranium One") today reported operational and financial results for the quarter ending June 30, 2009. 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 pounds of U(3)O(8).
Q2 2009 Highlights:
- Total attributable production of 833,800 pounds during Q2 2009, 9%
higher than the 767,100 pounds of attributable production recorded
during Q2 2008 and 18% higher than total attributable production of
708,500 in Q1 2009.
- The average total cash cost per pound sold was $17 per pound during
Q2 2009.
- In line with scheduled deliveries under sales existing contracts,
attributable sales volumes during Q2 2009 were 385,100 pounds, 44%
lower than attributable sales volumes of 685,600 pounds during Q2
2008.
- The average realized sales price during Q2 2009 was $48 per pound,
generating revenue of $18.6 million, compared to an average realized
sales price of $72 per pound, generating revenue of $49.4 million
during Q2 2008.
- Earnings from mine operations were $6.6 million during Q2 2009, an 80%
decrease compared to earnings from mine operations of $32.9 million
during Q2 2008.
- On June 15, 2009 Uranium One announced the signing of a definitive
purchase agreement to acquire a 50% interest in the Karatau Uranium
Mine in Kazakhstan from ARMZ.
Jean Nortier, President and CEO of Uranium One commented:
"Uranium One achieved record production during the second quarter, driven by steady performance from Akdala and the ramp-up in production from South Inkai, which continues to meet targets. Our mines are continuing to generate healthy operating margins with total cash costs per pound sold in line with our expectations at $17 per pound during the quarter."
Operations and Projects
For the six months ending June 30, 2009 Uranium One's attributable production was 1,516,400 pounds U(3)O(8), an increase of 75% over attributable production of 866,800 pounds U(3)O(8) for the comparable period in 2008. The average cash cost per pound sold was $17 per pound during the six months ending June 30, 2009, compared to $13 per pound during the comparable period in 2008.
Operational results for Uranium One's operations and project during Q2 2009 were:
- At the Akdala Uranium Mine, attributable production of 438,800 pounds;
total cash costs were $13 per pound sold.
- At the South Inkai Uranium Mine, attributable production of 376,700
pounds; cash operating costs for Q2 2009 were $23 per pound sold.
- At the Kharasan Uranium Project, pilot production continued during the
quarter, with attributable production during commissioning of 18,300
pounds.
On July 9, 2009 Uranium One announced an updated NI 43-101 compliant mineral resource estimate for South Inkai provided by Hellman & Schofield Pty. Ltd. as at December 31, 2008 with total indicated resources of 34.1 million tonnes at a U(3)O(8) grade of 0.053%, containing 39.6 million pounds U(3)O(8) (27.7 million pounds attributable to Uranium One) and total inferred resources of 42.8 million tonnes at a U(3)O(8) grade of 0.047%, containing 44.4 million pounds U(3)O(8) (31.1 million pounds attributable to Uranium One). The previously reported mineral resource estimate dated October 2, 2006 was 57.7 million tonnes grading 0.048% U(3)O(8), containing 62.0 million pounds U(3)O(8) in the inferred category (43.4 million pounds attributable to Uranium One).
Outlook
Uranium One's attributable production estimate for 2009 remains 3.5 million pounds. With the completion of the acquisition of the 50% joint venture interest in Karatau, total production guidance for 2010 will increase by 35% from 5.6 million pounds to 7.5 million pounds.
During 2009, the average cash cost per pound sold is expected to be approximately $16 per pound at Akdala, including Kazakh mineral extraction tax of approximately $2 per pound. The average cash cost per pound sold is expected to be approximately $22 per pound at South Inkai, including Kazakh mineral extraction tax of approximately $4 per pound.
Uranium One currently has contracts for the sale of an aggregate of 25 million attributable pounds, 16 million pounds of which are contracted at weighted average floor prices of approximately $46 per pound. The remainder of contracted attributable sales are not subject to floors and such sales are related to the spot price of U(3)O(8), except for 910,000 pounds, which will be sold at an average fixed price of $79 per pound, subject to escalation.
