| Thu 15 May 2008, 8:05 | | Uranium One Inc - News release |
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Uranium One Inc - News release
Uranium One Inc
(Formerly sxr Uranium One Inc.)
(Incorporated in Canada)
(Registration number: 15096422420)
Share code on the JSE: UUU & ISIN: CA91701P1053
Share code on the TSX: UUU & ISIN: CA91701P1053
Uranium One Inc.
390 Bay Street, Suite 1610
Toronto, Ontario M5H 2Y2
Trading Symbols: UUU - Toronto Stock Exchange, JSE Limited
(Johannesburg Stock Exchange)
NEWS RELEASE
May 14, 2008
Uranium One Announces Financial Results for Q1 2008 and Record Uranium
Production
Toronto, Ontario and Johannesburg, South Africa - Uranium One Inc.
("Uranium One") today reported unaudited financial results for the
three months ended March 31, 2008. All figures are in US dollars
unless otherwise indicated.
Highlights:
* The Corporation produced on an attributable basis 618,900 pounds U3O8,
an increase of 27% over Q1 2007
* Revenues of $22.5 million from the sale of 283,300 pounds U3O8,
representing an average realized price of $79 per pound U3O8
* For sale inventory increased by 137,600 pounds U3O8
* Earnings from mine operations of $16.3 million
* Cash cost per pound sold from Akdala of $12 per pound(1)
* Partial sale of Aflease Gold shares closed in April for proceeds of $41
million
Jean Nortier, Interim CEO of Uranium One commented:
"During the first quarter of 2008, Akdala Uranium Mine remained a steady,
low cost operation for the Company and South Inkai continued to exceed our
production expectations. At our Dominion Project in South Africa we continued
to make progress with new mining areas becoming available, which will pave
the way for improved grades and higher production of underground ore as the
year progresses. We are looking forward to initial production from our
Kharasan project in Kazakhstan."
Financial Review
During Q1 2008 the Company sold 283,300 pounds of U3O8 at an average
realized price of $79 per pound resulting in revenue from uranium sales
of $22.5 million, compared to Q1 2007 sales of 605,200 pounds of U3O8 at
an average realized price of $69 per pound resulting in revenue of $41.7
million. Lower sales volumes in Q1 2008 compared to Q1 2007 were partially
offset by a higher realized U3O8 price. During Q1 2008 for sale inventory
increased by 137,600 pounds U3O8 as more U3O8 was produced than sold during
the quarter.
Earnings from mine operations during the first quarter of 2008 were
$16.3 million, compared to $29.8 million in the first quarter of 2007.
The lower earnings from mine operations during the first quarter of 2008
compared to the first quarter of 2007 are due to lower sales volumes
during Q1 2008.
The net loss from continuing operations for Q1 2008 was $10.3 million, or
$0.02 per basic and diluted share compared to net income from continuing
operations for Q1 2007 of $8.0 million, or $0.04 per basic and diluted share.
Cash flow from operating activities for Q1 2008 was $43.3 million compared to
$51.4 million during the same period one year ago.
Consolidated cash and cash equivalents were $160.2 million as at March 31,
2008 compared to $159.6 million at December 31, 2007.
Net loss for Q1 2008 was $114.9 million, or $0.24 per basic and diluted
share.
Operations Review
Akdala Uranium Mine (70%), Kazakhstan
In line with the production plan for 2008, Akdala produced 616,400
pounds of U3O8 (237 tonnes U) of which 431,500 pounds of U3O8 (166 tonnes U)
was attributable to Uranium One during Q1 2008. The average cash operating
cost per pound of U3O8 sold was $12 during Q1 2008. The construction of a
precipitation and filtration circuit was completed in Q1 2008 and the
commissioning process of the circuit commenced during the quarter. It is
expected that the circuit will be fully operational during Q2 2008. The
filtration and precipitation circuit will enable Akdala to produce
yellowcake on site, reducing its dependency on external processing
facilities, decreasing transport lead times and reducing costs.
Projects Review
South Inkai Uranium Project (70%), Kazakhstan
Pre-commercial production from South Inkai in Q1 2008 was 206,400 pounds
of U3O8 (79 tonnes U) of which 144,500 pounds of U3O8 (55 tonnes U) is
attributable to the Corporation. South Inkai produced approximately
156,000 pounds of U3O8 in April 2008 and is currently producing at a rate
of approximately 5,200 pounds of U3O8 per day. South Inkai is not currently
permitted to produce more than 780,000 pounds of U3O8 (300 tonnes U) per year
under the existing pilot production licence. An Industrial Production Licence
for South Inkai is expected to be received in the first half of 2009.
Kharasan Uranium Project (30%), Kazakhstan
Acidification of the first well field at Kharasan commenced in March 2008.
The delineation program to convert a sufficient amount of resources from
the Russian C2 category to the Russian C1 category is ongoing and 20 drill
holes were completed in Q1 2008. During Q1 2008, 30 of the required 44 wells
for the pilot test program to prove the productivity of the well fields were
completed. The portion of the plant required for pilot production is expected
to be completed in 2008 and was 90% complete as at March 31, 2008. The
Corporation expects to receive an Industrial Production Licence for Kharasan
in the first half of 2009.
