RNS Number:8370T
UraMin Inc
27 March 2007
Tuesday 27 March 2007
UraMin Inc.
("UraMin" or "the Company")
Preliminary Results
for the Year Ended 31 December 2006
Significant progress since AIM Listing
Landmark year in prospect
UraMin (AIM and TSX: UMN), the emerging uranium producer, announces preliminary
results for the year ended 31 December 2006, its first preliminary results since
listing on AIM in April 2006. The Company's major assets are the Trekkopje
Project, Namibia; the Bakouma Project, Central African Republic; and the Ryst
Kuil Project, South Africa.
Highlights
* Admitted to AIM in April and listed on Toronto Stock Exchange in
December under the symbol "UMN"
* Feasibility Study for Trekkopje in Namibia on track for completion in
the third quarter of 2007
* Acquired 90% interest in the Bakouma project in CAR and Feasibility
Study underway
* Licences granted at Ryst Kuil in South Africa and SRK appointed to
manage Feasibility Study
* Current working capital approximately US$300 million and no debt
* Increased portfolio of exploration properties in Africa and North
America
Ian Stalker, Chief Executive of UraMin, said:
"UraMin has made significant progress on all its mineral properties in 2006 and
now has three feasibility stage uranium projects underway all of which are near
term production opportunities. Following the recent fundraising UraMin has
approximately US$300 million to advance these projects. A trial mine is planned
at Trekkopje by the end of 2007 and we expect to be in commercial production by
the end of 2008. We are on track to meet our target of being a mid-tier uranium
producer early 2009."
For further information:
UraMin
Ian Stalker, Chief Executive Officer Tel: +27 (0)11 783 5056
Neil Herbert, Finance Director Tel: +27 (0)11 783 5056
Canaccord Adams Limited Tel: +44 (0)20 7050 6500
Robin Birchall / Tyler Broda
Toronto Tel: +1 416 643 6924
Steve Vaughan
Financial Dynamics Tel: +44 (0)20 7831 3113
Ben Brewerton / Edward Westropp
Chairman's Statement
The scale of the world's nuclear industry is growing and UraMin is very well
placed to take advantage of this growth in demand for uranium.
Global primary reactor-driven demand is currently estimated at 147 million lbs
of U308 each year. In 2005 only about 64 per cent of this demand was satisfied
by mine production with the balance being supplied from secondary stockpiles.
As these secondary stockpiles decline the demand for new sources of mined
uranium is growing and the price of uranium has been rising.
Moreover, concerns over global oil supplies and global warming have renewed
interest in expanding nuclear energy supply. Improved reactor performance,
extended fuel cycles, increased generating capacity and reduced operating costs
are also contributing to a revival in nuclear power. There are already 441
nuclear power reactors operating in 31 countries, however, as of January 2006,
there were a further 24 reactors under construction with an additional 154
pending approval or approved. In addition to new plants, in many cases the
generating capacity of existing reactors is being increased and plant life
extended. It is estimated that over 90 per cent of the reactors in the United
States could apply for and be granted life extensions.
With three advanced-stage uranium projects, UraMin is moving quickly towards
production and is set to become Africa's leading uranium producer. We look
forward to a rewarding period of growth.
Samuel Jonah KBE
Review of Operations
Trekkopje Project - Namibia
The Trekkopje Project* is the largest and most advanced UraMin project, and is
located in Western Namibia in close proximity to other operating uranium mines.
The Trekkopje project is 100% owned by UraMin Namibia, a wholly-owned Namibian
subsidiary of the Company. The Trekkopje Project consists of two broad,
shallow, calcrete uranium deposits: the Trekkopje deposit and the Klein
Trekkopje deposit.
In November 2006, the Ministry of Mines and Energy ("MME") formally granted
UraMin Namibia an Exploration Licence ("EPL") covering the 37,368ha of the
Trekkopje Project area. In addition, an EPL was granted covering 91,611ha of
surrounding area with highly prospective exploration potential.
SRK Consulting (US) Inc. ("SRK") of Denver, Colorado was retained by the Company
in May 2005 to prepare a Definitive Feasibility Study ("DFS") on the Trekkopje
Project which is expected to be completed in the third quarter of 2007.
Since the year end, SRK has published its interim report which demonstrated the
potential for simple and cost-effective open pit mining, as 80% of the known
mineralisation is shallower than 15 metres, below a nominal 2 metre alluvial
surface. Heap leach is currently the preferred processing technology following
successful initial test work that indicated recoveries of approximately 75%. On
this basis, SRK has predicted a production profile for Trekkopje rising to 8.4
million lbs U308 per year. This compares favorably with the 3.3 million lbs
U308 per annum of production previously forecast using tank leach processing.
