| Mon 14 May 2007, 15:05 | | SXR - sxr Uranium One Inc - Quarter 1 Results |
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SXR
SXR
SXR - sxr Uranium One Inc - Quarter 1 Results
sxr Uranium One Inc
(Incorporated in Canada)
(Registration number: 15096422420)
Share code on the JSE: SXR & ISIN: CA87112P1062
Share code on the TSX: SXR & ISIN: CA87112P1062
Consolidated Balance Sheets
As at March 31, 2007 and December 31, 2006
(in US dollars)
Notes Unaudited as at Unaudited as at
Mar 31, 2007 Dec 31, 2006
$`000 $`000
ASSETS
Current assets
Cash 287,693 327,516
Accounts receivable 31,124 22,184
Inventories 1,648 2,342
320,465 352,042
Non-current assets
Property, plant and 3 325,989 286,855
equipment
Asset retirement fund 4,071 3,427
330,060 290,282
Total assets 650,525 642,324
LIABILITIES
Current liabilities
Accounts payable and accrued 28,069 31,347
liabilities
Current portion of lease 943 1,272
obligations
Short term loans 4 50,664 51,659
79,676 84,278
Non-current liabilities
Asset retirement obligations 4,416 4,924
Lease obligations 293 304
Convertible debentures 112,991 108,653
Future taxation liability 30,527 30,863
148,227 144,744
Non-controlling interest 11,406 7,688
SHAREHOLDERS` EQUITY
Share capital 5 525,356 513,966
Contributed surplus 6 16,755 15,966
Convertible debentures 20,937 20,937
Accumulated deficit (161,318) (157,505)
Comprehensive income 9,486 12,250
411,216 405,614
Total equity and liabilities 650,525 642,324
See accompanying notes to the Consolidated Financial Statements, including:
* Basis of preparation (note 2.1)
* Subsequent events (note 10)
sxr Uranium One Inc.
Consolidated Statements of Operations and Deficit
For three months ended March 31, 2007 and March 31, 2006
(in US dollars, except for per share amounts)
Notes Unaudited Unaudited
3 months ended 3 months ended
Mar 31, 2007 Mar 31, 2006
$`000 $`000
Gold sales 688 1,021
Cost of sales (715) (3,373)
Gross loss (27) (2,352)
Sundry income 716 114
General and administrative (2,677) (1,545)
expenditure
Share options expensed (1,741) (3,201)
Restricted shares expensed (695) -
Exploration expenditure (4,517) (2,597)
Other net income - ( 49)
Operating loss (8,941) (9,630)
Interest income 3,530 776
Interest expense (4,097) (340)
Dilution gain on disposal of 5,741 8,135
investments
Foreign exchange losses on (202) -
cash
Loss before income taxes (3,969) (1,059)
Provision for income taxes - (1,022)
Net loss before non- (3,969) (2,081)
controlling interest
Non-controlling interest in 156 171
loss of subsidiary
Net loss (3,813) (1,910)
Accumulated deficit at the (157,505) (114,399)
beginning of the period
Accumulated deficit at the (161,318) (116,309)
end of the period
Basic and diluted loss per 7 (2.81) (1.91)
common share (cents)
Weighted average number of 7 135,781,818 99,934,468
basic and diluted common
shares outstanding
See accompanying notes to the Consolidated Financial Statements
sxr Uranium One Inc.
Consolidated Statements of Comprehensive Income
For three months ended March 31, 2007 and March 31, 2006
(in US dollars)
Unaudited Unaudited
3 months ended 3 months ended
Mar 31, 2007 Mar 31, 2006
$`000 $`000
Total Total
Balance at the beginning of the 12,250 21,534
period
Unrealized gains and losses on (2,764) (677)
translating financial statements of
self-sustaining foreign operations
Balance at the end of the period 9,486 20,857
sxr Uranium One Inc.
