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Uranium One Announces 18% Increase in Q2 2013 Production to 3.6 Million Pounds
Uranium One Inc
(Incorporated in Canada)
(Registration number: 15096422420)
Share code on the JSE: UUU & ISIN: CA91701P1053
Share code on the TSX: UUU & ISIN: CA91701P1053
News Release
August 6, 2013
Uranium One Announces 18% Increase in Q2 2013 Production to 3.6 Million
Pounds; Average Total Cash Cost of $19 per Pound
Toronto, Ontario – Uranium One Inc. (“Uranium One”) today reported quarterly revenue
of $123.0 million for Q2 2013, including joint venture revenue, based on sales of 2.9
million pounds at an average realized sales price of $43 per pound at an average total
cash cost per pound sold of $19.
Q2 2013 Highlights
Operational
- Total attributable production during Q2 2013 was 3.6 million pounds, 18% higher
than total attributable production of 3.0 million pounds during Q2 2012.
- The average total cash cost per pound sold was $19 per pound for Q2 2013,
compared to $16 per pound for Q2 2012.
Financial
- Attributable sales volumes for Q2 2013 were 2.9 million pounds sold from the
Corporation’s operations and joint ventures compared to 1.9 million pounds sold
during Q2 2012.
- Revenue was $11.9 million in Q2 2013, compared to $13.0 million in Q2 2012.
- Joint venture revenue in Q2 2013 was $111.1 million, compared to $83.8 million
in Q2 2012.
- The average realized sales price during Q2 2013 was $43 per pound, compared to
$51 per pound in Q2 2012. The average spot price in Q2 2013 was $40 per pound
compared to $51 per pound in Q2 2012.
- Earnings from mine operations were $5.1 million in Q2 2013, compared to
$3.1 million in Q2 2012.
- Earnings from mine operations, including earnings from joint ventures, were
$31.1 million in Q2 2013, a 22% decrease compared to earnings from mine
operations, including joint ventures, of $40.1 million in Q2 2012.
- The net earnings for Q2 2013 were $10.6 million or $0.01 per share, compared to
net earnings of $29.2 million or $0.03 per share for Q2 2012.
- The adjusted net earnings for Q2 2013 were $7.0 million or $0.01 per share,
compared to adjusted net earnings of $8.4 million or $0.01 per share for Q2 2012.
Corporate
- On January 13, 2013, the Corporation entered into a definitive agreement with
ARMZ under which the Corporation would be taken private pursuant to a Plan of
Arrangement. ARMZ and its affiliates currently own 51.4% of the Corporation’s
outstanding common shares. Under the agreement, ARMZ will acquire all of the
remaining publicly held Common Shares for a cash consideration of CDN$2.86
per share. On March 7, 2013, the Corporation received securityholder approval
for the proposed Plan of Arrangement. Closing is expected to take place by the
end of Q3 2013 following receipt of all required regulatory approvals.
- On March 25, 2013, the Corporation arranged a three year, $1.45 billion
unsecured revolving credit facility with an ARMZ affiliate. The drawings under
the facility bear interest at the rate of 3.3% per annum. On March 26, 2013, the
Corporation drew down the facility as it evaluates initiatives to expand its
business.
- On April 5 2013, the Tanzanian Government issued a Special Mining License for
the Company’s Mkuju River Project. Negotiations with the Tanzanian
Government on the terms of a mine development agreement and other required
Tanzanian approvals are continuing.
Outlook
- Total attributable production for 2013 and 2014 is expected to be 12.5 million and
13.0 million pounds, respectively.
- During 2013, the average cash cost per pound sold is expected to be
approximately $19 per pound.
- 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 $92
million for wellfield development and $62 million for plant and equipment,
totalling $154 million for its assets in Kazakhstan, the United States and
Australia.
- In 2013, general and administrative expenses, excluding non-cash items, are
expected to be approximately $40 million and exploration expenses are expected
to be $5 million.
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Q2 2013 Operations and Projects
During Q2 2013, Uranium One achieved attributable production of 3.6 million pounds,
an increase of 18% over attributable production of 3.0 million pounds for the comparable
period in 2012.
Operational results for Uranium One’s assets during Q2 2013 were:
Asset Q2 Attributable Production Q2 Total Cash Costs
(lbs U3O8) (per lb sold U3O8)
Akdala 508,600 $14
South Inkai 1,051,500 $19
Karatau 664,100 $11
Akbastau 514,100 $13
Zarechnoye 311,500 $25
Kharasan (1) 135,400 $30
Willow Creek (1) 283,400 -
Honeymoon (2) 84,700 -
Total 3,553,300 $19
Q2 2013 Financial Review
Revenue was $11.9 million in Q2 2013, compared to $13.0 million in Q2 2012.
Joint venture revenue in Q2 2013 was $111.1 million, compared to $83.8 million in Q2
2012.
The average realized sales price during Q2 2013 was $43 per pound, compared to $51 per
pound in Q2 2012. The average spot price in Q2 2013 was $40 per pound compared to
$51 per pound in Q2 2012.
