| Wed 10 Aug 2011, 9:44 | | UUU - Uranium One Inc - News Release |
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UUU
UUU
UUU - Uranium One Inc - News Release
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
August 8, 2011
Uranium One Reports Increase in Quarterly Net Earnings to $29.7 Million and
Average Cash Cost per Pound Sold of $15 for Q2 2011
Toronto, Canada and Johannesburg, South Africa - Uranium One Inc. ("Uranium
One") today reported quarterly revenue of $112.9 million for Q2 2011 based on
sales of 2.0 million pounds at an average realized sales price of $58 per
pound at a total cash cost per pound sold of $15. Quarterly production was 2.4
million pounds. Net earnings during Q2 2011 were $29.7 million, or $0.03 per
share.
Q2 2011 Highlights
Operational
- Total attributable production during Q2 2011 was 2.4 million pounds, 33%
higher than total attributable production of 1.8 million pounds during Q2
2010.
- The average total cash cost per pound sold was $15 during Q2 2011,
similar to the average cash cost per pound sold during Q2 2010.
Financial
- Attributable sales volumes during Q2 2011 were 2.0 million pounds, 33%
higher than 1.5 million pounds sold during Q2 2010.
- Revenue was $112.9 million in Q2 2011, 71% higher than $66.0 million in
Q2 2010.
- The average realized sales price during Q2 2011 was $58 per pound
compared to $43 per pound in Q2 2010. The average spot price in Q2 2011
was $56 per pound.
- Earnings from mine operations were $61.7 million during Q2 2011, a 151%
increase from earnings from mine operations of $24.6 million in Q2 2010
due to increased sales volumes and an increase in the realized sales
price and similar operating expenses.
- Net earnings during Q2 2011 increased by 450% to $29.7 million, or $0.03
per share compared to net earnings of $5.4 million, or $0.01 per share Q2
2010.
- Adjusted net earnings during Q2 2011 increased by 252% to $27.1 million,
or $0.03 per share compared to adjusted net earnings of $7.7 million, or
$0.01 per share in Q2 2010.
Corporate
- On June 7, 2011, Uranium One announced that its 51% shareholder, ARMZ,
had completed the acquisition of Mantra Resources Ltd. Uranium One became
the operator of Mantra`s Mkuju River Project in Tanzania pursuant to
agreements entered into with ARMZ in connection with the closing.
Chris Sattler, Chief Executive Officer of Uranium One, commented:
"The Uranium One team continues to post strong operational and financial
results in 2011. This quarter saw a continued low cash cost with a higher than
market average sales price. Following the close of ARMZ`s Mantra Resources
acquisition, Uranium One became the operator of the Mkuju River Project and we
continue to focus on integrating Mantra Resources and updating the Mkuju River
Definitive Feasibility Study."
Outlook
The serious incident at Fukushima will have near-term impacts on uranium
demand due to loss of capacity, program delays and extended outages due to
inspections and upgrades; however, broader growth rates for nuclear power
remain robust on the strength of the emerging markets of China, India, Russia
and the Middle East. The Corporation believes that market conditions will
continue to be favourable for lower cost, diversified producers like Uranium
One.
Uranium One`s total attributable production guidance for 2011 remains at 10.5
million pounds and 12.5 million pounds in 2012.
Uranium One`s attributable sales estimate for 2011 continues to be
approximately 9.5 million pounds and 12.0 million pounds in 2012.
Excluding optional quantities under off-take agreements negotiated with ARMZ
and the JUMI consortium, the Corporation currently has contracts for the sale
of an aggregate of 21 million attributable pounds to utility customers,
including 5 million pounds which will be sold at an average fixed price of $67
per pound (subject to escalation) and 11 million pounds which has been
contracted with weighted average floor prices of approximately $47 per pound.
The remainder of contracted attributable sales are not subject to floors or
ceilings and such sales are related to the market price of U3O8 at the time of
delivery.
The Corporation reduced its attributable capital expenditures estimate for
2011 to $215 million from $234 million. The new estimate includes $71 million
for wellfield development, $21 million for resource definition drilling and
$123 million for plant and equipment. The reduction was due to the deferral of
the Moore Ranch project, offset partially by the expansion of the Willow Creek
satellite facility and increased wellfield development.
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 remain
estimated at $7 million.
Q2 2011 Operations and Projects
During Q2 2011, Uranium One achieved attributable production of 2.4 million
pounds, an increase of 33% over attributable production of 1.8 million pounds
Q2 2010.
