| Tue 15 Aug 2006, 16:28 | | sxr Uranium One Inc - Uranium One Announces Financ |
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SXR
SXR
sxr Uranium One Inc - Uranium One Announces Financial Results for Q2 2006
sxr Uranium One Inc.
26 Wellington Street East, Suite 820
Toronto, Ontario M5E 1S2
Share code on the JSE: SXR & ISIN: CA87112P1062
Share code on the TSX: SXR & ISIN: CA87112P1062
Trading Symbol: SXR - Toronto Stock Exchange, Johannesburg Stock Exchange
NEWS RELEASE
August 15, 2006 Toronto, Ontario
Uranium One Announces Financial Results for Q2 2006
Toronto, Ontario and Johannesburg, South Africa - sxr Uranium One Inc. ("Uranium
One") today reported unaudited financial results for the quarter ended June 30,
2006. All figures are in US dollars unless otherwise indicated.
Complete details of the June 30, 2006 financial statements and management"s
discussion and analysis of the second quarter, along with trends and factors
which are likely to impact the balance of the 2006 financial year, can be found
on Uranium One"s website at www.uranium1.com as well as SEDAR at www.sedar.com.
Highlights during the quarter include:
- Announcement on June 14, 2006 of an updated mineral resources declaration
for the Dominion Project, audited by SRK Consulting. The revised mineral
resource estimate shows a uranium resource of 25,990,000 tonnes at a grade
of 0.83 kg/t containing 47,492,000 pounds of U3O8 in the indicated category
and an additional 178,422,000 tonnes at a grade of 0.51 kg/t containing
199,193,598 pounds U3O8 in the inferred category. This represents a 195%
increase in indicated resources and a 36% increase in inferred resources
over the estimates contained in the December 2005 independent technical
report on the Dominion property prepared by SRK Consulting (available on
SEDAR). The cut off grades have decreased significantly as a result of
applying a more recent uranium price of $45.00 per lb U3O8 and inclusion
for the first time of gold by-products in the calculation of the cut off
grades allowing for the extraction of the orebody at lower grades. As a
result, the average mineral resource grades have decreased from 0.99 kg/t
to 0.83 kg/t in the indicated category and from 0.66 kg/t to 0.51 kg/t in
the inferred category. In addition, the revised resource estimate shows a
gold resource at Dominion of 25,990,000 tonnes at a grade of 1.09 g/t
containing 910,000 ounces in the indicated category (a 163% increase from
the 346,000 ounces previously reported) and an additional 178,422,000
tonnes at a grade of 0.63 g/t containing 3,614,000 ounces in the inferred
category (a 63% increase from the 2,213,000 ounces previously reported).
- Announcement on July 28, 2006 of the results of the Phase I Feasibility
Study on the Dominion Project and of a conceptual study to extend the
project to a 30-year life of mine. The Feasibility Study demonstrates that
Phase I of the project, which covers the first 11 years of the mine life,
is financially viable and robust. Metal recovery has been optimised at a
maximum mining cut of 1.6m where the channel width is higher, resulting in
a probable reserve of 31,327,000 pounds of uranium oxide (U3O8) contained
within 18,454,000 tonnes at an average head grade of 0.77 kg/t. Production
at steady state (2011 to 2014) is expected to average 3.8 million pounds of
U3O8 per annum. The average operating cost for Phase I is expected to be
US$14.50 per pound of U3O8, net of gold by-product credits. The after tax,
all equity IRR for Phase I is 32%, and project payback from commencement of
Phase I construction is estimated to be 5 years. The project is on schedule
for production in Q1 2007.
- An announcement on July 10, 2006 of an exclusivity agreement with Rio Tinto
Energy America for the acquisition of the Sweetwater Uranium Mill and the
associated Green Mountain uranium properties in Wyoming and a further
announcement on July 11, 2006 of an exclusivity agreement to acquire the
Shootaring Canyon Uranium Mill and associated uranium properties from U.S.
Energy. Together these acquisitions, if completed, would result in Uranium
One owning two of the four remaining conventional uranium mills in the
United States. These acquisitions would result in Uranium One achieving a
key strategic goal of acquiring the capacity to mine and process uranium in
the United States.
- Announcement by Uranium One"s 75%-owned Aflease Gold subsidiary of its
intention to acquire shares in Randgold and Exploration Company Ltd. The
acquisition would give Aflease Gold an equity interest in Randgold and
Exploration of between 10.0% and 17.4%, which would complement Uranium
One"s existing 11.6% interest in Randgold and Exploration. The transaction
would enable Uranium One to continue to play an important role in ensuring
that shareholder value in Randgold and Exploration is preserved.
