TORONTO (miningweekly.com) – Vancouver-based Uranium One lost $11,9-million in the third quarter, compared with a $2-billion loss a year earlier, when the firm recorded a massive write-down mainly related to its Dominion project, in South Africa, but also of assets in the US and Australia.

After stripping out certain items, Uranium One reported a third-quarter adjusted net loss of $7,8-million, compared with a $5,6-million adjusted profit in the same period of last year.

Revenue for the quarter dropped 62% year-on-year, to $21,3-million, after sales volumes declined by 50% and the average realised uranium price, at $50/lb, was 25% lower.

The company's operating costs also rose 8%, to an average of $15/lb sold, which Uranium One attributed to the higher initial costs at the South Inkai mine, in Kazakhstan, which started commercial operations on January 1 this year.

However, the costs were an improvement on the performance in the second quarter.

“Our operations continue to generate some of the highest margins in the industry, with our total cash cost per pound sold decreasing by approximately 14% during the third quarter to $15/lb,” CEO Jean Nortier said in a statement.

Production for the quarter actually rose 19% year-on-year, to 834 800 lb attributable to Uranium One.

However, Uranium One saw its attributable inventory run up to 1,7-million pounds by the end of the quarter, compared with 1,4-million at June 30, as more uranium was produced than sold in the third quarter.

Attributable sales amounted to 423 100 lb, which was in line with scheduled deliveries under contracts with customers, the company said.

Uranium One produces the nuclear fuel from mines in Kazakhstan, but also has projects in Australia and the US, as well as Dominion in South Africa, which it has earmarked for sale.

OUTLOOK

The company has maintained its attributable production guidance for this year at 3,5-million pounds, but said on Friday that expected output in 2010 has been lowered to 6,8-million pounds of uranium, assuming the acquisition of a 50% joint venture in the Karatau mine, in Kazakhstan, is completed by year-end.

The firm had previously forecast 7,5-million pounds of attributable production next year, but said the lower figure was a result of a revised production plan at the Kharasan mine, which is battling ongoing well-field underperformance, and a “more gradual” ramp-up at South Inkai.

However, attributable production for 2011 is expected to increase to eight-million pounds, which will include initial production from the company's first US operations, in the Powder River Basin in Wyoming.

Uranium One shares fell 1,55% on Friday morning, to C$3,18 apiece by 10:10 in Toronto.

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