March 31, 2008 / 1:11 PM / 10 years ago

Uranium One loss shrinks but warns on next quarter

TORONTO (Reuters) - Canadian miner Uranium One UUU.TO said on Monday its net loss narrowed in the fourth quarter as production ramped up at two key projects, but it said it expected a loss in the current quarter due an asset sale, which helped to depress its stock.

Uranium One lost $2.2 million, or 1 cent a share, in the quarter ended December 31, compared with a loss of $6.2 million, or 3 cents a share, in the same period a year earlier.

In the first quarter of 2008, the company said it will realize a $90-million accounting loss related to the sale of its stake in Aflease Gold AFOJ.J, announced last week.

“We are looking to sell noncore assets that at this stage is more to improve management focus, than intended to realize a lot more cash,” Jean Nortier, Uranium One’s interim chief executive, said on a conference call.

Also this quarter, Uranium One plans to install diesel generators at its Dominion uranium mine in South Africa, which is gripped in a power crisis, to ensure back-up power is available for underground operations during periods of load sharing.

The company did not refer to a recent report on mining industry Web site that said it planned to cut jobs at Dominion, which has been operating with reduced electricity and has also been hit by equipment breakdowns.

The company’s stock is down more than 50 percent this year. It fell another 46 Canadian cents, or 11.7 percent, to C$3.47 on Monday on the Toronto Stock Exchange.

Revenue in the fourth quarter was $61.0 million on the sale of 689,200 pounds of U3O8 uranium, up from $46.2 million in the year-before quarter.

The average realized price was $89 per pound.

Dominion, as well as the South Inkai mine in Kazakhstan, came on line last year. The two mines are producing uranium — the key ingredient for nuclear power — but haven’t reached commercial production levels yet, the company said.

Last month, Uranium One lowered its 2008 production forecast to 3.15 million pounds of uranium, and said its chief executive, Neal Froneman, had resigned.

($1=$1.03 Canadian)

Reporting by Jonathan Spicer; Editing by Peter Galloway

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