Operational results for Uranium One`s assets during Q2 2011 were:
Asset Q2 Attributable Q2 Total Cash Costs
Production (per lb sold U3O8)
(lbs U3O8)
Akdala 480,100 $14
South Inkai 620,700 $17
Karatau 568,800 $8
Akbastau 325,000 $11
Zarechnoye 246,300 $20
Kharasan 78,700 N/A(1)
Willow Creek 42,800 N/A(2)
Notes:
1. The Kharasan Uranium Project has commenced production but is in the
commissioning stage. Commissioning will be completed when a pre-
defined operating level, based on the design of the plant, is
maintained and the Kazakhstan Government has issued an operating
license.
2. Commissioning at the Willow Creek Project commenced on December 20,
2010 with operation of the initial well field at Christensen Ranch.
Commissioning will be completed when a pre-defined operating level,
based on the design of the plant, is maintained.
Q2 2011 Financial Review
Revenue of $112.9 million was recorded in Q2 2011, 71% higher compared to
revenue of $66 million in Q2 2010 due to an increase in both sales volumes and
the average realized sales price and similar operating expenses.
Earnings from mine operations increased by 151% to $61.7 million in Q2 2011,
compared to $24.6 million in Q2 2010.
Attributable inventory as at June 30, 2011 was 3.9 million pounds, which
includes work in progress as well as finished product ready to be shipped or
in transit.
Net earnings during Q2 2011 was $29.7 million, or $0.03 per share compared to
$5.4 million or $0.01 per share during Q2 2010.
The adjusted net earnings for Q2 2011 was $27.1 million, or $0.03 per share
compared to $7.7 million or $0.01 per share in Q2 2010.
Consolidated cash and cash equivalents were $318.4 million as at June 30, 2011
compared to $324.4 million at December 31, 2010. Working capital was $233.3
million at June 30, 2011.
The following table provides a summary of key financial results:
FINANCIAL Q2 2011 Q2 2010 YTD 2011 YTD 2010
Attributable production (lbs) (1) 2,240,900 1,780,000 4,549,10 3,500,200
0
Attributable sales (lbs) (1) 1,952,100 1,517,500 3,633,70 2,281,900
0
Average realized sales price ($ 58 43 59 44
per lb) (2)
Average cash cost of production 15 15 15 16
sold ($ per lb)(2)
Revenues ($ millions) 112.9 66.0 214.8 101.5
Earnings from mine operations ($ 61.7 24.6 112.9 34.3
millions)
Net earnings ($ millions) 29.7 5.4 43.7 4.0
Net earnings per share - basic and 0.03 0.01 0.05 0.01
diluted ($ per share)
Adjusted net earnings / (loss) ($ 27.1 7.7 41.8 (2.8)
millions)(2)
Adjusted net earnings / (loss) 0.03 0.01 0.04 (0.00)
per share - basic and diluted ($
per share)(2)
Notes:
1. Attributable production and sales are from assets owned and in
commercial production during the period (For Q2 2011: Akdala, South
Inkai, Karatau, Akbastau and Zarechnoye; for Q2 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:
Jun 30, Jun 30, Jun 30, Jun 30,
2011 2010 2011 2010
$`millions $`millions $`millions $`millions
Net earnings 29.7 5.4 43.7 4.0
Fair value adjustments (3.4) (6.7) (3.4) (17.1)
Impairment of mineral - 0.7 - 1.9
interest, plant and equipment
and closure costs
Corporate development 0.2 - 0.9 -
expenditure
Restructuring costs 0.6 - 0.6 -
Gain on sale of available for - 8.3 - 8.4
sale securities
Adjusted net earnings / 27.1 7.7 41.8 (2.8)
(loss)
Adjusted net earnings / 0.03 0.01 0.04 (0.00)
(loss) per share - basic ($)
Adjusted net earnings / 0.03 0.01 0.04 (0.00)
(loss) per share - diluted
($) (1)
Weighted average number of 957.2 587.5 957.2 587.5
shares (millions) - basic
Weighted average number of 1,049.7 680.3 1,049.7 680.3
shares (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
second quarter 2011 results on Tuesday, August 9, 2011 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 August 9, 2011
by dialing toll free 1-855-859-2056 or 1-416-849-0833 for local calls or calls
from outside Canada and the United States. The pass code for the replay is
85750202. 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.
Date: 10/08/2011 09:44:00 Produced by the JSE SENS Department.
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