| Tue 8 Nov 2011, 9:03 | | UUU - Uranium One Inc - Uranium One Reports Record Sales of 3.1 Million Pounds |
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UUU
UUU
UUU - Uranium One Inc - Uranium One Reports Record Sales of 3.1 Million Pounds
at an Average Cash Cost of $14 per Pound Sold and Net Earnings of $45.8 Million
for Q3 2011
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 7, 2011
Uranium One Reports Record Sales of 3.1 Million Pounds at an Average Cash Cost
of $14 per Pound Sold and Net Earnings of $45.8 Million for Q3 2011
Toronto, Canada - Uranium One Inc. ("Uranium One") today reported record
quarterly revenue of $157.7 million for Q3 2011 based on sales of 3.1 million
pounds at an average realized sales price of $51 per pound and an average cash
cost of $14 per pound sold. Quarterly production was 2.5 million pounds. Net
earnings during Q3 2011 were $45.8 million, or $0.05 per share.
Highlights
Operational
* Total attributable production during Q3 2011 was a record 2.5 million
pounds, 47% higher than total attributable production of 1.7 million pounds
during Q3 2010. Attributable production during October 2011 was 1.0
million pounds.
* The average cash cost per pound sold was $14 during Q3 2011, 17% higher
than the average cash cost per pound sold during Q3 2010.
Financial
* Attributable sales volumes during Q3 2011 were a record 3.1 million pounds,
82% higher than 1.7 million pounds sold during Q3 2010.
* Revenue was a record $157.7 million in Q3 2011, 116% higher than $73.1
million in Q3 2010. The average realized sales price during Q3 2011 was
$51 per pound compared to $43 per pound in Q3 2010. The average spot price
in Q3 2011 was $51 per pound.
* Earnings from mine operations were $73.7 million during Q3 2011, a 164%
increase from earnings from mine operations of $27.9 million in Q3 2010 due
to increased sales volumes and an increase in the realized sales price.
* Net earnings during Q3 2011 were $45.8 million, or $0.05 per share compared
to a net loss of $44.8 million or $0.08 per share during Q3 2010.
* Adjusted net earnings during Q3 2011 were $46.2 million, or $0.05 per share
compared to an adjusted net loss of $6.3 million or $0.01 per share in Q3
2010.
Chris Sattler, Chief Executive Officer of Uranium One, commented:
"With record production and sales during the quarter, as well as continued low
cash costs, 2011 is shaping up to be a solid year for Uranium One financially.
Our focus remains on achieving our operational targets and we look forward to
the completion of a revised feasibility study for the Mkuju River Project in
Tanzania in the new year."
Outlook
The serious incident at Fukushima is continuing to have a near-term impact 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.
The total attributable production guidance remains at 10.5 million pounds for
2011. Total attributable production for 2012 is estimated to be 11.6 million
pounds as shown below.
Operation 2012 Attributable
Production Estimate (M lbs)
Akdala 1.8
South Inkai 3.4
Karatau 2.6
Akbastau 1.5
Zarechnoye 1.1
Kharasan 0.4
Powder River Basin 0.5
Honeymoon 0.3
Total 11.6
Attributable production for 2013 is estimated to be 12.5 million pounds.
During 2012, the average cash cost per pound sold is expected to be
approximately $19 per pound compared to guidance of $18 per pound during 2011.
Operation 2012 Total Cash Cost
per Pound Sold ($/lb)
Akdala $16
South Inkai $20
Karatau $13
Akbastau $18
Zarechnoye $22
Powder River Basin $30
Honeymoon $47
Weighted Average $19
The Corporation expects attributable sales to be approximately 11.0 million
pounds during 2012 and 12.5 million pounds in 2013.
The Corporation expects to incur attributable capital expenditures in 2012 of
$229 million, of which approximately $44 million has been deferred from 2011.
Mine / project 2012 - Estimated capital expenditure in
$`millions
Wellfield Plant and Total Ownershi Total
developme equipment p %
nt and other
100% Attributab
le
Kazakhstan
Akdala 10 17 27 70% 19
South Inkai 30 21 51 70% 36
Karatau 26 26 52 50% 26
Akbastau 38 76 114 50% 57
Zarechnoye 28 14 42 49.67% 21
Kharasan (1) 13 54 67 30% 20
SKZ-U - 11 11 19% 2
Subtotal - 145 219 364 181
Kazakhstan
Australia and United
States
Honeymoon 8 17 25 51% 13
Powder River Basin 32 1 33 100% 33
Great Divide Basin - 1 1 100% 1
Other - 1 1 1
Subtotal - Australia 40 20 60 48
and United States
Totals: 185 239 424 229
(1) - Sales during commissioning are offset against the estimated capital
expenditure
In 2012, general and administrative expenses (excluding non-cash items) are
expected to be approximately $39 million, and exploration expenses are expected
to be $11 million.
