Uranium One books US$2.8B in writedowns in ‘deteriorating economic climat
November 15th, 2008 - Posted in uraniumVANCOUVER, B.C. - Uranium One Inc. (TSX:UUU) has taken a US$2.8-billion writedown, partly offset by an $800-million reduction in future tax liabilities, and is cutting costs across all operations amid a “deteriorating economic climate.”
The company, active in Kazakhstan, South Africa, the United States and Australia, placed the Dominion mine in South Africa on care and maintenance last month, and is delaying or seeking partners in other projects while cutting exploration spending.
Uranium One, which keeps its books in U.S. dollars, said Friday it booked a third-quarter net loss from continuing operations of $2 billion or $4.30 per share.
Excluding one-time items, the company said it earned $4.3 million or a penny per share, up from a year-ago adjusted loss of $15 million, four cents per share.
Revenue for the latest quarter was $49.4 million, as Uranium One sold 848,100 pounds of yellowcake at $67 per pound against an average cash cost of $14 a pound.
The $2.8 billion in balance-sheet impairment of mineral interests, plant and equipment included $1.8 billion on Dominion, $700 million on U.S. exploration properties, $200 million on Honeymoon and exploration in Australia, and $100 million on the Hobson processing facility in Texas and other assets.
Uranium One said it held $98.9 million in cash and equivalents at Sept. 30, down from $133.2 million at the start of the quarter. It has since drawn $65 million on its credit line to bolster its cash.
“Uranium One has responded to the current challenging economic conditions by re-evaluating our project portfolio and focusing on our low-cost assets in Kazakhstan, while continuing to develop our key projects in other jurisdictions,” stated CEO Jean Nortier.
“Our cash resources on hand are sufficient to continue to develop our priority projects.”
