| Wed 11 May 2011, 13:01 | | UUU - Uranium One Inc - Uranium One Announces 33% Increase in Q1 2011 |
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UUU - Uranium One Inc - Uranium One Announces 33% Increase in Q1 2011
Production to a Record 2.4 Million Pounds; Average Cash Costs of $14 per Pound
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
May 11, 2011
Uranium One Announces 33% Increase in Q1 2011 Production to a Record 2.4
Million Pounds; Average Cash Costs of $14 per Pound
Toronto, Canada and Johannesburg, South Africa - Uranium One Inc. ("Uranium
One") today reported record quarterly revenue of $101.9 million for Q1 2011
based on sales of 1.7 million pounds at an average realized sales price of $61
per pound. Quarterly production was a record 2.4 million pounds at a total
cash cost per pound sold of $14.
Q1 2011 Highlights
Operational Results
- Total attributable production during Q1 2011 was a record 2.4
million pounds, 33% higher than total attributable production of 1.8
million pounds during Q1 2010.
- The average total cash cost per pound sold was $14 during Q1 2011,
22% lower than the average cash cost per pound sold of $18 during Q1
2010.
- First full quarter of attributable production from the recently
acquired Akbastau and Zarechnoye mines was 366,900 pounds and
231,000 pounds, respectively.
Financial Results
- Attributable sales volumes during Q1 2011 were 1.7 million pounds,
120% higher than 0.8 million pounds sold during Q1 2010.
- Revenue was $101.9 million in Q1 2011, 187% higher than $35.5
million in Q1 2010. The average realized sales price during Q1 2011
was $61 per pound compared to $46 per pound in Q1 2010. The average
spot price in Q1 2011 was $68 per pound.
- Earnings from mine operations were $51.2 million during Q1 2011, a
428% increase from earning from mine operations of $9.7 million in
Q1 2010, due to increased sales volumes, an increase in the realized
sales price, and decreased operating expenses.
- Net income during Q1 2011 was $14.0 million, or $0.01 per share
compared to a net loss of $1.4 million or nil per share during Q1
2010.
- Adjusted net income during Q1 2011 was $14.7 million, or $0.02 per
share compared to an adjusted net loss of $10.5 million or $0.02 per
share in Q1 2010.
Corporate
- On March 21, 2011, ARMZ and Uranium One announced revised terms for
ARMZ`s acquisition of Mantra Resources, initially announced on
December 15, 2011. Uranium One`s option to acquire Mantra from ARMZ
was also revised to allow for the option period to be extended to 24
months.
Chris Sattler, Chief Executive Officer of Uranium One, commented:
"The Uranium One team continues to achieve our operational and financial
objectives. This quarter saw continued, low cost growth from our operations
and a smooth integration of our recently acquired Akbastau and Zarechnoye
mines. This is an excellent start to 2011, and provides a solid platform for
the Company to focus on integrating Mantra Resources following the closing of
ARMZ`s acquisition in June."
Outlook
Uranium One`s total attributable production guidance for 2011 remains at 10.5
million pounds.
During 2011, the average cash cost per pound sold 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`s attributable sales estimate for 2011 continues to be
approximately 9.5 million pounds and 12.0 million pounds in 2012.
The Corporation revised its attributable capital expenditures for the full
year 2011 from $244 million to $234 million, of which $74 million is for
wellfield development, $21 million for resource definition drilling and $139
million for plant and equipment.
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.
Fukushima
On March 11, 2011, north-eastern Japan suffered the devastating impacts of a
9.0 magnitude earthquake and subsequent tsunami. These events and the
consequent damage sustained at the Fukushima Dai-ichi nuclear power plant
have, among other things, led to a reduction in uranium demand in Japan due to
the permanent shutdown of the Fukushima facility and program delays or
extended outages at other reactors, as well as a reduction in spot and term
uranium prices.
While the impacts from Fukushima are not yet fully known, spot and term
uranium prices have begun to recover and current indications are that global
uranium demand is expected to be reduced downwards by only 5% over the next
decade. As a result, uranium market conditions are expected to continue to be
positive, particularly for diversified low cost producers such as Uranium One.
