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, Aug. 8, 2011 /CNW/ --
TORONTO, Canada and JOHANNESBURG, South Africa, Aug. 8, 2011 /CNW/ -
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 U(3)O(8 )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 Production| Q2 Total Cash Costs |
| | (lbs U(3)O(8)) |(per lb sold U(3)O(8))|
|____________|__________________________|______________________|
|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 $233.3 million at June 30, 2011.
The following table provides a summary of key financial results:
FINANCIAL Q2 2011 Q2 2010 YTD 2011 YTD 2010
Attributable production (lbs) ( 2,240,900 1,780,000 4,549,100 3,500,200
(1))
Attributable sales (lbs)( (1)) 1,952,100 1,517,500 3,633,700 2,281,900
Average realized sales price ($ 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 0.03 0.01 0.05 0.01
and 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, 2011 Jun 30, 2010 Jun 30, 2011 Jun 30, 2010
$'millions $'millions $'millions $'millions
Net earnings 29.7 5.4 43.7 4.0
Fair value (3.4) (6.7) (3.4) (17.1)
adjustments
Impairment of - 0.7 - 1.9
mineral interest,
plant and
equipment and
closure costs
Corporate 0.2 - 0.9 -
development
expenditure
Restructuring 0.6 - 0.6 -
costs
Gain on sale of - 8.3 - 8.4
available for
sale securities
Adjusted net 27.1 7.7 41.8 (2.8)
earnings / (loss)
Adjusted net 0.03 0.01 0.04 (0.00)
earnings / (loss)
per share - basic
($)
Adjusted net 0.03 0.01 0.04 (0.00)
earnings / (loss)
per share -
diluted ($) ((1))
Weighted average 957.2 587.5 957.2 587.5
number of shares
(millions) -
basic
Weighted average 1,049.7 680.3 1,049.7 680.3
number of 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 U(3)O(8).
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.
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.
To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/August2011/08/c2391.html
Chris Sattler
Chief Executive Officer
Tel: 1 647 788 8500
Anton Jivov
Manager, Corporate Development and Investor Relations
Tel: 1 647 788 8461