TORONTO, March 27, 2013 /CNW/ - Uranium One Inc. ("Uranium One") today
reported record revenue of $562.9 million for 2012 at an average total
cash cost per pound sold of $16 based on sales of 11.7 million pounds
at an average realized sales price of $48 per pound. Attributable
production for 2012 was 12.2 million pounds.
2012 Highlights
Operational
-
Total attributable production during 2012 was a record 12.2 million
pounds, 15% higher than total attributable production of
10.7 million pounds during 2011.
-
The average total cash cost per pound sold was $16 per pound during 2012
compared to $14 per pound during 2011.
Financial
-
Attributable sales volumes for 2012 increased by 18% to a record 11.7
million pounds, compared to 9.9 million pounds sold during 2011.
-
Revenue was a record $562.9 million in 2012, compared to $530.4 million
in 2011. The average realized sales price during 2012 was $48 per pound
compared to $54 per pound in 2011. The average spot price in 2012 was
$49 per pound.
-
Earnings from mine operations were $224.8 million during 2012, compared
to earnings from mine operations of $262.6 million in 2011.
-
The net loss for 2012 was $96.7 million or $0.10 per share, compared to
net earnings of $88.4 million or $0.09 per share for 2011.
-
The adjusted net earnings for 2012 were $68.2 million or $0.07 per
share, compared to adjusted net earnings of $113.7 million or $0.12 per
share for 2011.
-
The carrying value of the equity investment in Mantra was written down
by $102.3 million in Q4 2012, due to delays in the expected initial
production, (mainly from permitting delays), increased capital
expenditure experienced in the industry, and lower uranium prices.
-
In Q3 2012, the carrying value of the Zarechnoye Mine was written down
by $79.1 million, net of deferred taxes of $14.9 million, due to the
decrease in uranium prices and a decrease in the South Zarechnoye
resource base.
Corporate
-
The United Arab Emirates announced the award of $3 billion worth of fuel
supply contracts to six global suppliers, including Uranium One. This
long term contract will meet a portion of the uranium requirements of
the Barakah Nuclear Power Station scheduled to start up by 2017.
-
The Corporation also concluded its first Chinese contract during 2012,
which calls for the supply of uranium to China Guangdong Nuclear Power
Corporation in 2012 and 2013.
-
On October 15, 2012, the Tanzanian Ministry of the Environment issued an
environmental impact assessment certificate to Mantra Tanzania in
respect of the Mkuju River Project. Issuance of the certificate
completes Mantra's application for a Special Mining License for the
Project and represents a significant permitting milestone.
-
In January 2013, the Corporation entered into an agreement with ARMZ
under which the Corporation would be taken private for cash
consideration of CDN$2.86 per share. The transaction provides total
consideration to minority shareholders of approximately CDN$1.3 billion
and implies an equity value for Uranium One of approximately CDN$2.8
billion. The transaction was approved by shareholders on March 7, 2013
and is expected to close in Q2 2013 after receipt of all required
regulatory approvals.
-
On March 25, 2013, the Corporation arranged a three year, $1.45 billion
revolving unsecured credit facility with ARMZ; drawings under the
facility bear interest at the rate of 3.3%. On March 26, 2013, the Corporation drew down the facility as it evaluates
initiatives to expand its business.
Outlook
-
Total attributable production for 2013 and 2014 is estimated 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 $107 million for wellfield development and $66 million for
plant and equipment, totalling $173 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 $8 million.
2012 Operations and Projects
During 2012, Uranium One achieved attributable production of 12.2
million pounds, an increase of 15% over attributable production of 10.7
million pounds in 2011.