Q1 2011 Operations and Projects
During Q1 2011, Uranium One achieved attributable production of 2.4 million
pounds, an increase of 33% over attributable production of 1.8 million pounds
for the comparable period in 2010, and 14% higher than production of 2.1
million pounds recorded in the Q4 2010. The increase is primarily due to the
inclusion of production from the recently acquired 50% interest in Akbastau
and 49.67% interest in Zarechnoye.
Operational results for Uranium One`s assets during Q1 2011 were:
Asset Q1 Attributable Q1 Total Cash Costs
Production (per lb sold U3O8)
(lbs U3O8)
Akdala 407,500 $13
South Inkai 669,800 $17
Karatau 633,000 $8
Akbastau 366,900 $13
Zarechnoye 465,500 $17
Kharasan 71,100 N/A
Willow Creek 16,500 N/A
Q1 2011 Financial Review
Revenue of $101.9 million was recorded in Q1 2011, 187% higher compared to
revenue of $35.5 million in Q1 2010 due to an increase in both sales volumes
and the average realized sales price.
Operating expenses per pound sold decreased by 22% to $14 per pound in Q1 2011
from $18 per pound in Q1 2010, mainly due to lower cash costs at South Inkai
and Karatau.
The decrease in total average operating expense combined with increased
revenue resulted in a 428% increase in earnings from mine operations to $51.2
million in Q1 2011, compared to $9.7 million in Q1 2010.
Attributable inventory as at March 31, 2011 was 3.6 million pounds, which
includes work in progress as well as finished product ready to be shipped or
in transit.
Net income during Q1 2011 was $14.0 million, or $0.01 per share compared to a
loss of $1.4 million or nil per share during Q1 2010.
The adjusted earnings for Q1 2011 were $14.7 million, or $0.02 per share
compared to an adjusted net loss of $10.4 or $0.02 per share in Q1 2010.
Consolidated cash and cash equivalents were $371.8 million as at March 31,
2011 compared to $324.4 million at December 31, 2010. Working capital was
$225.2 million at March 31, 2011.
The following table provides a summary of key financial results:
Q1 2011 Q1 2010
Attributable production (lbs)(1) 2,308,200 1,720,200
Attributable sales (lbs) (1) 1,681,700 764,400
Average realized sales price ($ per lb)(2) 61 46
Average cash cost of production sold ($ per 14 18
lb)(2)
Revenues ($ millions) 101.9 35.5
Earnings from mine operations ($ millions) 51.2 9.7
Net earnings / (loss) ($ millions) 14.0 (1.4)
Net earnings / (loss) per share - basic and 0.01 (0.00)
diluted($ per share)
Adjusted net earnings / (loss) ($ millions 14.7 (10.4)
)(2)
Adjusted net earnings / (loss) per share - 0.02 (0.02)
basic and diluted ($ per share)(2)
Notes:
1 Attributable production and sales are from assets owned and in commercial
production during the period (For Q1 2011: Akdala, South Inkai, Karatau,
Akbastau and Zarechnoye; for Q1 2010: Akdala, South Inkai and Karatau
only).
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 consolidated financial statements:
3 months ended
Mar 31, Mar 31,
2011 2010
$`millio $`millio
ns ns
Net earnings / (loss) 14.0 (1.4)
Fair value adjustments - (10.4)
Impairment of mineral interest, plant and equipment and - 1.2
closure costs
Corporate development expenditure 0.7 -
Gain on sale of available for sale securities - 0.1
Adjusted net earnings / (loss) 14.7 (10.5)
Adjusted net earnings / (loss) per 0.02 (0.02)
share - basic ($)
Adjusted net earnings / (loss) per 0.02 (0.02)
share - diluted ($)(1)
Weighted average number of shares 957.2 587.3
(millions) - basic
Weighted average number of shares 1,049.7 587.3
(millions) - diluted
Notes:
(1) The diluted earnings per share includes an adjustment increasing earnings
and the weighted average number of shares.
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 the first
quarter 2011 results on Wednesday, May 11, 2010 starting at 10:00 a.m.
(Eastern Time). Participants may join the call by dialing 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 May 11, 2011 by
dialing 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
61777179. 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: + 1 647 788 8500
Anton Jivov
Manager, Corporate Development and Investor Relations
Tel: +1 647 788 8461
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, 2010 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
May 11, 2011
Date: 11/05/2011 13:01:01 Produced by the JSE SENS Department.
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