Consolidated Statements of Cash Flows
For the quarters ended March 31
(in US dollars)
Unaudited Unaudited
3 months ended 3 months ended
Mar 31, 2007 Mar 31, 2006
$`000 $`000
Net loss (3,813) (1,910)
Add back: Net interest expense / 567 (436)
(income)
Add back: Non-cash items:
- Non-controlling interest in loss (156) ( 171)
of subsidiary
- Dilution gain on disposal of (5,741) (8,135)
investments
- Depreciation and amortization 118 228
- Provision for income taxes - 1,022
- Unrealized foreign exchange losses 214 -
on cash
- Share options expensed 1,741 3,201
- Restricted shares expensed 695 -
Movement in working capital:
- Decrease in inventories 617 52
- Increase in accounts receivable (8,824) (1,583)
- Decrease in accounts payable and (2,327) (1,047)
accrued liabilities
- Increase in asset retirement (231) ( 183)
obligations
Cash utilized by operations (17,140) (8,962)
Net cash interest received 3,117 436
Cash flows from operating activities (14,023) (8,526)
Cash taken over from Sub-Nigel - 1,933
Additions to property, plant and (45,473) (12,965)
equipment
Increase in asset retirement fund (648) ( 5)
Cash flows from investing activities (46,121) (11,037)
Net proceeds from the issue of 50 139,607
ordinary shares and share options
exercised
Net proceeds from the issue of 9,877 -
ordinary shares by subsidiary
Net proceeds from the exercise of 9,743 -
warrants
Loan received during the period - 5,381
Decrease in capital element of (294) (293)
finance leases
Cash flows from financing activities 19,376 144,695
Effects of exchange rate changes on 945 (1,093)
cash held in foreign currencies
Net (decrease) / increase in cash (39,823) 124,039
Cash at the beginning of the period 327,516 10,891
Cash at the end of the period 287,693 134,930
Non-cash movements:
Interest accrued and foreign (995) -
exchange movements on short term
loans
Interest accrued and foreign 4,338 -
exchange movements on convertible
debentures
See accompanying notes to the Consolidated Financial Statements
sxr Uranium One Inc.
Notes to the Consolidated Financial Statements (Unaudited)
March 31, 2007
1 NATURE OF OPERATIONS AND BASIS OF PREPARATION
The unaudited interim consolidated financial statements have been prepared by
the Corporation in accordance with Canadian generally accepted accounting
principles ("Canadian GAAP"). The preparation of the financial statements is
based on accounting policies and practices consistent with those used in the
preparation of the audited annual consolidated financial statements. The
accompanying unaudited interim consolidated financial statements should be read
in conjunction with the Notes to the Corporation`s audited annual consolidated
financial statements for the year ended December 31, 2006, since they do not
contain all disclosures required by Canadian GAAP for annual financial
statements. The unaudited interim consolidated financial statements reflect all
normal and recurring adjustments, which are, in the opinion of management,
necessary for a fair presentation of the interim period presented.
sxr Uranium One Inc. (the "Corporation" or "Uranium One") is a Canadian
corporation with a primary listing on the Toronto Stock Exchange and a secondary
listing on the JSE Limited (the Johannesburg stock exchange), engaged through
subsidiaries and joint ventures in the acquisition, exploration and development
of properties for production of uranium in South Africa, Australia, Canada and
the United States, and gold in South Africa.
The Corporation`s principal assets are the Dominion Uranium Project in South
Africa and the permitted Honeymoon Uranium Project in South Australia. Through a
joint venture with Pitchstone Exploration Ltd. ("Pitchstone"), the Corporation
is also engaged in uranium exploration activities in the Athabasca Basin of
Saskatchewan. The Corporation`s Uranium One Africa Limited subsidiary holds
68.05% (December 31, 2006: 71.36%) of Aflease Gold Limited, which owns the
Modder East Gold Project and related gold assets in South Africa.
2 SIGNIFICANT NEWLY ADOPTED ACCOUNTING POLICIES
2.1 Basis of preparation
In the current quarter, the Corporation has adopted all of the new and revised
Standards and Interpretations issued by the Accounting Standards Board that are
relevant to its operations and effective for annual reporting periods beginning
on January 1, 2007. The adopted statements include:
- Section 1530 - Comprehensive Income
- Section 3855 - Financial Instruments - Recognition and measurement
- Section 3865 - Hedges
The adoption of these Standards and Interpretations had no material financial
impact on the financial statements of the Corporation. The newly adopted
policies are illustrated below:
2.2 Financial assets
The Corporation classifies its financial assets in the following categories: at
fair value through profit or loss, loans and receivables, held-to-maturity
investments, and available-for-sale financial assets. The classification depends
on the purpose for which the investments were acquired. Management determines
the classification of its investments at initial recognition and re-evaluates
this designation at each reporting date.