Earnings from mine operations were $5.1 million in Q2 2013, compared to $3.1 million
in Q2 2012.
Earnings from mine operations, including earnings from joint ventures, were $31.1
million in Q2 2013, a 22% decrease compared to earnings from mine operations,
including joint ventures, of $40.1 million in Q2 2012.
Inventory as at June 30, 2013 was 1.0 million pounds for the Corporation and its
subsidiaries, which includes work in progress as well as finished product ready to be
shipped or in transit. Inventory held by the joint ventures was 4.9 million pounds as at
June 30, 2013.
The net earnings for Q2 2013 were $10.6 million or $0.01 per share, compared to net
earnings of $29.2 million or $0.03 per share for Q2 2012.
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The adjusted net earnings for Q2 2013 were $7.0 million or $0.01 per share, compared to
adjusted net earnings of $8.4 million or $0.01 per share for Q2 2012.
Consolidated cash and cash equivalents including restricted cash were $1,824.0 million
as at June 30, 2013 compared to $442.0 million at December 31, 2012. Working capital
was $550.4 million at June 30, 2013.
The following table provides a summary of key financial results:
YTD YTD
FINANCIAL Q2 2013 Q2 2012
Q2 2013 Q2 2012
Attributable production (lbs)(1) 3,468,600 2,798,800 6,486,600 5,371,300
Attributable sales (lbs)(1) 2,865,100 1,883,600 4,246,400 3,693,000
Average realized sales price ($ per lb)(3) 43 51 44 52
(3)
Average total cash cost per pound sold ($ per lb) 19 16 18 15
Revenues ($millions)(4)(6) 11.9 13.0 17.1 18.3
Revenues from joint ventures ($millions) 111.1 83.8 168.5 174.4
(4)(5)
Earnings from mine operations ($millions) 5.1 3.1 7.0 8.4
Earnings from mine operations, including earnings from joint ventures
31.1 40.1 50.7 89.4
($millions)
Net earnings ($millions) 10.6 29.2 1.1 33.7
Net earnings per share – basic and diluted ($ per share) 0.01 0.03 0.00 0.04
(3)
Adjusted net earnings ($millions) 7.0 8.4 2.2 23.0
Adjusted net earnings per share – basic ($ per share) (3)
0.01 0.01 0.00 0.02
The following table provides a reconciliation of adjusted net earnings to the consolidated
financial statements:
3 MONTHS ENDED 6 MONTHS ENDED
US DOLLARS IN MILLIONS EXCEPT PER SHARE
AMOUNTS JUN 30, 2013 JUN 30, 2012 JUN 30, 2013 JUN 30, 2012
$’MILLIONS $’MILLIONS $’MILLIONS $’MILLIONS
Net earnings 10.6 29.2 1.1 33.7
Fair value adjustments (0.7) 0.3 (0.9) 0.3
Corporate development expenditure 0.9 0.5 6.0 2.4
Restructuring costs - - 2.1 -
Ruble bond hedge accounting adjustments (3.8) (11.2) (6.1) (3.0)
Non-recurring income tax adjustment - (10.4) - (10.4)
Adjusted net earnings 7.0 8.4 2.2 23.0
Adjusted net earnings per share – basic and diluted ($) 0.01 0.01 0.00 0.02
Weighted average number of shares (millions) – basic and
957.2 957.2 957.2 957.2
diluted
The financial statements, as well as the accompanying management’s discussion and
analysis were prepared in accordance with International Financial Reporting (IFRS) and
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are available for review at www.uranium1.com and should be read in conjunction with
this news release. Any reference to information including joint venture balances should
be read as a non-IFRS measure used to compare our financial performance to prior
periods. All figures are in U.S. dollars unless otherwise indicated. All references to
pounds sold or pounds produced are to pounds of U3O8.
About Uranium One
Uranium One is one of the world’s largest uranium producers with a globally diversified portfolio
of assets located in Kazakhstan, the United States, Australia and Tanzania.
For further information, please contact:
Chris Sattler
Chief Executive Officer
Tel: +1 647 788 8500
Anton Jivov
Vice President
Corporate Affairs
Tel: +1 647 788 8461
Notes to the financial results:
(1) Attributable production and sales are from assets owned and joint ventures in commercial production during the period.
(2) Honeymoon production represents concentrates in process that require further processing in order to become uranium concentrates that can be
converted into a saleable product.
(3) The Corporation has included the following non-IFRS 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-IFRS measures. The Corporation believes that, in addition to conventional measures prepared in
accordance with IFRS, 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 IFRS. See “Non-IFRS Measures”.
(4) Comparative information has been restated with the adoption of IFRS 11 – Joint arrangements on January 1, 2013.
(5) Includes profits / losses for joint venture production delivered into contracts held by the Corporation, and excludes revenues from joint ventures.
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 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 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, 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
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"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, 2012, 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.
Sponsor
Nedbank Capital
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