The second quarter of 2014 featured further increased levels of product sales at 208,000 pounds U3O8. The product was sold to customer(s) under contractual terms at an average price of
During the six months ended
Production levels and costs (after adjustments for severance and ad valorem taxes as mentioned) along with sales figures for the
Year to date2
Cash cost per pound captured
Non-cash cost per pound captured
Wellfield cash cost 3
Wellfield non-cash cost3
Pounds packaged in drums
Cash cost per pound drummed
Non-cash cost per pound drummed
Plant cash cost 4
Plant non-cash cost4
Pounds shipped to conversion facility
Cash cost per pound shipped
Distribution cost 5
Average realized spot price 6
Average realized long-term contract price
Average realized price
Delivered by third party under assignment agreement
Cash cost per pound sold
Non-cash cost per pound sold
Total cost per pound sold
Cost of sales 7
The cash costs for the second quarter represent the actual costs for the quarter under the corrected treatment of severance and ad valorem taxes and do not reflect the out of period adjustments.
Year to date amounts have been adjusted to include effects of out of period (2013) adjustments.
Wellfield costs include all wellfield operating costs, severance and ad valorem taxes plus amortization of the related mineral property acquisition costs and depreciation of the related asset retirement obligation costs. Wellfield construction and development costs, which include wellfield drilling, header houses, pipelines, power lines, roads, fences and disposal wells, are treated as development expense and are not included in wellfield operating costs.
Plant costs include all plant operating costs, site overhead costs and depreciation of the related plant construction and asset retirement obligation costs.
Distribution costs include all shipping costs and costs charged by the conversion facility for weighing, sampling, assaying and storing the U3O8 prior to sale. There are no non-cash costs associated with distribution.
There were no spot sales in the six months ended
Cost of sales include all production costs (notes 1, 2 and 3) adjusted for changes in inventory values.
Cash cost per pound and non-cash cost per pound for produced and sold U3O8 presented in the table above are non-US GAAP measures. These measures do not have a standardized meaning or a consistent basis of calculation under US GAAP. These measures are used to assess business performance and may be used by certain investors to evaluate the Company's extraction and processing performance. To facilitate a better understanding of these measures, the table below presents a reconciliation of these measures to the financial results as presented in our financial statements.
Sales per the statement of operations include revenue from sources other than the sale of U3O8. The sales footnotes in the financial statements separate the U3O8 sales from other revenues.
Average Price Realized Per Pound Reconciliation
Year to date
U3O8 Sales (a) 1
Pounds sold (b)
Average price realized per pound (a ÷ b)
Note: 1 Gross sales amounts are used for all periods. Does not include
Cost Per Pound Sold Reconciliation
Year to date
Out of period adjustment
Cost of sales (a)
Pounds sold (b)
Cost per pound sold (a ÷ b)
The table above reflects both the cash and non-cash costs identified above which are combined as cost of sales in the statement of operations included in this filing. Overall, costs of sales per pound were higher in Q2 2014 due to the decrease in production necessitated by the remediation of the water disposal issue as well as the inclusion of the severance and ad valorem taxes and adjustments incurred during the quarter. As many of our costs are fixed, a lower production level will result in a higher cost per pound. We would expect to see the cost per pound decrease as production sales levels stabilize.
Operating costs including exploration, evaluation, development and administrative expenses for the quarter were
Interest expense of
Production rates at Lost Creek were deliberately controlled at levels that allowed us to fulfill our contractual sales requirements through
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Cautionary Note Regarding Forward-Looking Information
This release may contain "forward-looking statements" within the meaning of applicable securities laws regarding events or conditions that may occur in the future (e.g., timing and results of continuing commissioning efforts at the Lost Creek facility; ability to timely deliver into existing contractual obligations and possibly make spot sales; whether production costs continue to decrease as production rates continue to ramp up and are stabilized) and are based on current expectations that, while considered reasonable by management at this time, inherently involve a number of significant business, economic and competitive risks, uncertainties and contingencies. Factors that could cause actual results to differ materially from any forward-looking statements include, but are not limited to, capital and other costs varying significantly from estimates; failure to establish estimated resources and reserves; the grade and recovery of ore which is mined varying from estimates; production rates, methods and amounts varying from estimates; delays in obtaining or failures to obtain required governmental, environmental or other project approvals; inflation; changes in exchange rates; fluctuations in commodity prices; delays in development and other factors described in the public filings made by the Company at www.sedar.com and www.sec.gov. Readers should not place undue reliance on forward-looking statements. The forward-looking statements contained herein are based on the beliefs, expectations and opinions of management as of the date hereof and
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