| Fri 13 Nov 2009, 14:00 | | UUU - Uranium One Inc - Announces 72% increase in year to date production and |
|
UUU
UUU
UUU - Uranium One Inc - Announces 72% increase in year to date production and
lower cash costs
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
November 13, 2009
Uranium One Announces 72% Increase in Year to Date Production and Lower Cash
Costs
Vancouver, British Columbia - Uranium One Inc. ("Uranium One") today reported
operational and financial results for the quarter ending September 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 to
pounds of U3O8.
Q3 2009 Highlights
* Total attributable production was 834,800 pounds during Q3 2009, 19% higher
than the production recorded during Q3 2008 and in line with total
attributable production during Q2 2009.
* Average total cash cost per pound sold decreased from $17 per pound during Q2
2009 to $15 per pound during Q3 2009.
* Attributable sales volume was 423,100 pounds during Q3 2009, in line with
scheduled deliveries under contracts with customers. Attributable sales
volume to date in Q4 2009 is 550,000 pounds.
* Average realized sales price was $50 per pound, which was $5 per pound higher
than the average spot price during Q3 2009. Revenue was $21.3 million.
* Earnings from mine operations were $9.4 million.
* On August 7, 2009, Uranium One entered into a definitive agreement to acquire
the licensed and permitted Irigaray ISR central processing plant, the
Christensen Ranch satellite ISR facility and associated U3O8 resources located
in the Powder River Basin of Wyoming for $35 million in cash.
Jean Nortier, President and CEO of Uranium One commented:
"Our operations continue to generate some of the highest margins in the
industry, with our total cash cost per pound sold decreasing by approximately
14% during the third quarter to $15 per pound. Well field development and
acidification of new production blocks at South Inkai are continuing, and we are
pleased to see that by the end of October Akdala and South Inkai were producing
at the required rate to meet our 2009 production guidance of 3.5 million
pounds."
Outlook
Production
During the remainder of 2009 and in 2010, the Corporation is focused on
maintaining production from Akdala at current levels, ramping up production at
South Inkai towards a level of 5.2 million pounds (2,000 tonnes U) in 2011,
successfully commissioning its development projects, controlling costs at its
operations and remaining a reliable supplier of U3O8 to the nuclear fuel
industry. The Corporation`s total attributable production guidance for 2009
remains unchanged at 3.5 million pounds.
Assuming the completion of the acquisition of the 50% joint venture interest in
Karatau by the end of 2009, the Corporation`s attributable production estimate
for 2010 is 6.8 million pounds of U3O8 and is made up as follows:
Operation Status Total Ownershi Estimated
estimate p % attributa
d 2010 ble 2010
producti productio
on n
(million (millions
s of of lbs)
lbs)
Akdala Producing 2.6 70% 1.8
South Inkai Producing 3.6 70% 2.5
Karatau Producing 4.6 50% 2.3
Kharasan Commissioning 0.3 30% 0.1
Honeymoon Commissioning 0.2 51% 0.1
Totals: 11.3 6.8
Production guidance for 2010 has been revised from 7.5 million pounds to 6.8
million pounds, largely as a result of the revised production plan at Kharasan
due to continued well field under-performance, as well as a more gradual ramp-up
profile at South Inkai.
Attributable production for 2011 is estimated to be 8.0 million pounds. This
includes initial production from the Powder River Basin in Wyoming.
Cash Costs
During 2010, the average cash cost per pound sold is expected to be as follows:
Mine 2010 - Estimated
average Cash Cost
($ / lb sold)(1)
Akdala 14
Karatau 14
South Inkai 20
Note:
Includes Kazakh mineral extraction tax of approximately $2 per pound at Akdala
and Karatau, and $3 per pound at South Inkai.
Sales and Sales Contracts
Excluding sales under offtake agreements negotiated with ARMZ and the Japanese
Consortium, Uranium One currently has contracts for the sale of an aggregate of
24 million attributable pounds; 14 million pounds of this material is contracted
with weighted average floor prices, subject to escalation, of approximately $47
per pound. The remainder of contracted attributable sales is not subject to
floors and such sales are related to the market price of U3O8, 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 approximately 2.5 million attributable
pounds. To the end of the third quarter of 2009, attributable sales volumes
were approximately 1.7 million pounds. To date during the fourth quarter,
attributable sales volumes have been 550,000 pounds.