- Net gold sales from Bonanza South in Q2 2006 were $0.9 million, with year
to date net gold sales of $1.9 million.
- Interest received of $1.5 million for Q2 2006 and year to date interest
received of $2.3 million.
- General and administrative expenditure of $4.5 million for Q2 2006 and year
to date of $6.1 million was incurred. General and administrative
expenditure indicates the increase in activity levels in the group
inclusive of those on the corporate development front.
- Uranium One converted a large portion of its Canadian cash resources into
South African Rand in anticipation of construction expenditure for the
Dominion Project. As the Rand depreciated against the US dollar during Q2
2006, Uranium One recognised a foreign exchange loss on cash and cash
equivalents of $14.2 million.
- The net loss per share for Q2 2006 was $0.18, with a year to date net loss
per share of $0.21.
- Construction at the Dominion Project is on track and constitutes the
largest portion of the increase in Property, Plant and Equipment to $209.0
million as at June 30, 2006 from $157.3 million as at December 31, 2005.
- Cash balances available at June 30, 2006 reduced to $89.0 million (March
31, 2006: $134.9 million) primarily as a result of the construction
activities at the Dominion Project.
Commenting on the Corporation"s progress, Neal Froneman, President and CEO of
Uranium One said: "We have reached a number of important milestones in pursuing
our strategy of becoming one of the world"s major uranium producers. We have
been able to declare our first uranium reserves with the completed Dominion
feasibility study. We are on target to begin producing uranium in the first
quarter of 2007 and as such within months we will be an active uranium producer
with a steadily increasing uranium production profile. Our global growth
strategy continues to move forward with the recent announcement of two key
acquisition opportunities in the United States. We will continue to develop our
exciting pipeline of uranium projects."
About sxr Uranium One
sxr Uranium One Inc. is a Canadian uranium and gold resource company with a
primary listing on the Toronto Stock Exchange and a secondary listing on the
Johannesburg Stock Exchange. The Corporation owns the Dominion Reefs Uranium
Mine in South Africa and the Honeymoon Uranium Project in South Australia, as
well as a number of exploration projects. The Corporation holds an approximate
75% interest in Aflease Gold Limited, which owns the Modder East gold project in
South Africa. Through a joint venture with Pitchstone Exploration Ltd., the
Corporation is also engaged in uranium exploration activities in the Athabasca
Basin of Saskatchewan.
For further information please contact:
Neal Froneman Chris Sattler
Chief Executive Officer Vice President, Investor Relations
Tel: + 27 11 482 3605 Tel: +1 416 350 3657
Cautionary Statement
No stock exchange, securities commission or other regulatory authority has
approved or disapproved the information contained herein.
This News Release includes certain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 and "forward-
looking information" within the meaning of applicable Canadian legislation. All
statements other than statements of historical fact, included in this release,
including, without limitation, statements regarding potential mineralization and
reserves and future plans and objectives of Uranium One, are forward looking
statements (or forward-looking information) that involve various risks and
uncertainties. There can be no assurance that such statements will prove to be
accurate and actual results and future events could differ materially from those
anticipated in such statements. Important factors could cause actual results to
differ materially from Uranium One"s expectations. Such factors include, among
others, the actual results of exploration activities, actual results of
reclamation activities, the estimation or realization of mineral reserves and
resources, the timing and amount of estimated future production, costs of
production, capital expenditures, costs and timing of the development of new
deposits, availability of capital required to place the company"s property into
production, conclusions of economic evaluations, acceptance of the Dominion
feasibility study by lending institutions, changes in project parameters as
plans continue to be refined, future prices of commodities, possible variations
in ore grade or recovery rates, failure of plant, equipment or processes to
operate as anticipated, accidents, labor disputes and other risks of the mining
industry, delays in obtaining governmental approvals, permits or financing or in
the completion of development or construction activities, Uranium One"s hedging
practices, currency fluctuations, title disputes or claims limitations on
insurance coverage, as well as those factors discussed under "Risk Factors" in
Uranium One"s Annual Information Form and Management"s Discussion and Analysis
as filed with securities regulatory authorities in Canada. Although Uranium One
has attempted to identify important factors that could cause actual results to
differ materially, there may be other factors that cause results not to be as
anticipated, estimated or intended.
There can be no assurance that such 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 does not undertake to update any forward
looking statements that are included herein, except in accordance with
applicable securities laws.
To receive the Corporation"s news releases by email, please register on the
Corporation"s website: www.uranium1.com
Date: 15/08/2006 04:28:07 PM Produced by the JSE SENS Department