Regular purchases and sales of financial assets are recognized on the trade date
- the date on which the Corporation commits to purchase or sell the asset.
Investments are initially recognized at fair value plus transaction costs for
all financial assets not carried at fair value through profit or loss. Financial
assets carried at fair value through profit or loss are initially recognized at
fair value, and transaction costs are expensed in the income statement.
Financial assets are derecognized when the rights to receive cash flows from the
investments have expired or have been transferred and the Corporation has
transferred substantially all risks and rewards of ownership. Available-for-sale
financial assets and financial assets at fair value through profit or loss are
subsequently carried at fair value. Loans and receivables are carried at
amortized cost using the effective interest method.
2 SIGNIFICANT NEWLY ADOPTED ACCOUNTING POLICIES (continued)
Gains or losses arising from changes in the fair value of the `financial assets
at fair value through profit or loss` category are presented in the income
statement within other (losses)/gains - net, in the period in which they arise.
Dividend income from financial assets at fair value through profit or loss is
recognized in the income statement as part of other income when the
Corporation`s right to receive payments is established.
Changes in the fair value of monetary securities denominated in a foreign
currency and classified as available for sale are analyzed between translation
differences resulting from changes in amortized cost of the security and other
changes in the carrying amount of the security. The translation differences on
monetary securities are recognized in profit or loss; translation differences on
non-monetary securities are recognized in equity. Changes in the fair value of
monetary and non-monetary securities classified as available for sale are
recognized in equity.
When securities classified as available for sale are sold or impaired, the
accumulated fair value adjustments recognized in equity are included in the
income statement as gains and losses from investment securities.
Interest on available-for-sale securities calculated using the effective
interest method is recognized in the income statement as part of interest
income. Dividends on available-for-sale equity instruments are recognized in the
income statement as part of other income when the Corporation`s right to receive
payments is established.
The fair values of quoted investments are based on current bid prices. If the
market for a financial asset is not active (and for unlisted securities), the
Corporation establishes fair value by using valuation techniques. These include
the use of recent arm`s length transactions, reference to other instruments that
are substantially the same, discounted cash flow analysis and option pricing
models, making maximum use of market inputs and relying as little as possible on
entity-specific inputs.
The Corporation assesses at each balance sheet date whether there is objective
evidence that a financial asset or a group of financial assets is impaired. In
the case of equity securities classified as available for sale, a significant or
prolonged decline in the fair value of the security below its cost is considered
as an indicator that the securities are impaired. If any such evidence exists
for available-for-sale financial assets, the cumulative loss - measured as the
difference between the acquisition cost and the current fair value, less any
impairment loss on that financial asset previously recognized in profit or loss
- is removed from equity and recognized in the income statement. Impairment
losses recognized in the income statement on equity instruments are not reversed
through the income statement.
2.2.1 Financial assets at fair value through profit and loss
Financial assets at fair value through profit or loss are financial assets held
for trading. A financial asset is classified in this category if acquired
principally for the purpose of selling in the short term. Derivatives are
classified as held for trading unless they are designated as hedges. Assets in
this category are classified as current assets.
2.2.2 Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They are included
in current assets, except for maturities greater than 12 months after the
balance sheet date. These are classified as non-current assets.
2.2.3 Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either
designated in this category or not classified in any of the other categories.
They are included in non-current assets unless management intends to dispose of
the investment within 12 months of the balance sheet date.
2.3 Financial liabilities and equity instruments issued by the Corporation
Financial liabilities are classified as financial liabilities measured at fair
value or other financial liabilities measured at amortized cost.
2.3.1 Classification as debt or equity
Debt and equity instruments are classified as either financial liabilities or as
equity in accordance with the substance of the contractual arrangement.
