VANCOUVER, Nov. 15 /CNW/ -- VANCOUVER, Nov. 15 /CNW/ - Uranium One
Inc. ("Uranium One") today reported record quarterly sales of 1.7
million pounds, production of 1.7 million pounds and a decrease in
total cash costs at its operations to $12 per pound sold during the
third quarter of 2010. Uranium One's 2010 production guidance
remains 7.0 million pounds. The Company's production guidance
for 2011 is 10.5 million pounds and 12.5 million pounds for 2012.
Q3 2010 Highlights Operational Results -- Attributable production
during Q3 2010 of 1.75 million pounds was 109% higher than total
attributable production of 834,800 pounds during Q3 2009. -- The
average total cash cost decreased by 20% to $12 per pound sold
during Q3 2010, compared to the average total cash cost of $15 per
pound sold during Q3 2009. -- An operating license was issued by
the NRC for the Moore Ranch in-situ uranium project in September
2010; this is the first new license granted by the NRC for the
development of a new ISR operation since 1998. Financial Results --
Record attributable sales volumes of 1.7 million pounds for Q3
2010, an increase of 302% compared to 423,100 pounds sold during Q3
2009 and an increase of 12% compared to 1.5 million pounds sold
during Q2 2010. Attributable sales volumes during October were
740,700 pounds. -- Revenue increased by 243% to $73.1 million in Q3
2010, compared to $21.3 million in Q3 2009. The average realized
sales price was $43 per pound during Q3 2010. -- Earnings from mine
operations increased by 197% to $27.9 million during Q3 2010
compared to earnings from mine operations of $9.4 million in Q3
2009. The increase was primarily due to an increase in the pounds
sold, partially offset by a decrease in the average realized sales
price per pound. Corporate -- The ARMZ transaction is anticipated
to be completed before the end of 2010, subject to receipt of one
remaining regulatory approval (from the US Nuclear Regulatory
Commission, which is expected to be received by the end of November
2010). -- On the initial closing of this transaction, Uranium One
will issue 178 million new common shares to ARMZ for US$610 million
in cash, after which a special dividend of US$1.06 per share will
be declared and paid to all shareholders other than ARMZ; on the
final closing, Uranium One will issue a further 178 million common
shares to ARMZ in exchange for its joint venture interests in
Akbastau and Zarechnoye. Jean Nortier, President and CEO of Uranium
One commented: "Uranium One continues to deliver strong operational
results from our assets in Kazakhstan. At a time when there
is renewed interest in the uranium space, our shareholders are set
to benefit from the Company's unhedged sales contract portfolio,
excellent production growth profile, industry-leading low cash
costs and strong partnerships in the nuclear industry. Our
transaction with ARMZ remains on track for completion by the end of
2010 and we look forward to capitalizing on the new opportunities
that this transaction will bring to Uranium One." Guidance Update
Production During the remainder of 2010 and in 2011, Uranium One is
focused on maintaining production( )from Akdala at current levels,
ramping up production at Karatau and South Inkai towards a level of
5.2 million pounds (2,000 tonnes U) in 2011, successfully
commissioning its development projects, controlling costs at its
operations and remaining a reliable supplier of U(3)O(8) to the
nuclear fuel industry. The Corporation's total attributable
production guidance for 2010 remains unchanged at 7.0 million
pounds. Assuming the completion of the acquisition of the joint
venture interests in the Akbastau and Zarechnoye uranium mines by
the end of 2010, Uranium One's attributable production estimate for
2011 is 10.5 million pounds and is broken down as follows: Total
Ownership % Estimated estimated attributable 2011 2011 production
production (millions of (millions of Operation Status lbs) lbs)
Akdala Producing 2.6 70% 1.8 South Inkai Producing 5.0 70% 3.4
Karatau Producing 4.6 50% 2.4 Akbastau Producing 2.4 50% 1.2
