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, Nov. 7, 2011 /CNW/ - 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.
2012 - Estimated capital expenditure in
$'millions
Wellfield Plant and Total Ownership Total
development equipment and %
other
Mine / project 100% Attributable
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 -
Kazakhstan 145 219 364 181
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 -
Australiaand
United States 40 20 60 48
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 $250.1 million.
The following table provides a
summary of key financial
results: FINANCIAL Q3 2011 Q3 2010 YTD 2011 YTD 2010
Attributable production (lbs)
(1) 2,351,900 1,691,600 6,901,000 5,190,900
Attributable sales (lbs)(1) 3,086,500 1,701,300 6,720,200 3,983,200
Average realized sales price ($
per lb)(2) 51 43 56 44
Average cash cost of production
sold($ per lb)(2) 14 12 14 14
Revenues ($ millions) 157.7 73.1 372.5 174.6
Earnings from mine operations
($ millions) 73.7 27.9 186.6 62.2
Net earnings / (loss) ($
millions) 45.8 (44.8) 89.5 (40.8)
Net earnings / (loss) per share
- basic and diluted ($ per
share) 0.05 (0.08) 0.09 (0.07)
Adjusted net earnings / (loss)
($ millions)(2) 46.2 (6.3) 85.9 (6.2)
Adjusted net earnings / (loss)
per share - basic and diluted
($ per share)(2) 0.05 (0.01) 0.09 (0.01)
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 9months ended
Sep 30, 2011 Sep 30, 2010 Sep 30, 2011 Sep 30, 2010
$'million $'million $'million $'million
Net earnings /
(loss) 45.8 (44.8) 89.5 (40.8)
Fair value
adjustments (1.3) 30.8 (6.8) 13.7
Impairment of
mineral interest,
plant and
equipment and
closure costs - - - 1.9
Corporate
development
expenditure 0.1 5.5 1.0 8.5
Restructuring
costs 1.6 - 2.2 -
Loss on sale of
available for
sale securities - 2.2 - 10.5
Adjusted net
earnings / (loss) 46.2 (6.3) 85.9 (6.2)
Adjusted net
earnings / (loss)
per share - basic
and diluted ($) 0.05 (0.01) 0.09 (0.01)
Weighted average
number of shares
(millions) -
basic and diluted 957.2 588.0 957.2 587.7
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 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.
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.
Uranium One Inc.
CONTACT: Chris Sattler
Chief Executive Officer
Tel: 1 647 788 8500
Anton Jivov
Manager, Corporate Development and Investor Relations
Tel: 1 647 788 8461