2 SIGNIFICANT NEWLY ADOPTED ACCOUNTING POLICIES (continued)
2.3.2 Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of an entity after its liabilities. Equity instruments are recorded at
the proceeds received, net of direct issue costs.
2.3.3 Compound instruments
The component parts of compound instruments are classified separately as
financial liabilities and equity in accordance with the substance of the
contractual arrangement. At the date of issue, the fair value of the liability
component is estimated using the prevailing market interest rate for a similar
non-convertible instrument. This amount is recorded as a liability on an
amortized cost basis until extinguished upon conversion or at the instrument`s
maturity date. The equity component is determined by deducting the amount of the
liability component from the fair value of the compound instrument as a whole.
This is recognized and included in equity, net of income tax effects, and is not
subsequently remeasured.
3 PROPERTY, PLANT AND EQUIPMENT
Unaudited as at Mar 31, 2007 Unaudited as at Dec 31, 2006
Cost Accumu- Net Cost Accumu- Net
$`000 lated carrying $`000 lated carrying
amorti- amount amorti- amount
zation $`000 zation $`000
$`000 $`000
Mine 189,170 (3,678) 185,492 149,266 (3,561) 145,705
development
costs and
mine plant
facilities
Mineral and 139,540 - 139,540 140,421 - 140,421
Undeveloped
properties
Motor 860 (372) 488 662 (382) 280
vehicles
Office 1,016 (547) 469 953 (504) 449
equipment
330,586 (4,597) 325,989 291,302 (4,447) 286,855
Owned assets 324,394 285,065
Leased 1,595 1,790
assets
Total net 325,989 286,855
carrying
amount as at
end of the
period
Mine development costs and mine plant facilities comprise of the following
projects:
Unaudited as at Mar 31, 2007 Unaudited as at Dec 31, 2006
Cost Accumu- Net Cost Accumu- Net
$`000 lated carrying $`000 lated carrying
amorti- amount amorti- amount
zation $`000 zation $`000
$`000 $`000
Dominium 173,311 (1,812) 171,499 137,585 (1,709) 135,876
Uranium
Project
Honeymoon 5,368 (1,269) 4,099 3,253 (1,173) 2,080
Uranium
Project
Modder East 10,491 (597) 9,894 8,428 (679) 7,749
Gold Project
189,170 (3,678) 185,492 149,266 (3,561) 145,705
3 PROPERTY, PLANT AND EQUIPMENT (continued)
Mineral and Undeveloped Mineral properties Undeveloped properties
properties comprise:
Unaudited as Unaudited as Unaudited Unaudited as
at at as at at
Mar 31, 2007 Dec 31, 2006 Mar 31, Dec 31, 2006
$`000 $`000 2007 $`000
$`000
Modder East - - 14,500 15,020
Sub-Nigel - - 14,888 15,423
Spaarwater 289 300 - -
Honeymoon, Australia 5,299 5,246 31,801 31,818
Goulds Dam, Australia - - 24,921 24,921
Billeroo / Karkarook, - - 43,170 43,170
Australia
Athabasca, Canada 2,474 2,366 2,198 2,157
8,062 7,912 131,478 132,509
4 SHORT TERM LOANS
Unaudited Unaudited as
as at Mar at
31, 2007 Dec 31, 2006
$`000 $`000
February 2005 Nedcor Securities loan 265 199
August 2006 Nedcor Securities loan 50,399 51,460
Total liability 50,664 51,659
The February 2005 Nedcor Securities loan represents draw-downs on a facility
provided by Nedcor Securities, secured by Uranium One Africa`s investment in
Randgold and Exploration Company Limited ("Randgold") shares. This loan bears
interest in South Africa at a variable rate currently at ZAR 8.95%, adjusted in
terms of a formula which is influenced by movements in the Randgold share price.
The effective interest rate for the period was ZAR 13.71%. The loan has no fixed
repayment terms. The loan is repayable in South African rand.
The August 2006 Nedcor Securities loan represents draw-downs on a facility
provided by Nedcor Securities, secured by Uranium One Africa`s investment in
Aflease Gold shares. This loan bears interest in South Africa at a flat rate of
ZAR 9% per annum, adjusted in terms of a formula which is influenced by
movements in the Aflease Gold share price. The effective interest rate for the
period was ZAR 5.81%. The loan will be repaid on September 20, 2007. The loan is
repayable in South African rand.
