Uranium One Announces Record Quarterly and Annual Production and Sales, Completion of C$270 Million Financing with JUMI Consortium and Receipt of US$20 Million Dividend from its Betpak Dala Joint Venture
VANCOUVER and JOHANNESBURG, South Africa, Jan. 14 /CNW/ - Uranium One Inc. today announced record production and sales for the fourth quarter and for the full year 2009, primarily due to the successful ramp-up in production at the South Inkai Uranium Mine. The Company also announced the completion of its C$270 million convertible debenture financing with the JUMI consortium and the receipt of a US$20 million dividend from its Betpak Dala Joint Venture.
Highlights
Production
- 42% increase in quarterly attributable production for Q4 2009, to a
record 1.2 million lbs U(3)O(8), from 0.8 million lbs produced in Q3
2009
- 24% increase in annual attributable production for 2009, to a record
3.6 million lbs U(3)O(8), compared to 2.9 million lbs produced in
2008
Sales
- 254% increase in quarterly sales volumes for Q4 2009, to a record 1.5
million lbs U(3)O(8), compared to 0.4 million lbs during Q3 2009
- 44% increase in annual attributable sales volumes for 2009, to a
record 3.2 million lbs U(3)O(8), compared to 2.2 million pounds
during 2008
Convertible Debenture Closing
- Completion of convertible debenture financing with Japanese
consortium and receipt of aggregate proceeds of C$270 million on
January 14, 2010
Dividends
- Payment of dividend by Betpak Dala Joint Venture and receipt by
Uranium One of US$20 million in December 2009
Karatau and Christensen Ranch Acquisitions; Sale of Texas Assets
- Completion in December 2009 of the acquisition and registration of
Uranium One's 50% interest in the Karatau Uranium Mine
- Receipt of all regulatory approvals required in connection with the
acquisition of Christensen Ranch and Irigaray in Wyoming; closing
expected by January 31, 2010
- Completion in December 2009 of the sale of the Company's Texas assets
to Uranium Energy Corp. ("UEC") for 2.5 million restricted common
shares of UEC
Production
Attributable production during 2009 from Akdala, South Inkai and Kharasan was 3.5 million pounds U(3)O(8), in line with the Company's guidance for the year. Including production from Karatau from December 22, 2009, Uranium One's attributable production for 2009 was 3.6 million pounds U(3)O(8), a 24% increase compared to 2.9 million pounds produced during 2008.
During the fourth quarter of 2009, attributable production was 1.2 million pounds U(3)O(8), the highest quarterly production in the Company's history and a 42% increase over production of 0.8 million pounds achieved during the third quarter of 2009.
Uranium One's attributable production for the fourth quarter and for the full year 2009 is shown below.
Table 1 - Uranium One Attributable Production (lbs U(3)O(8))
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Q4 2009 Fiscal Year 2009
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Akdala 531,500 1,890,300
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South Inkai 547,000 1,511,800
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Kharasan 28,200 81,700
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Sub-total 1,106,700 3,483,800
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Karatau(1) 75,400 75,400
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Total 1,182,100 3,559,200
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(1) Attributable production from Karatau Joint Venture commencing December 22, 2009.
Sales
Attributable sales volume during 2009 from Akdala and South Inkai was 2.9 million pounds U(3)O(8). Including sales from Karatau from December 22, 2009, Uranium One's attributable sales for 2009 were 3.2 million pounds, a 44% increase compared to sales of 2.2 million pounds during 2008.
During the fourth quarter of 2009, attributable sales volume was 1.5 million pounds U(3)O(8), the highest quarterly sales volume in the Company's history, representing a 254% increase in sales compared to 0.4 million pounds during the third quarter of 2009.
A breakdown of Uranium One's attributable sales volumes for the fourth quarter and for the full year 2009 is shown below.
Table 2 - Uranium One Attributable Sales Volumes (lbs U(3)O(8))
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Q4 2009 Fiscal Year 2009
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Akdala 710,300 1,535,000
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South Inkai 535,700 1,399,800
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Sub-total 1,246,000 2,934,800
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Karatau(1) 252,900 252,900
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Total 1,498,900 3,187,700
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(1) Attributable sales volume from Karatau Joint Venture commencing December 22, 2009.
Operations Summary
Akdala Uranium Mine
Attributable production from Akdala during the fourth quarter of 2009 was 531,500 pounds U(3)O(8), the highest quarterly production result in Akdala's history. The concentration of uranium in solution averaged approximately 68 mg per litre and the average flow rate from the well fields was approximately 1,880 cubic metres per hour during the fourth quarter, compared to 1,608 cubic metres per hour during the third quarter.
