| Tue 8 Mar 2011, 14:03 | | UUU - Uranium One Inc - News Release Uranium One Announces 115% Increase in |
|
UUU
UUU
UUU - Uranium One Inc - News Release Uranium One Announces 115% Increase in
Revenue and 19% Lower Cash Costs for 2010
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
News Release
March 8, 2011
Uranium One Announces 115% Increase in Revenue and
19% Lower Cash Costs for 2010
Vancouver, British Columbia and Johannesburg, South Africa - Uranium One
Inc. ("Uranium One") today reported record revenue of $327 million for 2010
based on sales of 6.9 million pounds at an average realized sales price of
$48 per pound. Total cash costs for 2010 were $13 per pound sold. Uranium
One also reported strong earnings from mine operations of $137 million for
2010, 149% higher compared to 2009.
Highlights
Operational Results
- Total attributable production during 2010 was a record 7.4 million
pounds, 106% higher than total attributable production of 3.6 million
pounds during 2009.
- The average total cash cost per pound sold was $13 per pound during
2010, compared to the average cash cost per pound sold of $16 per
pound during 2009.
2010 Financial Results
- Attributable sales volumes for 2010 increased by 116% to a record 6.9
million pounds, compared to 3.2 million pounds sold during 2009.
- Revenue increased by 115% to a record $327 million in 2010, compared
to $152 million in 2009. The average realized sales price during both
2009 and 2010 was $48 per pound. The average spot price in 2010 was
$47 per pound.
- Earnings from mine operations were $137 million during 2010, a 149%
increase from earnings from mine operations of $55 million in 2009,
due to increased sales volumes and decreased operating expenses.
- Attributable inventory was 3.0 million pounds in December 31, 2010,
compared to 2.1 million pounds at December 31, 2009.
- The carrying value of the Honeymoon Uranium Project was written down
by $113.5 million, caused by the strengthening of the Australian
dollar and increased capital expenditures.
Corporate
- On December 27, 2010 Uranium One completed the ARMZ transaction, under
which the company acquired a 50% interest in the Akbastau Uranium
Mine, and a 49.67% interest in the Zarechnoye Uranium Mine, as well as
$610 million in cash.
- In connection with the ARMZ transaction, on December 20, 2010 the
Corporation paid a special dividend of $1.06 per share to all
shareholders other than ARMZ.
- New director - Mr. Peter Bowie, former Chief Executive Officer of
Deloitte China and former Chairman of Deloitte Canada, was appointed
to Uranium One`s board of directors on closing of the ARMZ
transaction.
- Management changes - Mr. Vadim Zhivov, Director General of ARMZ and a
director of Uranium One, was appointed President of Uranium One on
closing of the ARMZ transaction. Mr. Chris Sattler was appointed as
the Chief Executive Officer on February 1, 2011.
- On December 15, 2010, following ARMZ`s announcement that it had
entered into a definitive agreement to acquire Mantra Resources
Limited ("Mantra"), Uranium One and ARMZ jointly announced that the
two parties had entered into an option agreement for Uranium One to
acquire Mantra from ARMZ.
Chris Sattler, CEO of Uranium One commented:
"After an excellent year in 2010 for Uranium One, I am looking forward to
continued strong results in 2011. With a resurgence in the price of
uranium, I am particularly excited about Uranium One`s position as a low
cost producer with a high degree of leverage to the uranium price. Our
goals for 2011 are much the same as they were last year - to continue to
deliver on our production and cost targets and to continue to add quality
assets to our portfolio."
Outlook
The total attributable production guidance for 2011 is 10.5 million pounds,
consisting of 1.8 million pounds from Akdala; 3.4 million pounds from South
Inkai; 2.4 million pounds from Karatau; 1.2 million pounds from Akbastau;
1.0 million pounds from Zarechnoye; 0.3 million pounds from the Powder
River Basin; 0.2 million pounds from Honeymoon; and 0.2 million pounds from
Kharasan.
During 2011, the average cash cost per pound sold for the company is
expected to be approximately $18 per pound, based on $14 per pound at
Akdala, $19 per pound at South Inkai, $12 per pound at Karatau, $18 per
pound at Akbastau, $21 per pound at Zarechnoye, $25 per pound at the Powder
River Basin, and $35 per pound at Honeymoon.
Uranium One expects attributable sales to be approximately 9.5 million and
12.0 million pounds in 2011 and 2012, respectively.
Attributable capital expenditures for 2011 are expected to be $78 million
for wellfield development, $21 million for resource definition drilling and
$144 million for plant and equipment, totalling $243 million.
In 2011, general and administrative expenses (excluding non-cash items) are
expected to be approximately $37 million, restructuring and other non-
recurring costs are expected to be $7 million, and exploration expenses are
expected to be $7 million.
Operations and Projects
Results for Uranium One`s operations and projects during 2010 were:
- The Akdala Uranium Mine achieved attributable production of 1.9
million pounds; total cash costs were $12 per pound sold.
- The South Inkai Uranium Mine achieved attributable production of 3.1
million pounds; total cash costs were $19 per pound sold.
- The Karatau Uranium Mine achieved attributable production of 2.2
million pounds; total cash costs were $9 per pound sold, which was
lower than expected due to deferred operational expenditure.
- The Akbastau Uranium Mine`s attributable production was 16,700 pounds
since the acquisition date of December 27, 2010.