Dominion Uranium Project (100%), South Africa
During Q1 2008 pre-commercial production from the Dominion Uranium Project
was less than expected at 42,900 pounds of U3O8 and 1,200 ounces of gold.
During April 2008, the blasted grade, based on underground face sampling,
improved from the Q1 2008 average value of 0.361 kg/tonne to 0.555 kg/tonne.
With new mining areas becoming available, the in-situ grades currently mined
have increased as anticipated. This has resulted in an increase in the blasted
grades realized. The current focus is to achieve a mill feed grade that is in
line with the blasted grade.
The uranium plant is operating in line with recovery expectations.
Throughput for Q1 2008 was approximately 69,000 tonnes from underground
and 170,000 tonnes from surface tailings material. Total plant recoveries
are estimated to be 67% at present. Based on current head grades and residues,
the estimated U3O8 recovery from underground material is 77% and that from
surface tailing material is 49%.
Hobson and La Palangana (99%), United States
The processing plant is currently being refurbished to a capacity of
approximately 1,000,000 pounds of U3O8 per year. The refurbishment and
construction activity at the Hobson Facility remains on schedule for
completion in Q2 2008. The schedule for initial production of U3O8 is
directly tied to the licencing and development of La Palangana Uranium
Project, and is expected to take place by the end of 2008.
Wyoming ISR Projects (100%), United States
The NRC`s technical review of the application to build and operate an in
situ uranium recovery facility at the Moore Ranch Project in the Powder
River Basin is currently in progress and Uranium One expects to receive
the permit during 2009. Other Powder River Basin properties where delineation
drilling and environmental data collection for permitting purposes is ongoing
include the Ludeman, Allemand-Ross and Peterson projects.
An extensive delineation drilling program was concluded at our JAB property
in the Great Divide Basin during 2007 and the Company anticipates submitting
an application to the NRC for a licence to construct and operate an in situ
uranium recovery facility for JAB in Q2 2008. Uranium One also expects to
submit an application to the NRC for a licence to construct and operate an in
situ uranium recovery facility for the Antelope property in the Great Divide
Basin during Q2 2008.
Honeymoon Uranium Project (100%), Australia
The Corporation remains focused on operating and developing its core
uranium properties in Kazakhstan, South Africa and the United States, where
approximately 93% of the Corporation`s assets are located. The Corporation
has decided to suspend development activities at Honeymoon to allow for
evaluation of corporate development opportunities for the Project.
This news release should be read in conjunction with Uranium One`s first
quarter 2008 Management Discussion and Analysis filed with SEDAR and available
on our website, www.uranium1.com, in the "Investors" section under "Quarterly
Reports".
Conference Call Details
Uranium One will be hosting a conference call and webcast to discuss the
first quarter 2008 results May 15 starting at 10:00 a.m. (Eastern Standard
time). Participants may join the call by dialling toll free 1-800-588-4490
or 1-416-915-5762 for 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 one
week beginning at approximately 1:00 p.m. on May 15, 2008 by dialling
toll free 1-877-289-8525 or 1-416-640-1917 for calls outside Canada and
the United States. The pass code for the replay is 21271605. A replay
of the webcast will be available on our website at www.uranium1.com
About Uranium One
Uranium One Inc. is a Canadian-based uranium producing company with a
primary listing on the Toronto Stock Exchange and a secondary listing on
the JSE Limited (the Johannesburg stock exchange). The Corporation owns 70%
of the operating Akdala Uranium Mine in Kazakhstan and is also developing the
South Inkai and Kharasan Uranium Projects in Kazakhstan. Uranium One owns the
Dominion Uranium Project in South Africa, as well as the Honeymoon Uranium
Project in South Australia. In the United States, Uranium One has extensive
property holdings in Wyoming, Texas, Utah and New Mexico, including the
Shootaring Canyon Mill and the Hobson ISR facility. Uranium One is also
engaged in uranium exploration activities in the United States, the Athabasca
Basin of Saskatchewan, South Africa and Australia.
(1) Uranium One has included non-GAAP performance measures: sales per
pound U3O8 and cash cost per pound of U3O8 sold. The Corporation reports
total cash costs on a sales basis. 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. Accordingly, it is intended
to provide additional information and should not be considered in isolation
or as a substitute for measures of performance prepared in accordance with
GAAP.
Cautionary Statement
No stock exchange, securities commission or other regulatory authority
has approved or disapproved the information contained herein.
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 and gold,
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 and gold 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, 2007,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.
For further information, please contact:
Jean Nortier
Interim Chief Executive Officer
Tel: + 27 82 418 2241
Chris Sattler
Senior Vice President, Corporate Development and Investor Relations
Tel: + 1 647 408 8274
Date: 15/05/2008 08:05:01 Produced by the JSE SENS Department.
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