Zarechnoye Producing 2.0 49.67% 1.0 Powder River Commissioning 0.3
100% 0.3 Basin / Producing Honeymoon Commissioning 0.4 51% 0.2 /
Producing Kharasan Commissioning 0.7 30% 0.2 Totals: 18.0 10.5
Uranium One's attributable production estimate for 2012 is 12.5
million pounds on a consolidated basis. Total Cash Costs During
2011,( )the average cash cost per pound sold, including Kazakh
mineral extraction tax, is estimated to be as follows: 2011 -
Estimated average cash cost Mine ($/lb) Akdala 14 South Inkai 19
Karatau 12 Akbastau 18 Zarechnoye 21 Powder River Basin 25
Honeymoon 35 Sales and Sales Contracts Excluding sales under
offtake agreements negotiated with ARMZ and the Japanese
Consortium, Uranium One currently has contracts for the sale of an
aggregate of 24 million attributable pounds, including 5 million
pounds which will be sold at an average fixed price of $66 per
pound (subject to escalation) and 12 million pounds which has been
contracted with weighted average floor prices of approximately $48
per pound. The remainder of contracted attributable sales are not
subject to floors and such sales are related to the market price of
U(3)O(8 )at the time of delivery. For 2011, Uranium One expects to
sell approximately 9.5 million attributable pounds, excluding sales
during commissioning. Excluding sales under the offtake agreement
negotiated with ARMZ, Uranium One has already contracted for the
sale of 3.9 million attributable pounds in 2011, of which 3.6
million pounds have weighted average floor prices of approximately
$48 per pound. For 2012, Uranium One expects to sell approximately
12.0 million attributable pounds, excluding sales during
commissioning. Excluding sales under the offtake agreement
negotiated with ARMZ, the Corporation has already contracted for
the sale of 3.7 million attributable pounds in 2012, of which 3.2
million pounds have weighted average floor prices of approximately
$48 per pound. Capital Expenditures Uranium One's estimated capital
expenditures and funding per project for 2011 are expected to be as
follows: 2011 - Estimated capital expenditure in $millions
Wellfield Resource Plant and Total Ownership Total development
definition equipment % drilling and other Mine / project 100%
Attributable Kazakhstan Akdala 5 2 28 35 70% 25 South 17 2 30 49
70% 34 Inkai Karatau 15 9 21 45 50% 23 Akbastau 29 15 72 116 50% 58
Zarechnoye 11 7 12 30 49.67% 15 Kharasan ( 21 9 - 30 30% 9 (1))
SKZ-U - - 111 111 19% 21 Subtotal - 98 44 274 416 185 Kazakhstan
Australia and United States Honeymoon 3 - 5 8 51% 4 Powder 24 - 22
46 100% 46 River Basin Great - - 1 1 100% 1 Divide Basin Other - -
2 2 2 Subtotal - 27 - 30 57 53 Australia and United States Totals:
125 44 304 473 238 ((1)) - Proceeds from sales during commissioning
are offset against the estimated capital expenditure Other
estimated expenditures by Uranium One in 2011 are expected to be as
follows: 2011 - Estimated Item in $millions General and
administrative (excluding stock based 37 compensation)
Restructuring and other non-recurring costs 11 Exploration 7 Q3
2010 Operations and Projects During Q3 2010 attributable production
was 1,746,700 pounds, 109% higher than the 834,800 pounds produced
during Q3 2009. The increase is primarily due to the inclusion of
production from Uranium One's 50% interest in the Karatau uranium
mine, which was acquired in December 2009 and from the continued
ramp up of South Inkai. Kazakhstan -- Akdala achieved attributable
production during Q3 2010 of 448,000 pounds; total cash costs for
Q3 2010 were $12 per pound sold. -- South Inkai achieved
attributable production during Q3 2010 of 770,300 pounds; total
cash costs for Q3 2010 were $19 per pound sold. -- Karatau achieved
attributable production during Q3 2010 of 473,300 pounds; total
cash costs for Q3 2010 were $9 per pound sold, which was lower than
expected due to deferred operational expenditure. -- At Kharasan,
initial results from the test blocks in new geological horizons are
positive and productive solutions are being sent to the plant.
