* Takes $2.8 billion writedown on mines, properties
* Quarterly loss of $2 billion or $4.30 a share
* Stock down 3 Canadian cents at C$1.10 (Adds details, comments. 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.
“We will continue to reevaluate all expenditures in light of the rapidly changing economic environment in order to ensure that our liquidity objectives are met,” Uranium One’s chief executive, Jean Nortier, said on a conference call.
He said the company’s cash reserves were sufficient to continue to develop the company’s priority projects. The company had working capital of $142.6 million at Sept 30, including $98.9 million in cash.
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 Canadian company has assets in the United States, Australia, and South Africa, but has focused its efforts in Kazakhstan, which is home to a fifth of the world’s uranium reserves and boasts lower costs than other regions.
As recently as last summer, the company had visions of challenging Cameco Corp (CCO.TO) as the world’s top uranium producer within a few years, but a shortage of sulfuric acid in Kazakhstan forced the company to slash its output forecast last fall, while it also has struggled with operational troubles.
Dominion, which was to be the company’s flagship mine, was closed after the company said it would need to see a sustained rise in uranium prices and significant additional capital investment to make a go of it.
In Kazakhstan, new sulfuric acid production has eased the country’s shortage, but the company received less acid than it expected during the quarter due to transportation difficulties, Nortier said.
“We’ve been consistently saying that we see logistical issues as the major issue, production having largely been sorted out,” following the construction of a new acid plant near Balkhash, Kazakhstan, he said.
Sulfuric acid is the main chemical reagent for production or uranium by the on-site leaching method.
The company’s shares, which have fallen 87 percent this year, were down 3 Canadian cents at C$1.10 on the Toronto Stock Exchange on Friday afternoon.
Uranium sales totaled 848,100 pounds during 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 start-up of its Kharasan mine, also in Kazakhstan.
Output in 2009 is seen at 3.5 million pounds.
$1=$1.23 Canadian Reporting by Cameron French; Editing by Peter Galloway