Trading Symbol: SXR - Toronto Stock Exchange, Johannesburg Stock Exchange
TORONTO and JOHANNESBURG, South Africa, Aug. 15 /CNW/ - sxr Uranium One
Inc. ("Uranium One") today reported unaudited financial results for the
quarter ended June 30, 2006. All figures are in US dollars unless otherwise
indicated.
Complete details of the June 30, 2006 financial statements and
management's discussion and analysis of the second quarter, along with trends
and factors which are likely to impact the balance of the 2006 financial year,
can be found on Uranium One's website at www.uranium1.com as well as SEDAR at
www.sedar.com.
Highlights during the quarter include:
<<
- Announcement on June 14, 2006 of an updated mineral resources
declaration for the Dominion Project, audited by SRK Consulting.
The revised mineral resource estimate shows a uranium resource of
25,990,000 tonnes at a grade of 0.83 kg/t containing
47,492,000 pounds of U(3)O(8) in the indicated category and an
additional 178,422,000 tonnes at a grade of 0.51 kg/t containing
199,193,598 pounds U(3)O(8) in the inferred category. This represents
a 195% increase in indicated resources and a 36% increase in inferred
resources over the estimates contained in the December 2005
independent technical report on the Dominion property prepared by SRK
Consulting (available on SEDAR). The cut off grades have decreased
significantly as a result of applying a more recent uranium price of
$45.00 per lb U(3)O(8) and inclusion for the first time of gold
by-products in the calculation of the cut off grades allowing for the
extraction of the orebody at lower grades. As a result, the average
mineral resource grades have decreased from 0.99 kg/t to 0.83 kg/t in
the indicated category and from 0.66 kg/t to 0.51 kg/t in the
inferred category. In addition, the revised resource estimate shows a
gold resource at Dominion of 25,990,000 tonnes at a grade of 1.09 g/t
containing 910,000 ounces in the indicated category (a 163% increase
from the 346,000 ounces previously reported) and an additional
178,422,000 tonnes at a grade of 0.63 g/t containing 3,614,000 ounces
in the inferred category (a 63% increase from the 2,213,000 ounces
previously reported).
- Announcement on July 28, 2006 of the results of the Phase I
Feasibility Study on the Dominion Project and of a conceptual study
to extend the project to a 30-year life of mine. The Feasibility
Study demonstrates that Phase I of the project, which covers the
first 11 years of the mine life, is financially viable and robust.
Metal recovery has been optimised at a maximum mining cut of 1.6m
where the channel width is higher, resulting in a probable reserve of
31,327,000 pounds of uranium oxide (U(3)O(8)) contained within
18,454,000 tonnes at an average head grade of 0.77 kg/t. Production
at steady state (2011 to 2014) is expected to average 3.8 million
pounds of U(3)O(8) per annum. The average operating cost for Phase I
is expected to be US$14.50 per pound of U(3)O(8), net of gold by-
product credits. The after tax, all equity IRR for Phase I is 32%,
and project payback from commencement of Phase I construction is
estimated to be 5 years. The project is on schedule for production in
Q1 2007.
- An announcement on July 10, 2006 of an exclusivity agreement with
Rio Tinto Energy America for the acquisition of the Sweetwater
Uranium Mill and the associated Green Mountain uranium properties in
Wyoming and a further announcement on July 11, 2006 of an exclusivity
agreement to acquire the Shootaring Canyon Uranium Mill and
associated uranium properties from U.S. Energy. Together these
acquisitions, if completed, would result in Uranium One owning two of
the four remaining conventional uranium mills in the United States.
These acquisitions would result in Uranium One achieving a key
strategic goal of acquiring the capacity to mine and process uranium
in the United States.
- Announcement by Uranium One's 75%-owned Aflease Gold subsidiary of
its intention to acquire shares in Randgold and Exploration Company
Ltd. The acquisition would give Aflease Gold an equity interest in
Randgold and Exploration of between 10.0% and 17.4%, which would
complement Uranium One's existing 11.6% interest in Randgold and
Exploration. The transaction would enable Uranium One to continue to
play an important role in ensuring that shareholder value in Randgold
and Exploration is preserved.