Importantly, water consumption using heap leaching is substantially lower than
would be the case with tank leaching.
A trial mine is planned for the fourth quarter of 2007 and commercial production
is planned for late 2008 with an initial estimated production rate of 4.2
million lbs in 2009 scaling up to 8.4 million lbs in 2011 for total production
of 61 million lbs U3O8 and 20 million lbs V2O5 . SRK estimated operating costs
of US$18.07 per lb U3O8 after credit (US$20.08 per lb without V2O5 credit) and
estimated start up capital expenditure of approximately US$0.5bn.
Bakouma Project - Central African Republic
The Bakouma Uranium Project** is a high grade deposit located near the village
of Bakouma about 100km north of the Central African Republic's (CAR) southern
border with the Democratic Republic of the Congo. The Project consists of ten
documented uranium deposits in close proximity to one another. A review of the
studies conducted by Compagnie des Mines d'Uranium de Bakouma and Societe de
l'Uranium Centrafricain between 1969 and 1977 revealed an exploration target in
excess of 7 million tonnes at an average grade in excess of 0.26% U3O8 (which
translates to 18,000 tonnes or 41 million lbs of U3O8). (1)
In May 2006, the Company acquired a 90% interest in a mining license granted
over the 10 known uranium deposits in the Bakouma Basin. The Company also
entered into a mining convention with the Central African Republic which
provides for a stable and favourable fiscal regime for the duration of the
25-year mining licence.
An exploration programme, largely consisting of a confirmatory drilling
programme, commenced in August 2006. Phase 1 of this programme will be completed
shortly. The programme consists of 238 holes and is expected to enable UraMin
to issue a NI 43-101 compliant resource statement covering an area representing
approximately half of the targeted 41 million lbs.
In December 2006 UraMin awarded the DFS for the Bakouma Project to GRD Minproc
(Pty) Ltd. The DFS is scheduled for completion in the second quarter of 2008.
Since the year end, in February 2007, the Company was awarded two additional
prospecting licenses which extend the Bakouma project area to 2,900 sq. km.
(1) Based on historical estimates completed by Compagnie des Mines d'Uranium
de Bakouma and Societe de l'Uranium Centrafricain between 1969 and 1977 These
historic estimates do not comply with NI 43-101 standards and should not be
relied on as they do not conform to mineral category definitions used in codes
recognized by NI 43-101.
Ryst Kuil Project - South Africa
The Company's assets in South Africa are comprised of a 74% interest in both the
Ryst Kuil and the Riet Kuil properties (together referred to as the "Ryst Kuil
Project"). The Ryst Kuil Project is located approximately 50 km south-east of
the town of Beaufort West in the Western Cape.
UraMin has also identified several areas of interest in the Sutherland district
and hopes to acquire licences in this area in due course. The area has been
explored and evaluated in the past by various companies including Union Carbide
Corporation, Anglo American and Esso Minerals Africa Inc.
Since the year end, SRK/Senet has been appointed to undertake Consulting and
Engineering Services for the completion of the DFS for the Ryst Kuil Project.
This work is expected to commence shortly.
An exploration programme designed to deliver an NI 43-101 compliant resource
statement to DFS standard within 12 months is underway. The Directors believe
that the property is capable of being placed into commercial production by late
2009 at the rate of 2.6-3.0 million lbs uranium per year with significant
molybdenum by-product.
Financing
UraMin has raised approximately US$397 million for operations since it was
admitted to the AIM market of the London Stock Exchange. In April 2006 the
Company raised gross proceeds of US$60 million by means of a private placement
of shares. Immediately prior to the Toronto Stock Exchange listing in December
2006, the Company raised a further US$70 million by means of a placement of
shares. Subsequent to the year end, in March 2007, the Company completed a
further placement of shares to raise an additional US$226 million. At the date
of this report the Company has working capital of approximately US$300 million
and no debt.