For 2010, Uranium One expects to sell approximately 6 million attributable
pounds.
Capital Expenditures
Uranium One`s estimated capital expenditure and funding per project for 2010 are
expected to be as follows:
Mine / project Ownership 2010 - Estimated
% capital expenditure
in millions
Total Attributable
(100%)
Kazakhstan
Akdala 70% 24 17
South Inkai 70% 32 22
Karatau 50% 49 24
Kharasan 30% 25 8
SKZ-U (Sulphuric Acid Plant) 19% 94 18
Subtotal - Kazakhstan 224 89
Australia and United States
Honeymoon 51% 47 25
Powder River Basin 100% 34 34
Great Divide Basin 100% 1 1
Other 1 1
Subtotal - Australia and United States 83 61
Totals: 307 150
Capital expenditures for Akdala and South Inkai are funded from Betpak Dala`s
operations. In addition to ongoing well field development and sustaining
capital expenditures, the capital expenditure total for Akdala in 2010 includes
approximately $17 million for the construction of a satellite processing plant.
Karatau`s capital expenditures are expected to be funded from cash flow from its
operations in 2010.
Kharasan utilized the proceeds from its project finance facilities, proceeds
from sales of production in commissioning, as well as proceeds from toll
processing agreements to fund its capital expenditures in 2009. Uranium One is
working with its partners in the Kyzylkum joint venture to arrange additional
funding to finance Kyzylkum`s activities until it generates positive cash flow
from operations. The repayments of $35 million due from Kyzylkum on the loan
from the Corporation are likely to be deferred as part of the financing of
Kyzylkum`s activities.
Uranium One has committed to funding in 2010 $23 million of the construction
costs of the SKZ-U joint venture sulphuric acid plant. The Corporation`s
Australian joint ventures, including Honeymoon, will be funded in 2009 from the
cash commitment of approximately $73 million (A$104 million) from Mitsui. In
addition to the funds provided by Mitsui, the Corporation plans to contribute a
further $15 million towards the development of Honeymoon in 2010. Capital
expenditure on the Corporation`s fully-owned development projects in the Powder
River basin, including capital expenditure at Irigaray and Christensen Ranch, is
expected to be $34 million in 2010.
Other estimated expenditure by the Corporation in 2010 is expected to be as
follows:
Item 2010 - Estimated in $
millions
General and administrative (excluding stock based 29
compensation)
Exploration 7
Care and maintenance 1
Operations and Projects
For the nine months ending September 30, 2009, Uranium One`s attributable
production was approximately 2.3 million pounds U3O8, an increase of 72% over
attributable production of approximately 1.3 million pounds U3O8 for the
comparable period in 2008. The average cash cost per pound sold was $17 per
pound during the nine months ending September 30, 2009, compared to $14 per
pound during the comparable period in 2008.
Operational results for Uranium One`s operations and project during Q3 2009
were:
* At the Akdala Uranium Mine, attributable production was 464,200 pounds; total
cash costs were $12 per pound sold.
* At the South Inkai Uranium Mine, attributable production was 343,000 pounds;
total cash costs were $20 per pound sold.
* At the Kharasan Uranium Project, pilot production continued during the
quarter, with attributable production during commissioning of 27,600 pounds.
Q3 2009 Financial Review
Revenue of $21.3 million in Q3 2009 decreased by 62% compared to the $56.7
million in Q3 2008 due to a decrease in both volumes sold (50% lower than in the
comparable period) and the average realized uranium price (25% lower than in the
comparable period).
Operating expenses per pound sold increased by 8% from $14 per pound in Q3 2008
to $15 per pound in Q3 2009, mainly due to the higher initial cost of production
at South Inkai of $20 per pound. South Inkai commenced commercial operations on
January 1, 2009.
