Uranium One Announces Results for 2008
Vancouver, British Columbia – Uranium One Inc. (“Uranium One”) today reported operational
and financial results for the year ending December 31, 2008.
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 US dollars unless otherwise indicated.
Highlights:
• Attributable production during 2008 of 2,864,700 pounds of U3O8, an increase of 41%
from 2,038,700 pounds of U3O8 in 2007
• Attributable sales volumes of 2,210,900 pounds of U3O8 during 2008, a 37% increase
compared to sales of 1,608,700 pounds of U3O8 in 2007
• Average realized sales price during 2008 of $68 per pound of U3O8, generating revenue
of $149.8 million, compared to an average realized price of $83 per pound, generating
revenue of $134.0 million in 2007
• Earnings from mine operations were $96.7 million during 2008, a 5% decrease over
earnings from mine operations of $101.8 million during 2007, primarily due to a lower
realized U3O8 sales price
• Concluded a $100 million senior secured revolving credit facility with Bank of Montreal
and The Bank of Nova Scotia
• Received an inaugural dividend of $40 million from the Betpak Dala joint venture
• Completed joint venture transactions with Mitsui & Co., Ltd., whereby Mitsui has
acquired a 49% stake in the Australian assets of Uranium One for a minimum cash
commitment of A$104 million
• South Inkai Mine received industrial production approvals, allowing commercial
production to commence on January 1, 2009
• Wrote down mineral interests, plant and equipment by $2.4 billion (net of future income
tax recoveries): $1.3 billion on Dominion; $1.0 billion on properties in the United States;
and $0.1 billion on Honeymoon and Australian exploration
• Subsequent to year end, announced a C$270 million private placement and formation of a
strategic relationship with a Japanese consortium
Jean Nortier, President and CEO of Uranium One commented: 2
“Following on from strong production results and sales volumes in 2008, Uranium One is well
positioned to continue to execute on our growth plans during 2009. Akdala continues to perform
in line with expectations and the ramp-up at South Inkai remains on target. Uranium One’s
balance sheet is one of the strongest in the uranium industry and we expect that we will be able to
take advantage of opportunities today that will enhance our position in what we continue to
believe will be a bright future for the nuclear industry tomorrow.”
Outlook
Uranium One’s attributable production estimate for 2009 is estimated at 3.5 million pounds,
comprising 1.8 million pounds from Akdala, 1.5 million pounds from South Inkai and 0.2 million
pounds from Kharasan. Total attributable production for 2010 is estimated at 5.6 million pounds.
Uranium One expects the average cash cost per pound of U3O8 sold(1)
at Akdala during 2009 to be
approximately $15 per pound. The average cash cost per pound of U3O8 sold at South Inkai
during 2009 is expected to be $28 per pound, with a cost per pound sold of approximately $20 by
the end of the year.
Uranium One’s total contracts for sales of U3O8 amount to 26 million attributable pounds, of
which 16 million pounds have weighted average floor prices of approximately $47 per pound.
For 2009, Uranium One expects to sell an aggregate of 2.8 million attributable pounds of U3O8.
The Corporation has already contracted for the sale of 2.2 million attributable pounds of U3O8 in
2009, of which 700,000 pounds have weighted average floor prices of $43 per pound.
In line with increasing levels of production from Betpak Dala’s operations, attributable inventory
levels are expected to increase from approximately 1.2 million pounds of U3O8 at December 31,
2008 to approximately 1.8 million pounds of U3O8 by the end of 2009.
During 2009, Uranium One expects to incur capital expenditures of $21 million for the
development of assets in Wyoming and $6 million toward the costs of constructing a sulphuric
acid plant in Kazakhstan.
General and administrative costs, excluding non-cash items, are expected to be approximately
$28 million for 2009. Exploration expenditure for 2009 is expected to be $12 million. Care and
maintenance costs at Dominion are expected to be $12 million for 2009.
In 2009 to the end of February, Betpak Dala has received more than its expected allocation of
sulphuric acid. Both the Betpak Dala and Kyzylkum joint ventures are expected to have
sufficient sulphuric acid supplies to meet 2009 production targets at Akdala, South Inkai and
Kharasan.
2008 Financial Review
The average cash cost per pound of U3O8 sold in 2008 was inline with expectations at $14 per
pound, $3 per pound higher than the $11 average cash cost per pound sold recorded in 2007.
The net loss from continuing operations in 2008 was $2.3 billion, or $4.98 per basic and diluted
share, compared to a net loss from continuing operations in 2007 of $16.2 million, or $0.05 per
basic and diluted share.
3
Adjusted net earnings
(1)
for 2008 were $22.3 million, or $0.05 per basic and diluted share
compared to adjusted net earnings during 2007 of $3.4 million, or $0.01 per basic and diluted
share.
The Company wrote down mineral interests, plant and equipment by $3.3 billion in 2008,
consisting of $1.8 billion on Dominion, $0.9 billion on United States exploration properties, $0.2
billion on United States development projects, $0.2 billion on Honeymoon and Australian
exploration, $0.1 billion on United States conventional mining properties and $0.1 billion on
Hobson and La Palangana. The future income tax recovery on the write down was $1.0 billion,
resulting in a net total impairment of $2.4 billion.
Consolidated cash and cash equivalents were $176.2 million as at December 31, 2008 compared
to $159.6 million at December 31, 2007. Working capital was $204.7 million as at December 31,
2008.
Conference Call Details
Uranium One will be hosting a conference call and webcast to discuss the 2008 results on March
16, 2009 starting at 10:00 a.m. (Eastern Time). Participants may join the call by dialling toll free
1-800-594-3790 or 1-416-915-5761 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/webcast
A recording of the conference call will be available for replay for a two week period beginning at
approximately 12:00 p.m. (Eastern Time) on March 16, 2009 by dialling toll free 1-877-289-8525
or 1-416-640-1917 for local calls or calls from outside Canada and the United States. The pass
code for the replay is 21300364. 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, South Africa and
Australia.
(1) The Corporation has included non-GAAP performance measures: sales price per pound of U3O8, cost per pound
of U3O8 sold, adjusted net earnings / loss and adjusted net earnings / loss per share. The Corporation reports
total cash costs on a sales basis. 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. |
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