These loans are classified as liabilities held to maturity and are carried at
amortized cost.
5 SHARE CAPITAL
Number of shares Value of shares
Unaudited Unaudited Unaudited Unaudited
3 months 12 months 3 months 12 months
Ordinary shares ended ended ended ended
Mar 31, 2007 Dec 31, 2006 Mar 31, 2007 Dec 31, 2006
$`000 $`000
Opening balance of issued 134,841,678 89,103,814 513,966 216,123
and outstanding shares
Common shares issued in - 43,195,830 - 301,510
public or private
offering
Exercise of stock options 6,288 2,542,034 50 14,786
and restricted shares
Exercise of warrants 1,800,000 - 11,340 -
Share issue costs - - - (18,453)
Closing balance of issued 136,647,966 134,841,678 525,356 513,966
and outstanding shares
6 CONTRIBUTED SURPLUS
The following table details the movements of contributed surplus during the
period:
Warrants Restricted Options TOTAL TOTAL
Unaudited shares Unaudited Unaudited Unaudited
3 months Unaudited 3 months 3 months 12 months
ended 3 months ended ended ended
Mar 31, ended Mar 31, Mar 31, Dec 31,
2007 Mar 31, 2007 2007 2006
$`000 2007 $`000 $`000 $`000
$`000
At the beginning 1,813 1,347 12,806 15,966 11,367
of the period
Share options - - 1,740 1,740 10,845
expensed
Share options - - (10) (10) (7,593)
exercised
Restricted shares - 695 - 695 1,367
expensed
Restricted shares - (40) - (40) (20)
exercised
Warrants exercised (1,596) - - (1,596) -
At the end of the 217 2,002 14,536 16,755 15,966
period
Assumptions
The fair value of Restricted shares used to calculate the compensation expense
was determined as the share price at the grant date adjusted by the probability
of the recipients remaining in the workforce until the vesting date.
The fair value of stock options used to calculate the compensation expense was
estimated using the binomial option pricing model with the following
assumptions:
Unaudited Unaudited
3 months ended 12 months ended
Mar 31, 2007 Dec 31, 2006
Risk free interest rate: Canadian rates 3.81% - 4.11% 3.81% - 4.11%
Expected dividend yield 0% 0%
Expected volatility of the Corporation`s 60% 60%
share price
Changes in the subjective input assumptions can materially affect the fair value
estimate and therefore the existing models do not necessarily provide a reliable
measure of the fair value of the Corporation`s stock options and restricted
shares.
Options
Under the Corporation`s Option plan, options granted are non-assignable and may
be granted for a term not exceeding ten years. The plan is administered by the
Board of Directors, which determines individual eligibility under the plan,
number of shares reserved underlying the options granted to each individual (not
exceeding 5% of issued and outstanding shares to any insider and not exceeding
1% of the issued and outstanding shares to any non-employee director on a non-
diluted basis) and any vesting period which, pursuant to the stock option plan
is generally one-third on the grant date, one-third on the first anniversary of
the grant date and the remainder on the second anniversary of the grant date
unless the board of directors determines otherwise. The board of directors, on
December 8, 2006, decided to adopt an amended vesting schedule such that any
options granted on and after December 8, 2006, would vest as to one-third on the
first anniversary of the grant date, one-third on the second anniversary of the
grant date and one-third on the third anniversary of the grant date.The maximum
number of shares of the Corporation that are issuable pursuant to the plan is
limited to 7.2% of issued and outstanding shares.