The well installation program for 2009, consisting of 164 wells, was completed by the end of December.
South Inkai Uranium Mine
South Inkai achieved record quarterly production of 547,000 pounds U(3)O(8) attributable to Uranium One during the fourth quarter. Several newly acidified well fields commenced production during the quarter and, as a result, the average concentration of uranium in solution increased to 74 mg per litre from the average of 69 mg per litre during the third quarter. Also due to the additional well fields in production, the average flow rate increased significantly during the fourth quarter to 1,800 cubic metres per hour, compared to 1,249 cubic metres per hour during the third quarter.
The well installation program for 2009, consisting of 343 wells, was completed by the end of December.
Karatau Uranium Mine
The registration of the transfer of a 50% interest in the Karatau Uranium Mine to Uranium One by the South Kazakhstan Region Department of Justice, and the release from escrow to JSC Atomredmetzoloto ("ARMZ") of 117 million common shares of Uranium One, were completed in December 2009. The previously announced long term offtake and framework agreements with ARMZ became effective on December 14, 2009.
Uranium One will account for operational and financial results for its 50% interest in Karatau from December 22, 2009. During the period from December 22, 2009 until year end, Uranium One's attributable production from Karatau was 75,400 pounds U(3)O(8). The concentration of uranium in solution averaged approximately 211 mg per litre during this period and the average flow rate from the well fields was 1,200 cubic metres per hour.
Kharasan Uranium Project
Attributable production during the commissioning process from Kharasan was 28,200 pounds U(3)O(8) during the fourth quarter. The concentration of uranium in solution averaged approximately 49 mg per litre during the fourth quarter, compared to an average of 57 mg per litre during the third quarter. The average flow rate from the well fields increased during the fourth quarter to 330 cubic metres per hour, compared to 284 cubic metres per hour during the third quarter.
C$270 Million Financing with Japanese Consortium
As previously announced, on December 29, 2009 Uranium One and Japan Uranium Management Inc. ("JUMI") executed documentation revising the February 9, 2009 private placement between the Company and JUMI to a convertible debenture financing. JUMI is owned by a Japanese consortium comprising The Tokyo Electric Power Company, Inc., Toshiba Corporation and the Japan Bank for International Cooperation.
The private placement was completed, and aggregate closing proceeds of C$270 million received, on January 14, 2009. The previously announced long term offtake and strategic relationship agreements with the JUMI consortium have now become effective.
The Company expects that the Kazakh regulatory approval required to convert the debentures into 117 million Uranium One common shares will be received during 2010.
Dividend from Betpak Dala
In December 2009, Uranium One received a dividend of US$20 million (net of Kazakh withholding taxes) from its 70% owned Betpak Dala joint venture. This is the second dividend paid to the shareholders of the Betpak Dala Joint Venture.
Acquisition of Christensen Ranch and Irigaray
The Company has received all regulatory approvals required in connection with the acquisition of the MALCO joint venture from wholly-owned subsidiaries of AREVA and EDF for US$35 million in cash.
The assets of MALCO include the licensed and permitted Irigaray central processing plant, the Christensen Ranch satellite in situ recovery facility and associated U(3)O(8) resources located in the Powder River Basin of Wyoming. The Nuclear Regulatory Commission license for the Irigaray central processing plant allows for a maximum of 2.5 million pounds of dried U(3)O(8) production per year.
Closing of this acquisition is expected to occur by January 31, 2010. Uranium One plans to continue refurbishment of the Irigaray plant and development of the Christensen Ranch well fields during 2010, with first production from these assets commencing in 2011.
Closing of Sale of Texas Assets
Uranium One completed the sale of its 99% interest in the South Texas Mining Venture, LLP to Uranium Energy Corp. ("UEC") on December 18, 2009. The purchase price consideration was 2.5 million restricted common shares of UEC.
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.
The production and sales volumes and financial information disclosed in this press release are preliminary and may be subject to adjustment after completion of the Company's audit for the year ended December 31, 2009.
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, attributable production and sales volumes for Q4 2009 and financial year 2009, 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, changes in market conditions, the actual results of current exploration activities, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, project cost overruns or unanticipated costs or expenses, 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, exchange rate and uranium price fluctuations, delays in obtaining government approvals or financing or in completion of development or construction activities, changes in, and the effect of government policy, risks relating to the timing and completion of the transactions described in this press release, the potential benefits thereof, risks relating to the benefits derived by the Corporation from the strategic relationship described in this press release, risks relating to the integration of acquisitions, to international operations, to the price 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 www.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: (647) 408-8274
.