Q3 2011 Operations and Projects
During Q3 2011, Uranium One achieved record attributable production of 2.5
million pounds, an increase of 47% over attributable production of 1.7 million
pounds Q3 2010.
Operational results for Uranium One`s assets during Q3 2011 were:
Asset Q3 Attributable Production Q3 Total Cash Costs
(lbs U3O8) (per lb sold U3O8)
Akdala 496,100 $13
South Inkai 690,800 $19
Karatau 691,900 $9
Akbastau 261,700 $13
Zarechnoye 211,400 $21
Kharasan 90,400 n/a(1)
Powder River Basin 57,500 n/a(2)
Honeymoon 22,700 n/a(3)
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 in December 2010.
Commissioning will be completed when a pre-defined operating level, based
on the design of the plant, is maintained.
3 Commissioning at the Honeymoon Project commenced in September 2011.
Commissioning will be completed when a pre-defined operating level, based
on the design of the plant, is maintained.
Q3 2011 Financial Review
Revenue was a record $157.7 million in Q3 2011, 116% higher than $73.1 million
in Q3 2010. The average realized sales price during Q3 2011 was $51 per pound
compared to $43 per pound in Q3 2010. The average spot price in Q3 2011 was $51
per pound.
Earnings from mine operations were $73.7 million during Q3 2011, a 164% increase
from earnings from mine operations of $27.9 million in Q3 2010 due to increased
sales volumes and an increase in the realized sales price.
Net earnings during Q3 2011 were $45.8 million, or $0.05 per share compared to a
net loss of $44.8 million or $0.08 per share during Q3 2010.
Adjusted net earnings during Q3 2011 were $46.2 million, or $0.05 per share
compared to an adjusted net loss of $6.3 million or $0.01 per share in Q3 2010.
On September 30, 2011, the Corporation had cash and cash equivalents of $356.1
million, compared to $324.4 million at December 31, 2010. Working capital was
$250.1 million.
The following table provides a Q3 2011 Q3 2010 YTD 2011 YTD 2010
summary of key financial
results:FINANCIAL
Attributable production (lbs) 2,351,900 1,691,60 6,901,000 5,190,900
(1) 0
Attributable sales (lbs) (1) 3,086,500 1,701,30 6,720,200 3,983,200
0
Average realized sales price ($ 51 43 56 44
per lb) (2)
Average cash cost of production 14 12 14 14
sold ($ per lb)(2)
Revenues ($ millions) 157.7 73.1 372.5 174.6
Earnings from mine operations ($ 73.7 27.9 186.6 62.2
millions)
Net earnings / (loss) ($ 45.8 (44.8) 89.5 (40.8)
millions)
Net earnings / (loss) per share 0.05 (0.08) 0.09 (0.07)
- basic and diluted ($ per
share)
Adjusted net earnings / (loss) 46.2 (6.3) 85.9 (6.2)
($ millions)(2)
Adjusted net earnings / (loss) 0.05 (0.01) 0.09 (0.01)
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 Q3 2011: Akdala, South Inkai, Karatau,
Akbastau and Zarechnoye; for Q3 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 9 months ended
Sep 30, Sep 30, Sep 30, Sep 30,
2011 2010 2011 2010
$`milli $`millio $`millio $`milli
on n n on
Net earnings / (loss) 45.8 (44.8) 89.5 (40.8)
Fair value adjustments (1.3) 30.8 (6.8) 13.7
Impairment of mineral interest, plant - - - 1.9
and equipment and closure costs
Corporate development expenditure 0.1 5.5 1.0 8.5
Restructuring costs 1.6 - 2.2 -
Loss on sale of available for sale - 2.2 - 10.5
securities
Adjusted net earnings / (loss) 46.2 (6.3) 85.9 (6.2)
Adjusted net earnings / (loss) per 0.05 (0.01) 0.09 (0.01)
share - basic and diluted ($)
Weighted average number of shares 957.2 588.0 957.2 587.7
(millions) - basic and diluted
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 third
quarter 2011 results on Tuesday, November 8, 2011 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 November 8, 2011
by dialling 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
22298788. 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: 08/11/2011 09:03:01 Produced by the JSE SENS Department.
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