Outlook
UraMin has made significant progress on all its major projects since its
admission to AIM in April 2006 and following the recent fundraising it is well
placed to advance these projects. A trial mine is planned at Trekkopje by the
end of 2007 and the Company expects to be in commercial production by the end of
2008. UraMin is on track to meet our target of becoming a mid-tier uranium
producer
Glossary
DFS Definitive feasibility Study: a comprehensive study of a deposit in which all geological, engineering,
operating, economic and other relevant factors are considered in sufficient detail for it to reasonably serve
as the basis for a final decision by a financial institution to finance the development of the deposit for
mineral production
EPL Exclusive Prospecting License
U308 ppm Triuranium octaoxide
V205 Vanadium pentoxide
NI 43-101 National Instrument 43-101 - Standards of Disclosure for Mineral Projects, Form 43-101F1 and Companion Policy
43-101CP
Measured A 'Measured Mineral Resource' is that part of a mineral resource for which quantity, grade or quality,
Resource densities, shape, and physical characteristics are so well established that they can be estimated with
confidence sufficient to allow the appropriate application of technical and economic parameters, to support
production planning and evaluation of the economic viability of the deposit. The estimate is based on
detailed and reliable exploration, sampling and testing information gathered through appropriate techniques
from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to
confirm both geological and grade continuity.
Indicated An 'Indicated Mineral Resource' is that part of a mineral resource for which quantity, grade or quality,
Resource densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow
the appropriate application of technical and economic parameters, to support mine planning and evaluation of
the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing
information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings
and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.
Lb Pound
Uranium Heavy silvery-white metallic element found in several minerals, notably uraninite and carnotite
Tpd Tonnes per day
*Trekkopje Project, Namibia
The resource information contained in this announcement has been reviewed by
Allan Moran, Principal Geologist with SRK. He is the Qualified Person overseeing
the Trekkopje Project drilling and resource estimation activities for the
purposes of NI 43-101 compliance. Mr. Moran has sufficient experience relevant
to the style of mineralisation and type of deposit under consideration and to
the activity which he is undertaking, to qualify as a Qualified Person for the
purposes of this announcement.
Resource estimation by SRK follows CIM (Canadian Institute of Mining and
Metallurgy) resource classification categories, and resources were determined
using background-corrected eU3O8 radiometric probe data, ordinary kriging for
grade estimation and industry standard block modelling techniques. Industry
accepted "Best Practices Guidelines" were followed in data collection,
documentation, analyses, and reporting. UraMin has a QA/QC program in place for
sample analytical data and down-hole radiometric probe data. The stated
Trekkopje Project resource estimates are based on entirely new drilling data
collected in 2006 by UraMin, and does not include any historical drill hole
data.
SRK's Interim Progress Update Report on the Trekkopje Project represents the
latest view of project concepts, designs and likely projected outcomes based on
the work conducted to date, industry accepted practice and certain project
specific assumptions. Readers are cautioned that the results reported are not
definitive and maybe subject to change as further work is undertaken. Project
outcomes may ultimately be materially different from those projected in this
report.
**Bakouma Project, Central African Republic
Information in this document which relates to the Bakouma Project, Central
African Republic has been reviewed by Mr. G M Greenway of Snowden Mining
Industry Consultants. A Registered Natural Scientist with the South African
Council for Natural Scientists. Mr Greenway is an independent consultant to
UraMin and has consented to the inclusion in this announcement of his name in
the form and context in which it appears.
Financial Results
Unaudited consolidated income statement for the year ended 31 December 2006
Year ended 31 December 10 month period ended 31
December
2006 2005
$ $
Operating loss (25,846,279) (3,103,897)
Finance income 2,063,268 220,958
_____ _____
Loss for the year attributable to (23,783,011) (2,882,939)
equity holders of the parent _____ _____
Basic loss per share (cents) (14.9) (3.3)
_____ _____
Unaudited consolidated statement of recognised income and expense for the year
ended 31 December 2006
Year ended 31 10 month period ended
December 31 December
2006 2005
$ $
Exchange adjustment on translation of subsidiary and (609,703) (2,484)
branch undertakings recognised directly in equity
Loss for the year attributable to equity holders of (23,783,011) (2,882,939)
the parent _____ _____
Total recognised income and expenses relating to the (24,392,714) (2,885,423)
year _____ _____
Unaudited consolidated balance sheet at 31 December 2006
