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Uranium One to acquire Wyoming assets for US$35 million, quarterly losses deepen

Published: 14:27 10 Aug 2009 EDT

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Toronto-based miner Uranium One (TSX: UUU) said revenue for Q2 2009 was down to US$18.6 million from US$49.4 million a year ago and earnings from mine operations slipped 80% to US$6.6 million.

The company has also announced the acquisition of the Irigaray plant and Christensen Ranch facility for US$35 million from a JV between Areva SA and EDF to mitigate risks associated with developing its own central production plant.

Quarterly losses hiked to US$264.9 million, or US$0.56 per share, from US$67.9 million, or 0.15 per share a year ago, mostly due to write-offs at its Dominion mine in South Africa, which was suspended last year.

Attributable production for the first half was at 1,516,400, marking a 75% year on year increase, while the 833,800 pounds produced in Q2 set the new production record for the company. Yet the gains were offset by the plummeting prices, as the average realised sales price slipped to US$48 per pound from US$72 per pound a year ago.

The company said the results were in line with the expectations and it expects to hit the previously set attributable production target of 3.5 billion pounds for the full year.

"Uranium One achieved record production during the second quarter, driven by steady performance from Akdala and the ramp-up in production from South Inkai, which continues to meet targets. Our mines are continuing to generate healthy operating margins with total cash costs per pound sold in line with our expectations at $17 per pound during the quarter,” said President and CEO Jean Nortier.

Uranium One also said it will raise the production guidance for 2010 35% to 7.5 million pounds upon the completion of the acquisition of a 50% stake in Karatau Uranium Mine in Kazakhstan, which is now subject to regulatory approvals and is expected to be closed by the end of the year.

Uranium One closed with a 2.8% gain on Friday.

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