For 2009, Uranium One expects to sell between 2.4 million and 2.8 million attributable pounds. Uranium One has already contracted for the sale of 2.2 million attributable pounds in 2009, of which 700,000 pounds have weighted average floor prices of approximately $43 per pound. Sales of U(3)O(8) into the spot market will be at Uranium One's discretion.
Attributable inventory levels at our 70% owned Betpak Dala JV are expected to increase from approximately 1.2 million pounds at December 31, 2008 to between approximately 1.8 million and 2.2 million pounds by the end of 2009.
In 2009, capital expenditure by Betpak Dala is expected to be $30 million at South Inkai and $6 million at Akdala (on a 100% basis). For development of its assets in Wyoming, Uranium One now expects to incur capital expenditures of $13 million during 2009.
General and administrative expenses, excluding stock-based compensation, are expected to be approximately $28 million for 2009; care and maintenance costs at Dominion are expected to be $12 million for 2009.
The C$270 million private placement and formation of a strategic relationship with a Japanese consortium announced in February 2009 will be completed following receipt of regulatory approval from the Kazakhstan Ministry of Energy and Mineral Resources, which is now expected by the end of 2009.
The previously announced acquisition of a 50% interest in the Karatau Uranium Mine in Kazakhstan is subject to regulatory approvals, including Kazakh Ministry of Energy and Mineral Resources approval, and is expected to close by the end of 2009.
Q2 2009 Financial Review
Revenues for Q2 2009 were $18.6 million, compared to $49.4 million during Q2 2008 with the decrease being due to lower sales volumes as well as a lower average realized uranium price during the most recent quarter.
The average cash cost per pound sold in Q2 2009 was $17 per pound. This was an increase over the $14 average cash cost per pound sold recorded in Q2 2008 due primarily to the inclusion of the new Kazakh Mineral Extraction Tax as well as the inclusion of initial production from South Inkai, which is currently in ramp up.
The net loss from continuing operations in Q2 2009 was $265.7 million, or $0.57 per basic and diluted share, which includes a non-cash write-off of $251.1 million arising from the realization of the accumulated translation loss on Dominion, as well as a write-down of certain assets held for sale. The net loss from continuing operations in Q2 2008 was $68.2 million, or $0.15 per basic and diluted share.
The adjusted net loss for Q2 2009 was $12.9 million, or $0.03 per basic and diluted share compared to adjusted net earnings for Q2 2008 of $6.6 million, or $0.01 per basic and diluted share.
Consolidated cash and cash equivalents were $183.9 million as at June 30, 2009 compared to $203.9 million at March 31, 2009. Working capital was $239.8 million at June 30, 2009.
FINANCIAL SUMMARY Q2 2009 Q2 2008 YTD 2009 YTD 2008
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Attributable
production (lbs)(1) 815,500 435,300 1,516,400 866,800
Attributable sales (lbs)(1) 385,100 685,600 1,265,700 968,900
Average realized
sales price ($ per lb)(2) 48 72 49 74
Average cash cost of
production sold ($ per lb)(2) 17 14 17 13
Revenues ($ millions) 18.6 49.4 61.5 71.9
Earnings from mine
operations ($ millions) 6.6 32.9 22.5 49.2
Net loss from continuing
operations ($ millions) (265.7) (68.2) (202.4) (78.5)
Loss per share from continuing
operations - basic and diluted
($ per share) (0.57) (0.15) (0.43) (0.17)
Earnings / (loss) from
discontinued operations
($ millions) 0.8 0.3 (1.4) (104.3)
Earnings (loss) per share
from discontinued operations -
basic and diluted ($ per share) 0.00 0.00 (0.00) (0.22)
Net loss ($ millions) (264.9) (67.9) (203.8) (182.8)
Net loss per share - basic
and diluted ($ per share) (0.56) (0.15) (0.43) (0.39)
Adjusted net (loss) / earnings
($ millions)(2) (12.9) 6.6 (18.4) (3.7)
Adjusted net (loss) / earnings
per share - basic
($ per share)(2) (0.03) 0.01 (0.04) (0.01)
Notes:
1. Attributable production and sales are from assets in commercial
production during the period (Akdala and South Inkai in Q2 2009
and YTD 2009 and Akdala in Q2 2008 and YTD 2008).
