November 14, 2008 / 4:06 PM / 10 years ago

Uranium One takes $2 bln loss on writedowns

(In U.S. dollars, unless noted)

TORONTO, Nov 14 (Reuters) - Uranium One UUU.TO posted a massive $2 billion loss in the third quarter as the miner wrote down the value of property and equipment, and said it would focus on developing its lower-cost assets in Kazakhstan.

The Canadian company said it would take a $2.8 billion writedown, mostly to reflect the lower value of its U.S. exploration properties and its Dominion mine in South Africa, which it shut in October due to falling uranium prices.

“Recent disruptions in global credit and financial markets have resulted in a deteriorating economic climate, which led to the asset impairments outlined above,” the company said in a statement.

Uranium One lost $2 billion, or $4.30 a share, in the quarter, compared with a loss of $17.3 million, or 4 cents a share, in the year-before period.

The company’s shares, which have fallen 87 percent this year, were down 1 Canadian cent at C$1.12 on the Toronto Stock Exchange.

The company sold 848,100 pounds of uranium in the quarter, up from 70,000 pounds a year before. Total production in the quarter was 704,600 pounds, up from 538,400.

Realized uranium prices dropped to $67 a pound from $115.

Uranium One cut its 2008 production estimate to 2.8 million pounds from 3.1 million pounds due to the Dominion mine closure, as well as lower than expected output from its South Inkai mine in Kazakhstan and the later startup of its Kharasan mine, also in Kazakhstan.

$1=$1.22 Canadian Reporting by Cameron French; editing by Rob Wilson

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