Uranium One Announces 23% Increase in Q3 2012 Production to 3.1 Million
Pounds; Average Total Cash Costs of $16 per Pound Sold and Attributable Sales
of 2.9 Million Pounds
TORONTO, Nov. 5, 2012 /CNW/ - Uranium One Inc. ("Uranium One") today reported
quarterly revenue of $142.6 million for Q3 2012 at an average total cash cost
per pound sold of $16 based on sales of 2.9 million pounds at an average
realized sales price of $49 per pound. Attributable production for the quarter
was 3.1 million pounds.
Q3 2012 Highlights
-- Total attributable production during Q3 2012 was 3.1 million
pounds, 23% higher than total attributable production of
2.5 million pounds during Q3 2011.
-- The average total cash cost per pound sold was $16 per pound
during Q3 2012 compared to $14 per pound during Q3 2011.
-- The Kharasan Mine was successfully commissioned and reached
commercial production during Q3 2012.
-- Production of sulphuric acid commenced in July 2012 at the
Corporation's SKZ-U joint venture.
-- Attributable sales volumes for Q3 2012 were 2.9 million pounds,
compared to 3.1 million pounds sold during Q3 2011.
-- Revenue was $142.6 million in Q3 2012, compared to $157.7
million in Q3 2011. The average realized sales price during
Q3 2012 was $49 per pound compared to $51 per pound in Q3 2011.
The average spot price in Q3 2012 was $49 per pound.
-- Earnings from mine operations were $58.8 million during Q3
2012, compared to earnings from mine operations of
$73.7 million in Q3 2011.
-- The net loss for Q3 2012 was $61.6 million or $0.06 per share,
compared to net earnings of $45.8 million or $0.05 per share
for Q3 2011.
-- The adjusted net earnings for Q3 2012 were $7.6 million or
$0.01 per share, compared to adjusted net earnings of
$46.4 million or $0.05 per share for Q3 2011.
-- The Company determined that it would not be economical to mine
the South Zarechnoye deposit due to the decrease in uranium
prices since the Fukushima incident, together with a decrease
in the South Zarechnoye resource base resulting from recent
exploration results and the completion of an economic
assessment. The carrying value of the Zarechnoye Mine was
therefore written down by $79.1 million, net of deferred taxes
of $11.1 million.
-- The Corporation now owns 100% of the Honeymoon project after
receiving all regulatory approvals for the withdrawal of Mitsui
from the joint venture. The Corporation recognized a gain of
$17.2 million as a result of the transaction.
-- The United Arab Emirates announced the award of $3 billion
worth of fuel supply contracts to six global suppliers,
including Uranium One. This long term contract will meet a
portion of the uranium requirements of the Barakah Nuclear
Power Station scheduled to start up by 2017.
-- Uranium One also concluded its first Chinese contract during Q3
2012, which calls for the supply of uranium to China Guangdong
Nuclear Power Corporation in 2012 and 2013.
-- On October 15, 2012, the Tanzanian government issued an
environmental impact assessment certificate to Mantra Tanzania
in respect of the Mkuju River Project. Issuance of the
certificate completes Mantra's application for a Special Mining
License for the Project and represents a significant permitting
Chris Sattler, Chief Executive Officer of Uranium One, commented:
"Despite volatility in the uranium price over the last several weeks, our view
of the positive long-term fundamentals for our industry has not changed. We
remain focused on achieving our production, cost and sales targets for our
operations. We are well-positioned to take advantage of projected higher
uranium prices with our diversified and low cost production portfolio and our
strategy of remaining an unhedged producer."
Market prices for Q3 2012 ranged between $46.50 and $49.50 per pound U(3)O(8)
(month-end UxC spot). After trading at or above $50 per pound for the better
part of one year, the uranium market broke through that level as a result of
ample spot supplies meeting demand of a more discretionary nature. This became
even more pronounced in the early part of Q4 2012 with the price currently
residing at around $41. Selling activity has been dominated by producers
closing sales for year-end cash flow, and by traders unwinding long positions
or engaged in short-selling. Fundamentals for the medium and long term,
however, remain positive, especially following the announced deferrals of a
number of large, high profile uranium mining projects.