- The Zarechnoye Uranium Mine`s attributable production was 16,300
pounds since the acquisition date of December 27, 2010.
- The Kharasan Uranium Project`s attributable production during the
commissioning process was 0.2 million pounds during 2010.
- The Willow Creek ISR Project in Wyoming began commissioning activities
on December 20, 2010 and production has commenced.
2010 Financial Review
Revenue of $327 million in 2010 increased by 115% compared to $152 million
in 2009, due to higher sales volumes.
Operating expenses per pound sold decreased by 19% to $13 per pound in 2010
compared to $16 per pound in 2009.
Earnings from mine operations increased to $137 million in 2010, a 149%
increase from $55 million in 2009 due to increased sales volumes and
decreased operating expenses.
Attributable inventory as at December 31, 2010 was 3.0 million pounds,
which includes work in progress as well as finished product ready to be
shipped or in transit.
The adjusted net loss for 2010 was $12 million, or $0.02 per basic share
compared to the adjusted net loss for 2009 of $36 million, or $0.08 per
basic share.
Consolidated cash and cash equivalents were $316 million as at December 31,
2010 and working capital was $199 million as of the same date.
FINANCIAL SUMMARY Q4 2010 Q4 2009 2010 2009
Attributable 2,038,400 1,151,200 7,230,200 3,474,800
production (lbs)
(1)
Attributable sales 2,878,400 1,498,900 6,861,600 3,187,700
(lbs) (1)
Average realized 53 46 48 48
sales price ($ per
lb) (2)
Average cash cost 12 15 13 16
of production sold
($ per lb)(2)
Revenues ($ 152.3 69.1 326.9 152.0
millions)
Earnings from mine 76.3 22.7 137.4 54.6
operations ($
millions)
Net loss from (148.2) 179.6 (189.7) (38.1)
continuing
operations ($
millions)
Loss per share (0.24) 0.38 (0.31) (0.08)
from continuing
operations -
basic and diluted
($ per share)
Earnings from - - - 2.0
discontinued
operations ($
millions)
Earnings per share - - - 0.00
from discontinued
operations - basic
and diluted ($ per
share)
Net loss ($ (148.2) 179.6 (189.7) (36.1)
millions)
Net loss per share (0.24) 0.38 (0.31) (0.08)
- basic and
diluted ($ per
share)
Adjusted net loss 8.0 (15.8) (11.9) (36.5)
($ millions)(2)
Adjusted net loss 0.01 (0.03) (0.02) (0.08)
per share - basic
($ per share)(2)
Notes:
1. Attributable production and sales are from assets in commercial
production during the year (for 2010: Akbastau and Zarechnoye only
from acquisition on December 27, 2010. For 2009: Karatau only from
acquisition on December 21, 2009).
2. The Corporation has included non-GAAP performance measures: average
realized sales price per pound, cash cost per pound sold, adjusted net
earnings and adjusted net earnings 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. See "Non-GAAP Measures".
The following table provides a reconciliation of adjusted net earnings /
loss to the financial statements:
3 months ended Year ended
Dec 31, Dec 31, 2009 Dec 31, 2010 Dec 31, 2009
2010 $(000`s) $(000`s) $(000`s)
$(000`s)
Net (loss) / (148,232) 179,601 (189,702) (38,078)
earnings from
continuing
operations
Unrealized foreign 71 4,678 823 (63,771)
exchange loss /
(gain) on future
income tax
liabilities
Impairment of 111,067 3,913 112,955 269,540
mineral interests,
plant and
equipment and
closure costs
Loss / (gain) on 155 (67) 10,603 (193)
sale of available
for sale
securities
Corporate 422 - 8,906 -
development
expenditure
Restructuring 5,520 - 5,520 -
costs
Effect of rate 39,000 (203,961) 39,000 (203,961)
adjustment on
future income tax
liabilities(1)
Adjusted net 8,003 (15,836) (11,895) (36,463)
earnings / (loss)
Adjusted net 0.01 (0.03) (0.02) (0.08)
earnings / (loss)
per share - basic
($)
Weighted average 682,872 475,083 611,562 475,583
number of shares
(thousands) -
basic
Note:
1. The rate adjustment relates to the change in the effective tax rate
used to calculate future income tax, resulting from the change in the
tax regulations for Kazakhstan. (Refer to Kazakhstan tax rate).
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.
Conference Call Details
Uranium One will be hosting a conference call and webcast to discuss its
2010 results on Tuesday, March 8, 2010 starting at 10:00 a.m. (Eastern
Time). Participants may join the call by dialling toll free 1-888-231-8191
or 1-647-427-7450 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/en/webcast
A recording of the conference call will be available for replay for a two
week period beginning at approximately 1:00 p.m. (Eastern Time) on March 8,
2011 by dialling toll free 1-800-642-1687 or 1-416-849-0833 for local calls
or calls from outside Canada and the United States. The pass code for the
replay is 45160765. 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 and Australia.
For further information, please contact:
Chris Sattler
Chief Executive Officer
Tel: +1 416 350 3657
Rob Buchanan
Director, 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 and UrAsia Energy Ltd. 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 completion of the
transactions described in this press release, the future steady state
production and cash costs of Uranium One, 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 and the realization of
synergies relating thereto, 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, 2009 and Management Information Circular dated August 3, 2010,
each of 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.
Sponsor
Nedbank Capital
Date: 08/03/2011 14:03:00 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.
