TORONTO (miningweekly.com) – Toronto- and Johannesburg-listed Uranium One, which is in the process of being taken private for $1.32-billion by its 51.4% shareholder Atomredmetzoloto (ARMZ), on Wednesday reported a $68.8-million net loss in the fourth quarter as it wrote down its investment in Mantra Resources.
The uranium miner said it wrote down the value of its investment in Mantra by $102.3-million as a result of delays in the expected initial production, mainly from permitting delays at Mantra’s Mkuju River project, increased capital expenditure experienced in the industry, and lower uranium prices.
The company said the loss amounted to $0.07 a share in the fourth quarter ended December 31, compared with a loss of $1.1-million or zero cents per share a year earlier.
Excluding the charge and other one-time items, the company reported an adjusted profit of $34.9-million or $0.04 a share for the quarter, compared with an adjusted profit of $21.4-million or $0.02 a share in the fourth quarter of 2011. Analysts on average expected adjusted earnings of 4c a share for the quarter.
During the period, revenue rose by 44% to $227.6-million, up from $157.9-million in the same period of 2011.
Uranium One sold 5.1-million pounds of uranium at an average realised price of $44/lb, almost 60% more when compared with nearly 3.2-million pounds produced at $50/lb a year earlier.
The company said it expected to produce about 12.5-million pounds of uranium at a cost of $19/lb this year, and ten-million pounds in 2014.
Uranium One shareholders earlier this month voted in favour of an offer from Russia's State-owned ARMZ to take it private by buying the shares it does not already own. About 96% of shareholders voted in favour of the going-private transaction.
ARMZ already owned 51.4% of common shares in Uranium One, Canada's second-largest uranium company. ARMZ is the mining arm of Russia's nuclear regulator, Rosatom, which also builds nuclear reactors.
The company had said it expects to close the deal in the second quarter of this year.
ARMZ had agreed to pay $2.86 cash per share for the stock that it did not already own, which valued Uranium One at about $2.8-billion.
Uranium One owns assets in the US, Kazakhstan, Australia and Tanzania.
Uranium One shares traded 1.27% higher at C$2.79 apiece on Wednesday on the TSX.