At 31 December 2006 At 31 December 2005
$ $
ASSETS _____ _____
Non-current assets 52,279,915 16,890,165
_____ _____
Property, plant and equipment 2,000,513 1,139,267
Intangible assets 50,279,402 15,750,898
_____ _____
Current assets 97,896,146 25,352,931
_____ _____
Trade and other receivables 1,140,058 779,326
Cash and cash equivalents 96,756,088 24,573,605
_____ _____
Total assets 150,176,061 42,243,096
_____ _____
EQUITY AND LIABILITIES
Equity attributable to equity holders of the 145,526,517 37,547,557
parent _____ _____
Share premium account 167,070,241 40,432,980
Warrant reserve 2,174,388 -
Foreign currency translation reserve (612,187) (2,484)
Retained earnings (23,105,925) (2,882,939)
_____ _____
Liabilities
Non-current liabilities 2,387,723 3,653,624
_____ _____
Finance lease 63,075 -
Installment sale obligation 2,324,648 3,653,624
_____ _____
Current liabilities 2,261,821 1,041,915
_____ _____
Trade and other payables 2,244,478 1,041,915
Current portion of finance lease 17,343 -
_____ _____
Total equity and liabilities 150,176,061 42,243,096
_____ _____
Unaudited consolidated cash flow statement for the year ended 31 December 2006
Year ended 31 December 10 month period ended 31
December
2006 2005
$ $
Cash flows from operating activities (22,526,619) 809,832
_____ _____
Cash flow from investing activities
Interest received 2,063,268 220,958
Purchase of property, plant and equipment (1,014,667) (1,139,267)
Purchase of intangible assets (34,528,504) (15,750,898)
_____ _____
Net cash outflow used in investing (33,479,903) (16,669,207)
activities _____ _____
Cash flows from financing activities
Share capital introduced 138,223,869 42,055,719
Share issue costs (10,034,864) (1,622,739)
_____ _____
Net cash from financing activities 128,189,005 40,432,980
_____ _____
Net increase in cash and cash equivalents 72,182,483 24,573,605
_____ _____
Cash and cash equivalents at beginning of 24,573,605 -
year _____ _____
Cash and cash equivalents at end of year 96,756,088 24,573,605
(period) _____ _____
Notes to the preliminary results for the year ended 31 December 2006
Accounting policies and basis of preparation
Uramin Inc is registered and domiciled in the British Virgin Islands. The
financial statements incorporate the principle accounting policies set out below
and are consistent with those adopted in the previous financial period.
Basis of preparation
The financial statements have been prepared in US dollars under the historical
cost convention and in accordance with International Financial Reporting
Standards as endorsed by the EU. The following principal accounting policies
have been applied:
Basis of consolidation
Where the company has the power, either directly or indirectly, to govern the
financial and operating policies of another entity or business so as to obtain
benefits from its activities, it is classified as a subsidiary. The consolidated
financial statements present the results of the company and its subsidiaries ("
the group") as if they formed a single entity. Intercompany transactions and
balances between group companies are therefore eliminated in full.
Basic loss per share
The loss per ordinary shares has been calculated using the weighted average
number of shares in issue during the period. The weighted average number of
ordinary shares in issue in the period was 160,139,335 (31 December 2005 -
88,072,480) and the loss, being the loss after tax, was $23,783,011 (31 December
2005 - $2,882,939)
Due to the losses incurred during the period a diluted loss per share has not
been calculated as this would serve to reduce the basic loss per share.
Group
Year ended 31 10 month period
December ended 31 December
2006 2005
$ $
Loss for the year (23,783,011) (2,882,939)
Weighted average share in issue 160,139,335 88,072,480
_____ _____
Loss per weighted average share in issue (14.9) (3.3)
(cents) _____ _____
Taxation on loss from ordinary activities
No taxation has been provided for the group for the year ended 31 December 2006.
A deferred tax asset has not been provided due to the uncertainty of when
losses will be utilised.
Segmental reporting
Segmental information is presented in respect of the Group's geographical and
operational segments. Segmental information, assets, liabilities, income and
expenses include items directly attributable to the segment that can be
allocated on a reasonable and consistent basis.
As the business is currently only involved in exploration only geographic
segments have been provided.
Year ended 31 December 2006 South Africa Namibia CAR Corporate Total
$ $ $ $ $
Finance income 21,306 9,132 - 2,032,830 2,063,268
Net loss (5,001,134) (3,943,321) (2,408,709) (12,429,847) (23,783,011)
Total non-current assets 9,004,425 461,710 7,173,786 35,639,994 52,279,915
Total liabilities 2,508,449 121,150 1,198,782 821,163 4,649,544
10 month period ended 31 South Africa Namibia CAR Corporate Total
December 2005 $ $ $ $ $
Finance income 8,177 342 - 212,439 220,958
Net (loss)/ profit 8,254 (380,339) - (2,510,854) (2,882,939)
Total non-current assets 1,113,958 210,886 - 15,565,321 16,890,165
Total liabilities 742,641 76,535 - 3,869,363 4,688,539
This information is provided by RNS
The company news service from the London Stock Exchange
END
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