Uranium One Announces 33% Increase in Q1 2011 Production to a Record 2.4 Million Pounds; Average Cash Costs of $14 per Pound
TORONTO and JOHANNESBURG, May 11 /CNW/ --
TORONTO and JOHANNESBURG, May 11 /CNW/ - Uranium One Inc. ('Uranium
One') today reported record quarterly revenue of $101.9 million for Q1
2011 based on sales of 1.7 million pounds at an average realized sales
price of $61 per pound. Quarterly production was a record 2.4 million
pounds at a total cash cost per pound sold of $14.
Q1 2011 Highlights
Operational Results
-- Total attributable production during Q1 2011 was a record 2.4
million pounds, 33% higher than total attributable production
of 1.8 million pounds during Q1 2010.
-- The average total cash cost per pound sold was $14 during Q1
2011, 22% lower than the average cash cost per pound sold of
$18 during Q1 2010.
-- First full quarter of attributable production from the recently
acquired Akbastau and Zarechnoye mines was 366,900 pounds and
231,000 pounds, respectively.
Financial Results
-- Attributable sales volumes during Q1 2011 were 1.7 million
pounds, 120% higher than 0.8 million pounds sold during Q1
2010.
-- Revenue was $101.9 million in Q1 2011, 187% higher than $35.5
million in Q1 2010. The average realized sales price during Q1
2011 was $61 per pound compared to $46 per pound in Q1 2010.
The average spot price in Q1 2011 was $68 per pound.
-- Earnings from mine operations were $51.2 million during Q1
2011, a 428% increase from earning from mine operations of $9.7
million in Q1 2010, due to increased sales volumes, an increase
in the realized sales price, and decreased operating expenses.
-- Net income during Q1 2011 was $14.0 million, or $0.01 per share
compared to a net loss of $1.4 million or nil per share during
Q1 2010.
-- Adjusted net income during Q1 2011 was $14.7 million, or $0.02
per share compared to an adjusted net loss of $10.5 million or
$0.02 per share in Q1 2010.
Corporate
-- On March 21, 2011, ARMZ and Uranium One announced revised terms
for ARMZ's acquisition of Mantra Resources, initially announced
on December 15, 2011. Uranium One's option to acquire Mantra
from ARMZ was also revised to allow for the option period to be
extended to 24 months.
Chris Sattler, Chief Executive Officer of Uranium One, commented:
'The Uranium One team continues to achieve our operational and financial
objectives. This quarter saw continued, low cost growth from our
operations and a smooth integration of our recently acquired Akbastau
and Zarechnoye mines. This is an excellent start to 2011, and provides
a solid platform for the Company to focus on integrating Mantra
Resources following the closing of ARMZ's acquisition in June.'
Outlook
Uranium One's total attributable production guidance for 2011 remains at
10.5 million pounds.
During 2011, the average cash cost per pound sold is expected to be
approximately $18 per pound based on $14 per pound at Akdala, $19 per
pound at South Inkai, $12 per pound at Karatau, $18 per pound at
Akbastau, $21 per pound at Zarechnoye, $25 per pound at the Powder
River Basin and $35 per pound at Honeymoon.
Uranium One's attributable sales estimate for 2011 continues to be
approximately 9.5 million pounds and 12.0 million pounds in 2012.
The Corporation revised its attributable capital expenditures for the
full year 2011 from $244 million to $234 million, of which $74 million
is for wellfield development, $21 million for resource definition
drilling and $139 million for plant and equipment.
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 are expected to be $7 million.
Fukushima
On March 11, 2011, north-eastern Japan suffered the devastating impacts
of a 9.0 magnitude earthquake and subsequent tsunami. These events and
the consequent damage sustained at the Fukushima Dai-ichi nuclear power
plant have, among other things, led to a reduction in uranium demand in
Japan due to the permanent shutdown of the Fukushima facility and
program delays or extended outages at other reactors, as well as a
reduction in spot and term uranium prices.
While the impacts from Fukushima are not yet fully known, spot and term
uranium prices have begun to recover and current indications are that
global uranium demand is expected to be reduced downwards by only 5%
over the next decade. As a result, uranium market conditions are
expected to continue to be positive, particularly for diversified low
cost producers such as Uranium One.
Q1 2011 Operations and Projects
During Q1 2011, Uranium One achieved attributable production of 2.4
million pounds, an increase of 33% over attributable production of 1.8
million pounds for the comparable period in 2010, and 14% higher than
production of 2.1 million pounds recorded in the Q4 2010. The increase
is primarily due to the inclusion of production from the recently
acquired 50% interest in Akbastau and 49.67% interest in Zarechnoye.