6 CONTRIBUTED SURPLUS (continued)
The following is a summary of the Corporation`s options granted under its stock-
based compensation plan:
Weighted average
Number of options exercise price
Unaudited Unaudited Unaudited Unaudited
3 months 12 months 3 months 12 months
ended ended ended ended
Mar 31, 2007 Dec 31, 2006 Mar 31, 2007 Dec 31, 2006
$`000 $`000
At the beginning of 5,487,901 5,268,610 7.97 0.47
the period
Granted during the - 2,926,443 - 8.35
period
Exercised during the (1,600) (2,518,309) 11.27 2.61
period
Forfeiture of share (28,556) (188,843) 13.00 4.34
options
Total options 5,457,745 5,487,901 7.94 7.97
outstanding at the
end of the period
The stock option compensation expense for the first quarter of 2007 was $1.8
million (2006: $3.2 million) for the sxr Uranium One options and $0.1 million
(2006: $0) for the Aflease Gold options. As at March 31, 2007, the aggregate
unexpensed fair value of unvested stock options granted amounted to $6.6 million
(2006: $7.4 million).
The following table summarizes certain information about the Corporation`s stock
options outstanding at March 31, 2007:
Options outstanding Options exercisable
Range of Number Weighted Weighted Number Weighted Weighted
Exercise outstanding average average exercisable average average
Prices as at Mar remaining exercise as at Mar remaining exercise
US$ 31, 2007 life price 31, 2007 life price
(years) $`000 (years) $`000
1.15 to 916,211 3.69 1.48 471,443 3.69 1.49
1.59
2.19 to 173,922 3.69 2.33 121,584 3.69 2.34
2.85
3.13 to 1,241,292 3.68 3.55 1,060,164 3.67 3.56
3.84
4.04 to 352,421 3.54 4.12 263,682 3.49 4.13
4.92
5.52 to 1,647,034 3.89 6.75 1,062,639 3.89 6.75
6.78
7.17 to 1,126,865 4.63 11.68 162,189 4.57 10.95
12.28
5,457,745 3.97 7.94 3,141,702 3.80 5.91
Options exercised during the first quarter of 2007 resulted in 1,600 shares
being issued at an average exercise price of $11.27 per share.
Restricted shares
Under the Uranium One Restricted Share Plan, restricted share rights are granted
to eligible employees, contractors and directors. Each restricted share right is
exercisable for one common share of Uranium One at the end of the restricted
period for no additional consideration. The vesting period is generally two-
thirds on the first anniversary of the grant date and the remainder on the
second anniversary of the grant date. The aggregate maximum number of shares
available for issuance under the restricted share plan is capped at one million;
the number of shares for issuance to non-employee directors may not exceed 0.5%
of the total number of common shares outstanding on a non-diluted basis.
6 CONTRIBUTED SURPLUS (continued)
The following is a summary of the Corporation`s Restricted shares issued under
the Restricted Share Plan:
Number of restricted shares
Unaudited Unaudited
3 months ended 12 months ended
Mar 31, 2007 Dec 31, 2006
At the beginning of the period 413,501 -
Granted during the period - 441,915
Exercised during the period (4,688) (28,414)
Forfeiture of restricted shares (4,582) -
Total Restricted shares outstanding at 404,231 413 501
the end of the period
The grant date of 113,993 Restricted shares was December 8, 2006. The share
price on grant date was $12.07 per share.
The grant date of 327,922 Restricted shares was June 7, 2006. The share price on
grant date was $8.80 per share.
Restricted shares will not expire while the participant is in the employ of the
Corporation.
The Restricted share expense for the quarter ended March 31, 2007 was $0.7
million (2006: $0). As at March 31, 2007 the aggregate unexpensed fair value of
unvested Restricted shares granted amounted to $1.7 million (December 31, 2006:
$2.4 million).
Warrants Number of warrants Allocated value Average exercise
price
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
3 months 12 months 3 months 12 months 3 months 12 months
ended ended ended ended ended ended
Mar 31, 2007 Dec 31, Mar 31, Dec 31, Mar 31, Dec 31,
2006 2007 2006 2007 2006
$`000 $`000 $ $
At the 5,976,319 5,976,319 1,813 1,813 3.69 3.69
beginning
of the
period
Exercised (1,800,000) - (1,596) - 5.39 -
by BMO
Nesbitt
At the end 4,176,319 5,976,319 217 1,813 2.96 3.69
of the
period
Number of warrants
Unaudited as at Unaudited as at
Mar 31, 2007 Dec 31, 2006
Warrants comprise:
2008 Warrants 3,876,319 3,876,319
BMO Nesbitt Warrants - 1,800,000
Series D Warrants 300,000 300,000
Total 4,176,319 5,976,319
The fair value of the 2008 warrants (previously referred to as the "Eastbourne
warrants") was valued, for Canadian GAAP purposes, at $0.2 million on December
31, 2004. The 3,876,319 warrants have a term of 3 years from the date of issue
and expire on September 24, 2008.
