* Q2 net loss $0.02/shr vs loss $0.57/shr year ago
* Boosts 2010 guidance on record production
* Shares up 8.8 pct at C$3.09 in Toronto
(Adds CEO comments; in U.S. dollars unless noted)
By Julie Gordon
TORONTO, Aug 9 Shares in Uranium One UUU.TO
were up nearly 9 percent on Monday as the Canadian miner
reported a narrower quarterly loss and increased its 2010
production forecast as output rose to a record high.
The Vancouver-based uranium miner posted a loss of $9.7
million, or 2 cents a share, for the quarter ended June 30.
That compares with a year-before loss of $265.7 million, or 57
cents, when the company was hit by a $251 million writedown for
a mine closure.
Analysts polled by Thomson Reuters I/B/E/S had expected, on
average, a loss of 1 cent a share.
The adjusted net loss for the quarter was $1.3 million, or
nil per share, compared with a year-before adjusted loss of
$12.9 million, or 3 cents a share.
Revenue rose 256 percent to $66 million due to higher sales
volumes, but was offset by a lower selling price for uranium,
which dropped to $43 a pound in the quarter from $48 a year
"Our business is firing on all cylinders," Chief Executive
Jean Nortier said in a telephone interview, adding that the
company's Inkai South mine had performed better than expected
in the quarter and that a deal to sell a controlling stake to
Russia's ARMZ was on track to close by the end of the year.
Uranium One reported a record second-quarter production of
1.8 million pounds, up 119 percent from a year earlier. The
increase was attributed to the acquisition of a 50 percent
stake in the Karatau mine, as well as the continued ramp up at
South Inkai mine. Both projects are in Kazakhstan.
The company also increased its production guidance for 2010
to 7.0 million pounds from 6.8 million pounds on better than
expected performance at South Inkai.
Nortier said that the still shaky global economic climate
was having little effect on the uranium business, which he sees
booming over the next few years.
"So we're seeing an incredible amount of new nuclear
reactors being constructed all over the world," he said. "So we
think the nuclear renaissance is very much alive and happening
as we speak."
Nortier also said that the company was not charged the
Kazakh excess profits tax in 2009 and does not expect to be
charged in 2010, as the tax is currently not applicable to
Shares in Uranium One were up 8.8 percent at C$3.09 on the
Toronto Stock Exchange on Monday afternoon.
"The street likes it, the increased production forecast
going forward," said analyst David Wargo of GMP Securities.
Uranium One announced in June that ARMZ, a division of
Russian state-owned nuclear giant Rosatom, would increase its
stake to 51 percent from 23 percent in exchange for $610
million in cash and stakes in two Kazakh mines.
Nortier said earlier in a conference call with shareholders
that applications have been submitted to the involved
governments, and that talks on the deal, which gives Uranium
One a 50 percent stake in the Akbastau mine and 49.7 percent
interest in the Zarechnoye mine, have been positive.
Rosatom, one of the largest builders of nuclear power
plants outside of Russia, is depending on Uranium One to
guarantee fuel to its facilities around the world.
With the deal, ARMZ will be entitled to 51 percent of
available attributable material, meaning uranium not contracted
to other parties.
Currently, most of Uranium One's production goes to
Kazakhstan and the United States, with a small amount going to
Once current contracts have expired, up to 50 percent of
Uranium One's product will go to Russia, Nortier said. He added
the company will continue to provide a reliable source of
uranium to the North American market.
Uranium One shareholders will vote on the transaction at
the end of August.
(Reporting by Julie Gordon; editing by Rob Wilson)