Operational results for Uranium One's assets during Q1 2011 were:
______________________________________________________________
| Asset |Q1 Attributable Production| Q1 Total Cash Costs |
| | (lbs U(3)O(8)) |(per lb sold U(3)O(8))|
|____________|__________________________|______________________|
|Akdala | 407,500 | $13 |
|____________|__________________________|______________________|
|South Inkai | 669,800 | $17 |
|____________|__________________________|______________________|
|Karatau | 633,000 | $8 |
|____________|__________________________|______________________|
|Akbastau | 366,900 | $13 |
|____________|__________________________|______________________|
|Zarechnoye | 231,000 | $17 |
|____________|__________________________|______________________|
|Kharasan | 71,100 | N/A |
|____________|__________________________|______________________|
|Willow Creek| 16,500 | N/A |
|____________|__________________________|______________________|
Q1 2011 Financial Review
Revenue of $101.9 million was recorded in Q1 2011, 187% higher compared
to revenue of $35.5 million in Q1 2010 due to an increase in both sales
volumes and the average realized sales price.
Operating expenses per pound sold decreased by 22% to $14 per pound in
Q1 2011 from $18 per pound in Q1 2010, mainly due to lower cash costs
at South Inkai and Karatau.
The decrease in total average operating expense combined with increased
revenue resulted in a 428% increase in earnings from mine operations to
$51.2 million in Q1 2011, compared to $9.7 million in Q1 2010.
Attributable inventory as at March 31, 2011 was 3.6 million pounds,
which includes work in progress as well as finished product ready to be
shipped or in transit.
Net income during Q1 2011 was $14.0 million, or $0.01 per share compared
to a loss of $1.4 million or nil per share during Q1 2010.
The adjusted earnings for Q1 2011 were $14.7 million, or $0.02 per share
compared to an adjusted net loss of $10.5 or $0.02 per share in Q1
2010.
Consolidated cash and cash equivalents were $371.8 million as at March
31, 2011 compared to $324.4 million at December 31, 2010. Working
capital was $225.2 million at March 31, 2011.
The following table provides a summary of key financial results:
Q1 2011 Q1 2010
Attributable production (lbs) ((1)) 2,308,200 1,720,200
Attributable sales (lbs)( (1)) 1,681,700 764,400
Average realized sales price ($ per lb)
( (2)) 61 46
Average cash cost of production sold( )
($ per lb)((2)) 14 18
Revenues ($ millions) 101.9 35.5
Earnings from mine operations ($
millions) 51.2 9.7
Net earnings/(loss) ($ millions) 14.0 (1.4)
Net earnings/(loss) per share - basic
and diluted ($ per share) 0.01 (0.00)
Adjusted net earnings/(loss) ($
millions)((2)) 14.7 (10.5)
Adjusted net earnings/(loss) per share
- basic and diluted ($ per share)((2)) 0.02 (0.02)
Notes:
((1)) Attributable production and sales are from assets owned and in
commercial production during the period (For Q1 2011: Akdala,
South Inkai, Karatau, Akbastau and Zarechnoye; for Q1 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
Mar 31, 2011 Mar 31, 2010
$'millions $'millions
Net earnings/(loss) 14.0 (1.4)
Fair value adjustments - (10.4)
Impairment of mineral interest,
plant and equipment and closure
costs - 1.2
Corporate development expenditure 0.7 -
Gain on sale of available for sale
securities - 0.1
Adjusted net earnings/(loss) 14.7 (10.5)
Adjusted net earnings/(loss) per
share - basic ($) 0.02 (0.02)
Adjusted net earnings/(loss) per
share - diluted ($)((1)) 0.02 (0.02)
Weighted average number of shares
(millions) - basic 957.2 587.3
Weighted average number of shares
(millions) - diluted 1,049.7 587.3
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
first quarter 2011 results on Wednesday, May 11, 2010 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
May 11, 2011 by dialing toll free 1-800-642-1687 or 1-416-849-0833 for
local calls or calls from outside Canada and the United States. The
pass code for the replay is 61777179. 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.
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Chris Sattler
Chief Executive Officer
Tel: 1 647 788 8500
Anton Jivov
Manager, Corporate Development and Investor Relations
Tel: 1 647 788 8461