On February 14, 2007, 1.8 million warrants issued to BMO Nesbitt Burns were
exercised at an exercise price of $5.39 for proceeds of $9.7 million.
Series D warrants represent those acquired from Southern Cross Resources Inc.
through the reverse takeover. 150,000 warrants expire on September 16, 2007 and
150,000 warrants expire on January 4, 2008.
7 BASIC LOSS PER SHARE AND DILUTED LOSS PER SHARE
Unaudited Unaudited
3 months ended 3 months ended
Mar 31, 2007 Mar 31, 2006
Basic and diluted loss per share (2.81) (1.91)
(cents)
is calculated based on a net loss for (3,813) (1,910)
the period of ($`000)
and a weighted average number of 135,781,818 99,934,468
shares outstanding of
For the quarters ended March 31, 2007 and 2006, the impact of outstanding share
options and warrants was excluded from the diluted share calculation because it
was anti-dilutive for earnings per share purposes.
8 INVESTMENT IN JOINT VENTURE
In January 2007, the Corporation received formal notice from its joint venture
partner, Pitchstone Exploration, to the effect that the Corporation had
completed the requirements to earn a 50% interest in five properties located in
the Athabasca basin in northern Saskatchewan. Pitchstone further confirmed that
a total of $3.4 million in exploration expenditures had been spent on the five
properties and that Pitchstone has received the required payments.
Unaudited as at
Mar 31, 2007
$`000
As at March 31, 2007
Current assets 34
Non-current assets 6,069
Current liabilities (110)
Non-current liabilities -
Net assets at March 31, 2007 5,993
The Corporation`s proportionate shares of assets and liabilities of the Joint
Venture as at March 31, 2007 are as follows:
The Corporation`s proportionate share of the Pitchstone Joint Venture revenue,
expenses, net income and cash flows for the three months ended March 31, 2007
were:
3 months ended
Mar 31, 2007
$`000
Exploration expenditure (348)
Net loss for the period ended March 31, 2007 (348)
Cash used in operating activities (456)
Cash advances paid to joint venture 296
Net decrease in cash (160)
9 SEGMENTED INFORMATION
Segmented information is presented in respect of the Corporation`s business and
geographical segments. The primary format, business segments, is based on the
Corporation`s management and internal reporting structure.
For the quarter ended March 31, 2007 (unaudited):
Business Africa Australia Canada Aflease Eliminations TOTAL
Uranium Uranium Corporate Gold (1) $`000
$`000 $`000 & Uranium Gold $`000
$`000 $`000
Gold Sales 688 - - - - 688
Cost of Sales (715) - - - - (715)
Gross loss (27) - - - - (27)
Sundry income 16 28 627 45 - 716
General and (615) (425) (1,253) (384) - (2,677)
administrative
expenditure
Share options (682) (148) (828) (83) - (1,741)
expensed
Restricted (62) (73) (560) - - (695)
shares expensed
Exploration (2,614) (297) (1,376) (230) - (4,517)
expenditure
Operating loss (3,984) (915) (3,390) (652) - (8,941)
Interest income 589 187 2,611 143 - 3,530
Interest (947) (8) (3,136) (6) - (4,097)
expense
Dilution gain 5,741 - - - - 5,741
on disposal of
investments
Foreign - - (202) - - (202)
exchange losses
on cash
Non-controlling 156 - - - - 156
interest in
loss of
subsidiary
Loss before 1,555 (736) (4,117) (515) - (3,813)
income taxes
Provision for - - - - - -
income taxes
Net profit / 1,555 (736) (4,117) (515) - (3,813)
(loss)
Total assets 306,746 28,616 861,708 40,212 (586,757) 650,525
Total 269,039 60,034 115,708 10,804 (227,682) 227,903
liabilities
Other segment
items
Capital 40,840 1,988 84 2,561 - 45,473
expenditure
(1) - Eliminations relate to inter-company investments and inter-company loans
9 SEGMENTED INFORMATION (continued)
For the quarter ended March 31, 2006 (unaudited):
Business Africa Australia Canada Aflease Eliminations TOTAL
Uranium Uranium Corporate Gold (1) $`000
