PERTH (miningweekly.com) – ASX-listed Energy Resources of Australia (ERA) has generated its final revenue from uranium sales during the half-year ended June, with the company selling 242 t of uranium during the period.

Production at the Ranger mine, in the Northern Territory, ceased in January 2021, in accordance with the Ranger Authority, and ERA has been undertaking rehabilitation efforts since that time.

The company on Tuesday announced a negative cash flow from operating activities of A$34-million for the half-year ended June 2022 compared to negative A$13-million for the same period in 2021, with rehabilitation costs incurred for the half-year reaching A$80-million compared to A$70-million for the same period in 2021.

The net loss was also adversely impacted by a significant non-cash increase in unwind of discount and inflation relating to the higher rehabilitation provision balance and higher rates of inflation at present. Favourable impacts were seen from additional gasoil swap contract gains as a result of strengthening fuel prices, revenue from sale of assets and lower operating costs, ERA told shareholders.

Revenues from sales of uranium oxide were A$35-million for the half-year compared to A$53-million for the same period in 2021.

Sales volume for the period was 242 t including the sale of final uranium oxide inventories in May 2022, compared to 351 t for the June 2021 half-year. All sales were made into the spot market, achieving an average realised sales price of $48.88/lb compared to the average realised price on all sales for the same period in 2021 of $51.39/lb.

Meanwhile, ERA said on Tuesday that progressive rehabilitation at the Ranger project continued during the first half, with the company previously revealing it would require a further A$1.06-billion to A$1.65-billion in capital expenditure to complete rehabilitation of the uranium project.

An earlier independent review of the rehabilitation had estimated a cost of between A$1.6-billion and A$2.2-billion for the project, compared with the 2019 cost estimates of A$973-million, while pushing back the completion of rehabilitation work to between the fourth quarter of 2027 and the fourth quarter of 2028.

ERA approached its largest three shareholders with an interim funding proposal to raise an initial A$300-million to fund the rehabilitation work until the end of 2023, however, major shareholder Rio Tinto was unwilling to take part in the scheme at the price suggested by ERA’s independent board committee (IBC).

Rio argued that further investment into the uranium company was unlikely to generate financial returns, given that the funding would be used for rehabilitation work, and that the offer price of any interim raising should reflect fair value to that expectation.

ERA”s IBC has engaged an independent valuation expert to determine the fair value of the company and the offer price for an interim entitlement offer, and will advise shareholders of this proposed offer once they have been determined, which is expected late in the third quarter.