Uranium One Announces Strong Production Results for Year to Date 2010 and Record 2009 Production and Revenue

Thursday, Mar 11, 2010

Uranium One Inc. today reported operational and financial results for the year ending December 31, 2009, as well as production results for the first two months of 2010. 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 U(3)O(8).

        Highlights
        Operational Results
        -  Strong attributable production results during the first two months of 2010 of 1.2 million pounds
    -  Ramp-up of South Inkai continuing to perform well with attributable production of 491,400 pounds during the first two months of 2010 and improved concentrations of uranium in solution
    -  Record attributable production during 2009 of 3.6 million pounds, a 24% increase compared to the 2.9 million pounds produced in 2008
    -  Average total cash cost per pound sold was $16 during 2009, compared to $14 per pound sold during 2008
   
    2009 Financial Results
    -  44% increase in attributable sales volumes for 2009 to a record of
       3.2 million pounds, compared to 2.2 million pounds during 2008
    -  Revenue for 2009 was $152 million at an average realized sales price of $48 per pound, compared to 2008 revenue of $150 million at an average realized sales price of $68 per pound
    -  Earnings from mine operations were $55 million for 2009, down from $97 million in 2008, mainly due to lower realized sales prices
    -  Dividend of $20 million, net of Kazakh withholding taxes, received from the Company's Betpak Dala joint venture in December 2009
   
    Corporate
    -  Acquisition of a 50% interest in the Karatau Uranium Mine completed in December 2009
    -  Completion of convertible debenture financing with a Japanese consortium and receipt of aggregate proceeds of approximately C$270 million in January 2010
    -  Acquisition of Christensen Ranch and Irigaray in Wyoming completed in January 2010
    -  Bought deal financing announced in February 2010 for C$250 million aggregate principal amount of convertible unsecured subordinated debentures. Closing is expected to take place on March 12, 2010
    -  New directors - Uranium One appointed Vadim Zhivov, Director General of ARMZ, Akihiro Takubo, Senior Fellow, Business Development of Toshiba Corporation Power Systems Company and Shigeo Fujinami, Group Manager, Uranium Business Strategy Group, Nuclear Fuel Cycle Department of Tokyo Electric Power Company to its board of directors

Jean Nortier, President and CEO of Uranium One commented:

"During 2009, Uranium One made excellent progress toward executing our strategy of establishing strong partnerships with leading companies in the nuclear industry, as well as acquiring additional high quality assets which will continue to fuel the growth of the Company as a low cost and reliable supplier of uranium. Our primary goal for 2010 is to achieve our production and cost targets for our operations, and to look for opportunities to continue to add quality assets to our portfolio."

Outlook

During 2010, Uranium One is focused on maintaining production from Akdala at current levels, ramping up production at South Inkai and Karatau towards full production, successfully commissioning its development projects, controlling costs at its operations and remaining a reliable supplier of uranium to the nuclear fuel industry.

Uranium One's attributable production estimate for 2010 is 6.8 million pounds. For 2011, attributable production is estimated to be 8.0 million pounds, including initial production from the Powder River Basin in Wyoming.

During 2010, the average cash cost per pound sold is expected to be approximately $14 at Akdala and Karatau, and approximately $20 at South Inkai.

Uranium One's 2010 attributable sales are expected to be approximately 6 million pounds.

Attributable capital expenditures for 2010 are estimated to be $151 million, including approximately $90 million for the Company's mines and development projects in Kazakhstan, and $61 million for its development projects in Australia and the United States.

Other 2010 expenditures are estimated to be $29 million for general and administrative expenses (excluding stock-based compensation), $7 million for exploration, and $1 million for care and maintenance expenses.

Operations and Projects

For the year 2009, Uranium One's attributable production was 3.6 million pounds U(3)O(8), an increase of 24% over attributable production of 2.9 million pounds U(3)O(8) for 2008. The average cash cost per pound sold was $16 per pound during 2009, compared to $14 per pound during 2008.

Results for Uranium One's operations and project during 2009 were:
        -  Akdala Uranium Mine - attributable production was 1.9 million pounds; total cash costs were $12 per pound sold
    -  South Inkai Uranium Mine - attributable production was 1.5 million pounds; total cash costs were $21 per pound sold
    -  Karatau Uranium Mine(1) - attributable production was 73,100 pounds; total cash costs were $12 per pound sold
    -  Kharasan Uranium Project - attributable production during commissioning of 81,700 pounds
    Note:
    1.  Attributable production from the acquisition date of December 21, 2009.

Uranium One's operations and project have achieved strong attributable production results of approximately 1.2 million pounds U(3)O(8) during January and February 2010. Production details for the first two months of 2010 are as follows: 

    -  Akdala Uranium Mine - attributable production was 346,200 pounds; the concentration of uranium in solution has increased from an average of 68 mg per litre during Q4 2009 to 78 mg per litre
    -  South Inkai Uranium Mine - attributable production was 491,400 pounds; the concentration of uranium in solution has increased from an average of 74 mg per litre during Q4 2009 to 103 mg per litre
    -  Karatau Uranium Mine - attributable production was 315,900 pounds; the concentration of uranium in solution remains high at 223 mg per litre, compared to 211 mg per litre during Q4 2009
    -  Kharasan Uranium Project - attributable production was 20,300 pounds; the concentration of uranium in solution remained at 49 mg per litre, in line with the average of 49 mg per litre during Q4 2009

2009 Financial Review

Revenue of $152 million in 2009 increased by 1% compared to $150 million in 2008, due to higher sales volumes offset by lower average realized uranium prices.

Operating expenses per pound sold increased by 16% to $16 per pound in 2009 compared to $14 per pound in 2008, mainly due to the higher initial cash cost of production at South Inkai of $21 per pound in 2009. South Inkai commenced commercial operations on January 1, 2009.

The increase in total average operating expenses, combined with a 30% decrease in 2009 average realized sales prices compared to 2008, resulted in a 44% decrease in earnings from mine operations to $55 million in 2009 from $97 million in 2008.

Attributable inventory as at December 31, 2009, which includes work in progress as well as finished product ready to be shipped or in transit, was 2.1 million pounds of U(3)O(8).

The adjusted net loss for 2009 was $36.5 million, or $0.08 per basic share compared to adjusted net earnings for 2008 of $22.3 million, or $0.05 per basic share.

Consolidated cash and cash equivalents were $148.5 million as at December 31, 2009 and working capital was $18.8 million as of the same date.

Conference Call Details

Uranium One will be hosting a conference call and webcast to discuss its 2009 results on Thursday, March 11, 2010 starting at 10:00 a.m. (Eastern Time). Participants may join the call by dialling toll free 1-888-231-8191 or 1-647-427-7450 for local calls or calls from outside Canada and the United States. A live webcast of the call will be available through CNW Group's website at: www.newswire.ca/en/webcast

A recording of the conference call will be available for replay for a two week period beginning at approximately 12:00 p.m. (Eastern Time) on March 11, 2010 by dialling toll free 1-800-642-1687 or 1-416-849-0833 for local calls or calls from outside Canada and the United States. The pass code for the replay is 55635030. A replay of the webcast will be available through a link on our website at www.uranium1.com

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, South Africa and Australia.

Source: Uranium 1