$`000 $`000 & Uranium Gold $`000
$`000 $`000
Gold Sales 1,021 - - - - 1,021
Cost of Sales (3,211) (159) (3) - - (3,373)
Gross loss (2,190) (159) (3) - - (2,352)
Sundry income 111 3 - - - 114
General and (394) (242) (773) (136) - (1,545)
administrative
expenditure
Share options - - (3,201) - - (3,201)
expensed
Exploration (1,684) (913) - - - (2,597)
expenditure
Other net costs (49) - - - - (49)
Operating loss (4,206) (1,311) (3,977) (136) - (9,630)
Interest income 173 78 511 14 - 776
Interest (340) - - - - (340)
expense
Dilution gain 8,135 - - - - 8,135
on disposal of
investments
Non-controlling 171 - - - - 171
interest in
loss of
subsidiary
Loss before 3,933 (1,233) (3,466) (122) - (888)
income taxes
Provision for (1,022) - - - - (1,022)
income taxes
Net profit / 2,911 (1,233) (3,466) (122) - (1,910)
(loss)
Total assets 115,076 19,919 596,929 21,600 (416,258) 337,267
Total 73,393 28,754 1,839 6,072 (50,900) 59,159
liabilities
Other segment
items
Capital 12,470 28 467 - - 12,965
expenditure
(1) - Eliminations relate to inter-company investments and inter-company loans
10 SUBSEQUENT EVENTS
UrAsia Energy Limited
On April 20, 2007, Uranium One completed the acquisition of all of the
outstanding common shares of UrAsia Energy Ltd. ("UrAsia"). Holders of UrAsia
shares received an aggregate 217,164,830 Uranium One common shares. UrAsia
warrants and stock options were exchanged for warrants and stock options which
gives the holder the right to acquire common shares of Uranium One.
As a result of the transaction, the combined entity will be held approximately
60% by UrAsia shareholders and approximately 40% by Uranium One shareholders.
Accordingly, this business combination will be accounted for as a reverse
takeover under Canadian generally accepted accounting principles with UrAsia
being identified as the acquirer and Uranium One as the acquiree.
For subsequent periods, Uranium One`s financial statements will be based upon
the historical financial statements of UrAsia.
US Energy Corp
On April 30, 2007, Uranium One completed the purchase of the Shootaring Canyon
Uranium Mill in Utah, as well as a land package comprising uranium exploration
properties in Utah, Wyoming, Arizona and Colorado and a substantial database of
geological information for consideration equal to 6,607,605 Uranium One common
shares plus the sum of $750,000 in cash paid by Uranium One on the execution of
a July 2006 exclusivity agreement with the vendor. The purchase agreement
provides for further payments by Uranium One of $20.0 million upon the
Shootaring Canyon Mill reaching commercial production and $7.5 million on the
first delivery to the Mill after commercial production of mineralized material
from any of the purchased properties. In addition, U.S. Energy Corp. will
receive a royalty equal to 5% of the gross proceeds from the sale of commodities
produced at the Mill, to a maximum amount of $12.5 million. Uranium One
reimbursed U.S. Energy Corp. on closing for certain exploration expenditures
relating to the purchased properties in the amount of $1.6 million.
The purchase agreement also provides for the assignment of U.S. Energy Corp`s
right to receive $4.1 million in cash and 1.5 million common shares of Uranium
Power Corp. ("UPC") under a purchase and related joint venture agreement between
U.S. Energy and UPC relating to certain of the purchased properties for a cash
payment equal to a 5.25% annual discount rate applied to $4.1 million plus the
value of such shares (determined with reference to the weighted average closing
price thereof on the TSX Venture Exchange prior to closing) for a cash
consideration of $5.0 million.
The transaction will be accounted for as an asset acquisition.
Date: 14/05/2007 15:05:01 Produced by the JSE SENS Department.