The Corporation's total attributable production guidance for 2012 remains at
11.6million pounds. Total attributable production for 2013 is estimated to
be 12.5 million pounds as shown below.
| Operation | 2013 Attributable |
| |Production Estimate (M lbs)|
|Akdala | 1.8 |
|South Inkai | 3.3 |
|Karatau | 2.6 |
|Akbastau | 1.9 |
|Zarechnoye | 1.1 |
|Kharasan | 0.5 |
|Willow Creek| 0.8 |
|Honeymoon | 0.5 |
|Total | 12.5 |
Attributable production for 2014 is estimated to be 13.0 million pounds.
During 2013, the average cash cost per pound sold is expected to be
approximately $19 per pound, in line with our guidance of $19 per pound for
| Operation |2013 Total Cash Cost |
| |per Pound Sold ($/lb)|
|Akdala | $15 |
|South Inkai | $19 |
|Karatau | $13 |
|Akbastau | $13 |
|Zarechnoye | $26 |
|Kharasan | $30 |
|Willow Creek | $27 |
|Honeymoon | $37 |
|Weighted Average| $19 |
Sales volumes for 2012 are heavily weighted towards the last quarter of the
year, and the Corporation expects to achieve guidance for sales of 11 million
pounds in 2012. The Corporation expects attributable sales to be approximately
12.5 million and 13.0 million pounds in 2013 and 2014, respectively.
The Corporation expects to incur attributable capital expenditures in 2013 of
$107million for wellfield development and $66million for plant and
equipment, totalling $173 million for its assets in Kazakhstan, the United
States and Australia.
2013 - ESTIMATED CAPITAL EXPENDITURE IN $
MINE / PROJECT PLANT AND
WELLFIELD EQUIPMENT TOTAL OWNERSHIP TOTAL
DEVELOPMENT AND OTHER %
Akdala 11 21 32 70% 22
South Inkai 31 25 56 70% 39
Karatau 30 22 52 50% 26
Akbastau 25 16 41 50% 21
Zarechnoye 32 4 36 49.67% 18
Kharasan 30 4 34 30% 10
SKZ-U - 4 4 19% 1
Subtotal - Kazakhstan 159 96 255 137
Australia and United
Honeymoon 5 3 8 100% 8
Willow Creek and the 20 6 26 100% 26
Powder River Basin
Other - 2 2 2
Subtotal - Australia 25 11 36 36
and United States
Total 184 107 291 173
In 2013, general and administrative expenses, excluding non-cash items, are
expected to be approximately $40 million and exploration expenses are expected
to be $8 million.
Q3 2012 Operations and Projects
During Q3 2012, Uranium One achieved attributable production of 3.1 million
pounds, an increase of 23% over attributable production of 2.5 million pounds
for the comparable period in 2011.
Operational results for Uranium One's assets during Q3 2012 were:
|Asset |Q3 Attributable Production| Q3 Total Cash Costs |
| | (lbs U(3)O(8)) |(per lb sold U(3)O(8))|
|Akdala | 494,400 | $13 |
|South Inkai | 903,400 | $18 |
|Karatau | 722,300 | $11 |
|Akbastau | 345,400 | $11 |
|Zarechnoye | 312,300 | $24 |
|Kharasan ((1)) | 117,100 | $28 |
|Willow Creek((1))| 186,400 | - |
|Honeymoon | 11,200 | N/A |
(1) Attributable production and sales are from assets owned and in
commercial production during the period. Willow Creek and Kharasan
reached commercial production levels effective from May 1, 2012 and
July 1, 2012, respectively and sales and production results for
mines are included in the operating results for the periods after
Q3 2012 Financial Review
Revenue was $142.6 million in Q3 2012, compared to $157.7 million in Q3 2011.
The average realized sales price during Q32012 was $49per pound compared
to $51 per pound in Q3 2011. The average spot price in Q3 2012 was $49 per
Operating expenses per pound sold were $16 for Q3 2012 compared to $14 in Q3
Earnings from mine operations were $58.8 million during Q3 2012, compared to
earnings from mine operations of $73.7million in Q3 2011.
Attributable inventory as at September 30, 2012 was 5.6 million pounds, which
includes work in progress as well as finished product. Finished product at
conversion facilities awaiting pre-scheduled deliveries into sales contracts
was 0.9 million pounds at September 30, 2012.