The increase in total average operating expenses, combined with the decreased
revenue, resulted in a 74% decline in earnings from mine operations from $36.6
million in Q3 2008 to $9.4 million in Q3 2009.
Attributable inventory increased from approximately 1.4 million pounds at June
30, 2009 to approximately 1.7 million pounds at September 30, 2009, as more U3O8
was produced than sold during Q3 2009.
The adjusted net loss for Q3 2009 was $7.8 million, or $0.02 per basic share
compared to adjusted net earnings for Q3 2008 of $5.6 million, or $0.01 per
basic and diluted share.
Consolidated cash and cash equivalents were $170.7 million as at September 30,
2009 compared to $183.9 million at June 30, 2009. Working capital was $165.1
million at September 30, 2009.
FINANCIAL SUMMARY Q3 Q3 YTD YTD
2009 2008 2009 2008
Attributable production (lbs) 807,20 482,40 2,323, 1,349,
(1) 0 0 600 200
Attributable sales (lbs) (1) 423,10 848,10 1,688, 1,817,
0 0 800 000
Average realized sales price 50 67 49 71
($ per lb) (2)
Average cash cost of 15 14 17 14
production sold ($ per lb)(2)
Revenues ($ millions) 21.3 56.7 82.9 128.6
Earnings from mine operations 9.4 36.6 31.9 85.9
($ millions)
Net loss from continuing (15.3) (2,013 (217.7 (2,092
operations ($ millions) .7) ) .2)
Loss per share from (0.03) (4.30) (0.46) (4.47)
continuing operations - basic
and diluted ($ per share)
Earnings / (loss) from 3.4 (0.6) 2.0 (104.8)
discontinued operations ($
millions)
Earnings (loss) per share 0.01 (0.00) 0.00 (0.22)
from discontinued operations
- basic and diluted ($ per
share)
Net loss ($ millions) (11.9) (2,014.3) (215.7) (2,197.0)
Net loss per share - basic (0.03) (4.30) (0.46) (4.69)
and diluted ($ per share)
Adjusted net (loss) / (7.8) 5.6 (26.2) 2.9
earnings ($ millions)(2)
Adjusted net (loss) / (0.02) 0.01 (0.06) 0.01
earnings per share - basic ($
per share)(2)
Notes:
1. Attributable production and sales are from assets in commercial production
during the period (Akdala and South Inkai in Q3 2009 and YTD 2009 and
Akdala in Q3 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 3 months ended 9 months ended
share
Sep 30, Sep 30, Sep 30, Sep 30,
2009 2008 2009 2008
$(000`s) $(000`s) $(000`s) $(000`s)
Net loss from continuing operations (15,309) (2,013,6 (217,679) (2,092,1
84) 92)
Unrealized foreign exchange loss / (1,326) 2,725 (68,449) 1,416
(gain) on future income tax
liabilities
Impairment of mineral interests, 8,969 2,015,26 260,033 2,096,47
plant and equipment (net of tax of 7 6
$815,711 and $839,591 for the 3 and
9 months ended September 30, 2008)
(Gain) / loss on sale of available (134) 1,272 (126) (2,845)
for sale securities (net of tax of
$2,397 for the 9 months ended
September 30, 2008)
Adjusted net (loss) / earnings (7,800) 5,580 (26,221) 2,855
Adjusted net (loss) / earnings per (0.02) 0.01 (0.06) 0.01
share - basic ($)
Weighted average number of shares 469,799 468,518 469,702 468,047
(thousands) - basic
Conference Call Details
Uranium One will be hosting a conference call and webcast to discuss the third
quarter 2009 results on Monday, November 16, 2009 starting at 10:00 a.m.
(Eastern Time). Participants may join the call by dialling toll free 1-877-974-
0448 or 1-416-644-3426 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 November 16, 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 conference ID for the replay is
4181648. 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.
For further information, please contact:
Jean Nortier
Chief Executive Officer
Tel: +1 604 601 5642
Chris Sattler
Executive Vice President, Corporate Development and Investor Relations
Tel: + 1 416 350 3657
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.
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.
Date: 13/11/2009 14:00:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