Operational results for Uranium One's assets during 2012 were:
Asset
|
2012 Attributable Production (lbs U3O8)
|
2012 Total Cash Costs (per lb sold U3O8)
|
Akdala
|
1,992,600
|
$13
|
South Inkai
|
3,403,200
|
$18
|
Karatau
|
2,775,500
|
$11
|
Akbastau
|
1,563,200
|
$11
|
Zarechnoye
|
1,216,200
|
$24
|
Kharasan(1) |
454,100
|
$27
|
Willow Creek(2) |
620,900
|
$45
|
Honeymoon(3) |
220,800
|
N/A
|
Total
|
12,246,500
|
$16
|
(1)
|
Production before and after the completion of commissioning during
2012 was 697,600 pounds (269 tonnes of U) and 816,000 pounds
(314 tonnes of U) respectively, of which 454,100 pounds
(174 tonnes U) was attributable to the corporation.
|
(2)
|
Production before and after the completion of commissioning during
2012 was 140,300 pounds (54 tonnes U) and 480,600 pounds
(185 tonnes U), respectively, for a total of 620,900 pounds
(239 tonnes U) for the year.
|
(3)
|
Production in commissioning from Honeymoon was 340,200 pounds
(131 tonnes U) during 2012, of which 220,800 pounds (85 tonnes U)
was attributable to the Corporation.
|
2012 Financial Review
Revenue was a record $562.9 million in 2012, compared to $530.4 million
in 2011. The average realized sales price during 2012 was $48 per pound
compared to $54 per pound in 2011. The average spot price in 2012 was
$49 per pound.
Operating expenses per pound sold were $16 for 2012 compared to $14 in
2011.
Earnings from mine operations were $224.8 million during 2012, compared
to earnings from mine operations of $262.6 million in 2011.
Attributable inventory as at December 31, 2012 was 3.7 million pounds,
which includes work in progress as well as finished product. Finished
product at conversion facilities awaiting pre-scheduled deliveries into
sales contracts was 0.9 million pounds at December 31, 2012.
The net loss for 2012 was $96.7 million or $0.10 per share, compared to
net earnings of $88.4 million or $0.09 per share for 2011.
The adjusted net earnings for 2012 were $68.2 million or $0.07 per
share, compared to adjusted net earnings of $113.7 million or $0.12 per
share for 2011.
Consolidated cash and cash equivalents were $454.8 million as at
December 31, 2012 compared to $619.0 million at December 31, 2011.
Working capital was $656.1 million at December 31, 2012.
The following table provides a summary of key financial results:
|
|
|
|
|
FINANCIAL
|
Q4 2012
|
Q4 2011
|
FY 2012
|
FY 2011
|
Attributable production (lbs) (1) |
3,223,500
|
3,156,200
|
11,676,100
|
10,057,200
|
Attributable sales (lbs) (1) |
5,136,000
|
3,161,200
|
11,694,800
|
9,881,400
|
|
|
|
|
|
Average realized sales price ($ per lb) (2) |
44
|
50
|
48
|
54
|
Average total cash cost per pound sold ($ per lb)(2) |
17
|
15
|
16
|
14
|
Revenues ($'millions)
|
227.6
|
157.9
|
562.9
|
530.4
|
Earnings from mine operations ($'millions)
|
76.6
|
76.0
|
224.8
|
262.6
|
Net (loss) / earnings ($'millions)
|
(68.8)
|
(1.1)
|
(96.7)
|
88.4
|
Net (loss) / earnings per share - basic and diluted ($ per share)
|
(0.07)
|
(0.00)
|
(0.10)
|
0.09
|
|
|
|
|
|
Adjusted net earnings ($'millions)(2) |
34.9
|
21.4
|
68.2
|
113.7
|
Adjusted net earnings per share - basic ($ per share)(2) |
0.04
|
0.02
|
0.07
|
0.12
|
(1)
|
Attributable production and sales are from assets owned and in
commercial production during the period. Willow Creek and Kharasan reached commercial production levels effective
from May 1, 2012 and July 1, 2012, respectively and sales and production results for these
mines are included in the operating
results for the periods after these dates.
|
(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.