The net loss for Q3 2012 was $61.6 million or $0.06 per share, compared to net
earnings of $45.8 million or $0.05 per share for Q32011.
The adjusted net earnings for Q3 2012 were $7.6 million or $0.01 per share,
compared to adjusted net earnings of $46.4million or $0.05per share for Q3
Consolidated cash and cash equivalents were $442.3 million as at September 30,
2012 compared to $619.0 million at December 31, 2011. Working capital was
$628.7 million at September 30, 2012.
The following table provides a summary of key financial results:
FINANCIAL Q3 2012 Q3 2011 YTD 2012 YTD 2011
Attributable production (lbs) (
(1)) 3,081,300 2,351,900 8,452,600 6,901,000
Attributable sales (lbs)( (1)) 2,865,800 3,086,500 6,558,800 6,720,200
Average realized sales price ($
per lb)( (2)) 49 51 51 56
Average total cash cost per
pound sold( )($ per lb)((2)) 16 14 15 14
Revenues ($'millions) 142.6 157.7 335.3 372.5
Earnings from mine operations
($'millions) 58.8 73.7 148.2 186.6
Net (loss) /earnings
($'millions) (61.6) 45.8 (27.9) 89.5
Net (loss) / earnings per share
- basic and diluted ($ per
share) (0.06) 0.05 (0.03) 0.09
Adjusted net earnings
($'millions)((2)) 7.6 46.4 33.3 86.8
Adjusted net earnings per share
- basic ($ per share)((2)) 0.01 0.05 0.03 0.09
(1) Attributable production and sales are from assets owned and in
commercial production during the period.
Willow Creek and Kharasan reached commercial production levels
effective from May 1, 2012 and July 1,
2012, respectively and sales and production results for these mines
are included in the operating results
for the periods after these dates.
(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:
(US DOLLARS IN 3 MONTHS ENDED 9 MONTHS ENDED
PER SHARE SEP 30, 2012 SEP 30, 2011 SEP 30, 2012 SEP 30, 2011
AMOUNTS) $'MILLIONS $'MILLIONS $'MILLIONS $'MILLIONS
Net (loss) / (61.6) 45.8 (27.9) 89.5
Fair value - (1.3) 0.3 (6.8)
Impairment 79.1 - 79.1 -
charges (net of
deferred taxes of
Gain on business (17.2) - (17.2) -
Care and 0.3 0.2 1.2 0.9
Corporate 0.2 0.1 2.6 1.0
Restructuring 1.5 1.6 1.5 2.2
Ruble bond hedge 5.3 - 4.1 -
Non-recurring - - (10.4) -
Adjusted net 7.6 46.4 33.3 86.8
Adjusted net 0.01 0.05 0.03 0.09
share - basic ($)
Adjusted net 0.01 0.05 0.03 0.09
share - diluted
Weighted average 957.2 957.2 957.2 957.2
number of shares
Weighted average 957.2 957.2 957.2 957.2
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 third
quarter 2012 results on Tuesday, November 6, 2012 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 or at Uranium One's website at
A recording of the conference call will be available for replay for a two week
period beginning at approximately 11:30 p.m. (Eastern Time) on November 6,
2012 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 55321879. 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, Australia and Tanzania.
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 profile of Uranium One Inc. 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 quantity 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, the timing of uranium
processing facilities being fully operational, costs of production, capital
expenditures, costs and timing of the development of new deposits, success of
exploration activities, permitting time lines, currency fluctuations, market
conditions, corporate plans, objectives and goals, requirements for additional
capital, government regulation of mining operations, the estimation of mineral
resources and reserves, the realization of resource and reserve estimates,
environmental risks, unanticipated reclamation expenses, the timing and
potential effects of proposed acquisitions, 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 projects
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, possible shortages of sulphuric acid in Kazakhstan, possible
changes to the tax code in Kazakhstan, 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, 2011, 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
For further information about Uranium One, please visit www.uranium1.com.
Chris Sattler Chief Executive Officer Tel: +1 647 788 8500
Anton Jivov Vice President, Corporate Affairs Tel: +1 647 788 8461
SOURCE: Uranium One Inc.
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