Production during the commissioning process was 55,100 pounds
attributable to the Corporation during Q3 2010. United States On
September 30, 2010 the NRC issued the operating license for the
Moore Ranch in-situ uranium project. This is the first new license
granted by the NRC for a U.S. ISR operation in almost 13 years for
the development of a new U.S uranium production facility. Q3
2010 Financial Review Revenue of $73.1 million was recorded in Q3
2010, 243% higher compared to $21.3 million in Q3 2009, primarily
due to volume sold increasing by 1,278,200 pounds (302% higher than
in Q3 2009) partially offset by a 14% decrease in the average
realized uranium price compared to Q3 2009. Operating expenses per
pound sold decreased by 20% to $12 per pound in Q3 2010 from $15
per pound in Q3 2009 primarily due to the inclusion of Karatau
which currently has lower cash costs than the Corporation's other
operations in Kazakhstan. The adjusted net loss for Q3 2010 was
$2.4 million, or nil per basic share compared to an adjusted net
loss for Q3 2009 of $7.8 million, or $0.02 per basic share.
Consolidated cash and cash equivalents were $422.0 million as at
September 30, 2010 compared to $394.3 million at June 30,
2010. Working capital was $493.2 million at September 30,
2010. FINANCIAL SUMMARY Q3 2010 Q3 2009 YTD 2010 YTD 2009
Attributable production (lbs) ((1)) 1,690,700 807,200 5,190,900
2,323,600 Attributable sales (lbs)( (1)) 1,701,300 423,100
3,983,200 1,688,800 Average realized sales price ($ per lb)( (2))
43 50 44 49 Average cash cost of production sold( )($ per lb)( 12
15 14 17 (2)) Revenues ($ millions) 73.1 21.3 174.6 82.9 Earnings
from mine operations 27.9 9.4 61.1 31.9 ($ millions) Net loss from
continuing (10.2) (15.3) (41.5) (217.7) operations ($ millions)
Loss per share from continuing (0.02) (0.03) (0.07) (0.46)
operations - basic and diluted ($ per share) Earnings from
discontinued - 3.4 - 2.0 operations ($ millions) Earnings per share
from - 0.01 - 0.00 discontinued operations - basic and diluted ($
per share) Net loss ($ millions) (10.2) (11.9) (41.5) (215.7) Net
loss per share - basic and (0.02) (0.03) (0.07) (0.46) diluted ($
per share) Adjusted net (loss) / earnings ($ millions)((2)) (2.4)
(7.8) (19.9) (26.2) Adjusted net (loss) / earnings (0.00) (0.02)
(0.03) (0.06) per share - basic ($ per share)((2)) Notes: ((1))
Attributable production and sales are from assets owned and in
commercial production during the period (For 2010: Akdala, South
Inkai and Karatau; For 2009: Akdala and South Inkai, with Karatau
from date of acquisition). ((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 9 months ended Sep 30, 2010 Sep 30, 2009 Sep 30, 2010
Sep 30, 2009 $(000's) $(000's) $(000's) $(000's) Net loss (10,223)
(15,309) (41,470) (217,679) from continuing operations Unrealized
111 (1,326) 752 (68,449) foreign exchange (gain) / loss on future
income tax liabilities Impairment - 8,969 1,886 260,033 of mineral
interests, plant and equipment and closure costs Corporate 5,451 -
8,484 - development expenditure Loss / 2,231 (134) 10,449 (126)
(gain) on sale of available for sale securities Adjusted net
(2,430) (7,800) (19,899) (26,221) (loss) / earnings Adjusted net
(0.00) (0.02) (0.03) (0.06) (loss) / earnings per share - basic ($)
Weighted 588,015 469,799 587,651 469,702 average number of shares
(thousands) - basic 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 2010 results on Monday, November 15, 2010
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 15, 2010 by dialling 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
21413493. 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, 2009 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. %SEDAR: 00005203E pJean
Nortierbr/ Chief Executive Officerbr/ Tel: +1 604 601
5642 /p pChris Sattlerbr/ Executive Vice President,
Corporate Development and Investor Relations br/ Tel: + 1 416
350 3657 /p
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