|
The following table provides a reconciliation of adjusted net earnings /
(loss) to the consolidated financial statements:
|
|
|
|
|
|
(US DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
|
|
3 MONTHS ENDED
|
YEAR ENDED
|
DEC 31, 2012 $'MILLIONS
|
DEC 31,2011 $'MILLIONS
|
DEC 31, 2012 $'MILLIONS
|
DEC 31, 2011 $'MILLIONS
|
Net (loss) / earnings
|
|
(68.8)
|
(1.1)
|
(96.7)
|
88.4
|
Fair value adjustments
|
|
(0.3)
|
3.9
|
-
|
2.6
|
Impairment charges (net of deferred taxes of $14.9 million)
|
|
102.3
|
-
|
181.4
|
-
|
Gain on business combination
|
|
-
|
-
|
(17.2)
|
-
|
Care and maintenance costs
|
|
0.3
|
0.3
|
1.5
|
1.2
|
Corporate development expenditure
|
|
0.1
|
0.2
|
2.7
|
1.2
|
Restructuring costs
|
|
0.7
|
1.4
|
2.2
|
3.6
|
Ruble bond hedge accounting adjustments
|
|
0.6
|
-
|
4.7
|
-
|
Non-recurring income tax adjustment
|
|
-
|
16.7
|
(10.4)
|
16.7
|
Adjusted net earnings
|
|
34.9
|
21.4
|
68.2
|
113.7
|
|
|
|
|
|
|
Adjusted net earnings per share - basic ($) and diluted
|
|
0.04
|
0.02
|
0.07
|
0.12
|
Weighted average number of shares (millions) - basic and diluted
|
|
957.2
|
957.2
|
957.2
|
957.2
|
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 U3O8.
Going Private Transaction
On January 13, 2013, the Corporation entered into a definitive agreement
(the "Arrangement Agreement") with ARMZ under which the Corporation
would be taken private pursuant to a plan of arrangement (the "Plan of
Arrangement"). ARMZ and its affiliates currently own 51.4% of the
Corporation's outstanding common shares ("Common Shares").
Under the Plan of Arrangement, ARMZ will acquire all of the Common
Shares that ARMZ and its affiliates do not already own for cash
consideration of CDN$2.86 per share. The transaction provides total
consideration to minority shareholders of approximately CDN$1.3 billion
and implies an equity value for Uranium One of approximately CDN$2.8
billion.
The implementation of the Plan of Arrangement was approved by the
Corporation's shareholders and option holders at a special meeting held
on March 7, 2013. In accordance with an interim order of the Ontario
Superior Court of Justice dated February 6, 2013, the transaction was
subject to the affirmative vote of two-thirds of the Corporation's
shareholders and option holders, as well as a majority of the minority
shareholders. At the meeting, approximately 95.7% of the votes cast by
the holders of the Common Shares, and 95.7% of the votes cast by the
holders of the Common Shares and options voting together as one class,
were voted in favour of the Plan of Arrangement. In addition,
approximately 86% of the votes cast by minority shareholders, i.e.
shareholders other than ARMZ, its affiliates and related parties, and
those senior officers of Uranium One who hold options, were voted in
favour of the Plan of Arrangement.
The transaction is subject to applicable regulatory approvals and
certain closing conditions customary in transactions of this nature,
the details of which are outlined in the Corporation's management
information circular for the special meeting dated February 8, 2013.
The Corporation has obtained US, Russian, Australian and South African
regulatory approvals and continues to diligently pursue all required
remaining approvals. The transaction is expected to close in the second
quarter of 2013.
Within 30 days of completion of the transaction, the Corporation will
make an offer to purchase the $259,985,000 aggregate principal amount
of 7.5% (re-set to 5%) convertible unsecured subordinated debentures
due March 13, 2015 in accordance with the terms of the trust indenture
governing the debentures.
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, Australia and Tanzania.
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 quantity 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 "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,
2011, 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.
SOURCE: Uranium One Inc.
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