TORONTO (miningweekly.com) – TSX- and JSE-listed Uranium One produced 833 900 lb during the second quarter, a record for the company and an increase of 18% over attributable production in the first quarter of 708 500 lb of uranium.

Shares in Uranium One rose 7,1% on Thursday, to C$2,72 apiece by 16:15 in Toronto.

The company sold 385 000 lb during the June quarter, bringing total attributable sales for the first six months of the year to 1,27-million pounds.

Uranium One has interests in three operating mines in Kazakhstan, as well as one under construction in Australia, and hopes to start production at its assets in the US in the next few years. It has also mothballed an underperforming mine in South Africa.

In Kazakhstan, the Akdala mine's, in which the company holds 70%, continues to produce “in line with expectations”, Uranium One said on Thursday morning.

The firm also holds 70% of the South Inkai mine, which declared commercial production on January 1 this year and continues to ramp up output as planned.

By the end of the second quarter, 134 of the 343 wells scheduled to be installed this year at South Inkai had been installed, and the operation remains on track to commission the drying circuit by year end.

The circuit will help Uranium One cut operational costs, because the company expects Akdala will be also able to use excess drying capacity at South Inkai, which will reduce the need to use third-party processing facilities for drying and calcining.

At the firm's third Kazakh mine, Kharasan, in which it owns 30%, precommercial production has lagged expectations.

However, a new management team was put in place earlier in the year, and steps are being taken to tackle the factors contributing to underperformance from the well field.

New wells are being installed in existing well fields and some of the existing wells are being reworked to improve flow rates.

Additional flow meters and more powerful pumps have also been installed to improve well field operations, Uranium One said.

The company's interest in Kharasan catapulted it into the spotlight in late May, after a Kazakh government agency said it was investigating illegal sales of uranium assets to foreign companies, and singled out the mine as an example.

However, Kazatomprom has since publicly assured its partners that all existing agreements would be honoured.

Last month, the firm announced it would buy a 50% stake in another operation in Kazakhstan, boosting its 2010 production forecast by about one-third. The transaction is expected to close by December 15.

The company also expects a $270-million private placement to a consortium comprising the Tokyo Electric Power Company, Toshiba Corporation and the Japan Bank for International Cooperation to close later this year, once all regulatory approvals have been received.

SOUTH INKAI RESOURCE

Uranium One also reported on Thursday that it has completed an updated NI 43-101 compliant mineral resource estimate for the South Inkai operation, in which a significant proportion of the resource has been upgraded from inferred to the indicated category.

As of December 31, 2008, the South Inkai uranium mine was estimated to contain total indicated resources of 34,1-million tons at a grade of 0,053%, containing 39,6-million pounds of the nuclear fuel, of which 27,7-million pounds are attributable to Uranium One.

Inferred resources stood at 42,8-million tons at a grade of 0,047%, containing 44,4-million pounds,  or 31,1-million pounds attributable to Uranium One.

The previously reported mineral resource estimate, dated October 2006 ,was 57,7-million tons, grading 0,048%, containing at total of 62-million pounds in the inferred category.

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