- Net gold sales from Bonanza South in Q2 2006 were $0.9 million, with
year to date net gold sales of $1.9 million.
- Interest received of $1.5 million for Q2 2006 and year to date
interest received of $2.3 million.
- General and administrative expenditure of $4.5 million for Q2 2006
and year to date of $6.1 million was incurred. General and
administrative expenditure indicates the increase in activity levels
in the group inclusive of those on the corporate development front.
- Uranium One converted a large portion of its Canadian cash resources
into South African Rand in anticipation of construction expenditure
for the Dominion Project. As the Rand depreciated against the US
dollar during Q2 2006, Uranium One recognised a foreign exchange loss
on cash and cash equivalents of $14.2 million.
- The net loss per share for Q2 2006 was $0.18, with a year to date net
loss per share of $0.21.
- Construction at the Dominion Project is on track and constitutes the
largest portion of the increase in Property, Plant and Equipment to
$209.0 million as at June 30, 2006 from $157.3 million as at December
31, 2005.
- Cash balances available at June 30, 2006 reduced to $89.0 million
(March 31, 2006: $134.9 million) primarily as a result of the
construction activities at the Dominion Project.
>>
Commenting on the Corporation's progress, Neal Froneman, President and
CEO of Uranium One said: "We have reached a number of important milestones in
pursuing our strategy of becoming one of the world's major uranium producers.
We have been able to declare our first uranium reserves with the completed
Dominion feasibility study. We are on target to begin producing uranium in the
first quarter of 2007 and as such within months we will be an active uranium
producer with a steadily increasing uranium production profile. Our global
growth strategy continues to move forward with the recent announcement of two
key acquisition opportunities in the United States. We will continue to
develop our exciting pipeline of uranium projects."
About sxr Uranium One
sxr Uranium One Inc. is a Canadian uranium and gold resource company with
a primary listing on the Toronto Stock Exchange and a secondary listing on the
Johannesburg Stock Exchange. The Corporation owns the Dominion Reefs Uranium
Mine in South Africa and the Honeymoon Uranium Project in South Australia, as
well as a number of exploration projects. The Corporation holds an approximate
75% interest in Aflease Gold Limited, which owns the Modder East gold project
in South Africa. Through a joint venture with Pitchstone Exploration Ltd., the
Corporation is also engaged in uranium exploration activities in the Athabasca
Basin of Saskatchewan.
Cautionary Statement
No stock exchange, securities commission or other regulatory authority
has approved or disapproved the information contained herein.
This News Release includes certain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995 and
"forward-looking information" within the meaning of applicable Canadian
legislation. All statements other than statements of historical fact, included
in this release, including, without limitation, statements regarding potential
mineralization and reserves and future plans and objectives of Uranium One,
are forward looking statements (or forward-looking information) that involve
various risks and uncertainties. There can be no assurance that such
statements will prove to be accurate and actual results and future events
could differ materially from those anticipated in such statements. Important
factors could cause actual results to differ materially from Uranium One's
expectations. Such factors include, among others, the actual results of
exploration activities, actual results of reclamation activities, the
estimation or realization of mineral reserves and resources, the timing and
amount of estimated future production, costs of production, capital
expenditures, costs and timing of the development of new deposits,
availability of capital required to place the company's property into
production, conclusions of economic evaluations, acceptance of the Dominion
feasibility study by lending institutions, changes in project parameters as
plans continue to be refined, future prices of commodities, possible
variations in ore grade or recovery rates, failure of plant, equipment or
processes to operate as anticipated, accidents, labor disputes and other risks
of the mining industry, delays in obtaining governmental approvals, permits or
financing or in the completion of development or construction activities,
Uranium One's hedging practices, currency fluctuations, title disputes or
claims limitations on insurance coverage, as well as those factors discussed
under "Risk Factors" in Uranium One's Annual Information Form and Management's
Discussion and Analysis as filed with securities regulatory authorities in
Canada. Although Uranium One has attempted to identify important factors that
could cause actual results to differ materially, there may be other factors
that cause results not to be as anticipated, estimated or intended.
There can be no assurance that such 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 does not undertake to
update any forward-looking statements that are included herein, except in
accordance with applicable securities laws.
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the Corporation's website: www.uranium1.com
%SEDAR: 00005203E