2. The Corporation has included non-GAAP performance measures:
average realized sales price per pound, cash cost per pound sold,
adjusted net earnings/(loss) and adjusted net earnings/(loss) 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.
The following table provides a reconciliation of adjusted net earnings /
(loss) to the consolidated financial statements:
Figures in US$ 000's,
except per share 3 months ended 6 months ended
------------------------------------------
Jun 30, Jun 30, Jun 30, Jun 30,
2009 2008 2009 2008
$(000's) $(000's) $(000's) $(000's)
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Net loss from
continuing operations (265,726) (68,195) (202,370) (78,508)
Unrealized foreign exchange
loss / (gain) on future
income tax liabilities 1,776 (171) (67,123) (1,309)
Impairment of mineral
interests, plant and
equipment (net of tax of
$23,880 for the 3 and 6
months ended June 30, 2008) 251,064 81,209 251,064 81,209
Gain on sale of available for
sale securities (net of tax
of $2,397 for the 3 and 6
months ended June 30, 2008) 8 (6,205) 8 (5,070)
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Adjusted net (loss) / earnings (12,878) 6,638 (18,421) (3,678)
-------------------------------------------------------------------------
Adjusted net (loss) / earnings
per share - basic ($) (0.03) 0.01 (0.04) (0.01)
Weighted average number of
shares (thousands) - basic 469,690 468,166 469,652 467,809
Conference Call Details
Uranium One will be hosting a conference call and webcast to discuss the second quarter 2009 results on Monday, August 10, 2009 starting at 10:00 a.m. (Eastern Time). Participants may join the call by dialling toll free 1-800-731-6941 or 1-416-644-3420 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/webcast
A recording of the conference call will be available for replay for a two week period beginning at approximately 12:00 p.m. (Eastern Time) on August 10, 2009 by dialling toll free 1-877-289-8525 or 1-416-640-1917 for local calls or calls from outside Canada and the United States. The pass code for the replay is 21311444. 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, South Africa 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., UrAsia Energy Ltd., and Energy Metals Corporation 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.
This document uses the terms "indicated" and "inferred" resources as defined in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects. United States investors are advised that while these terms are recognized and required by Canadian regulations, the SEC does not recognize them. Investors are cautioned not to assume that all or any part of the mineral deposits in these categories will ever be converted into reserves. In addition, "inferred resources" have a great amount of uncertainty as to their existence and economic and legal feasibility and it cannot be assumed that all or any part of an inferred mineral resource will be ever be upgraded to a higher category. Investors are cautioned not to assume that all or any part of an inferred resource exists or is economically or legally mineable. Mineral resources are not mineral reserves and do not have demonstrated economic viability.
Scientific and technical information contained herein has been reviewed on behalf of the Corporation by Mr. M.H.G. Heyns, Pr.Sci.Nat. (SACNASP), MSAIMM, MGSSA, Senior Vice President Technical Services of the Corporation, and by Mr. Simon Gatehouse, B.Sc. (Hons) Geology, MAIG, Consulting Geologist of Hellman & Schofield Pty. Ltd. (for South Inkai resources only), both Qualified Persons for the purposes of NI 43-101.
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 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, 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, 2008, 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 uranium1.com.
%SEDAR: 00005203E For further information: Jean Nortier, Chief Executive Officer, Tel: (604) 601-5642; Chris Sattler, Executive Vice President, Corporate Development and Investor Relations, Tel: (416) 350-3657
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