Neal Froneman, CEO Aflease Gold
Send this article to a friend
Print this page

» Lower output will delay payment of maiden dividend - Neal Froneman, CEO, Uranium One
» Uranium One cuts 2008 output 37%

» JSE:URANIUM ONE INC:
2988c 0%

Uranium One caned in Toronto
Marc Hasenfuss
Posted: Thu, 01 Nov 2007

[miningmx.com] -- URANIUM One, one of the most popular mining stocks amongst local investors in the last two years, endured a hectic trading session on the Toronto Stock Exchange (TSX) on Wednesday night with a massive 74.6 million shares changing hands.

The share trading down 17% to C$10.49 with the volume of shares traded on the TSX representing over 20% of Uranium One's issued share capital. This is by far the biggest volume seen on Uranium One since listing on the TSX.

If the number of shares traded in Uranium One on the TSX since October 9 is tallied (192 million) then more than 50% of Uranium One's share capital has effectively changed hands.

The sell-off followed an announcement by Uranium One on Tuesday evening detailing a downward revision in its production estimate for 2007 from 2.5 million pounds to approximately 2.1 million pounds. The company said this revision was mainly due to the extended autoclave commissioning period at the DominionReefs Uranium Mine plant in South Africa.

Miningmx speculated about the possibility of autoclave hitches in mid-October when observing nearly 45 million shares (more than 10% of the issued capital) changing hands on the Toronto Stock Exchange in just two days.

Uranium One said the first autoclave had now been commissioned and was operating at design throughput.

Shortages hurt

It added that the South Inkai uranium processing plant had begun production on schedule, but production targets had been adjusted due to a temporary shortage of sulphuric acid. This shortage was expected to only impact on uranium start-up projects.

Interestingly the production update was initially only located on the website for the Toronto Stock Exchange, where Uranium One has a primary listing. The press release was only published on the JSE's SENS system later on Wednesday.

Uranium One finished down 17% to R72.00 on the JSE on Wednesday with 250,000 shares changing hands.

Click Here to subscribe to our daily newsletter
Investment company RDC also lowered its target price for Uranium one on Wednesday from C$12 to C$9 and changed the company's rating from a "sector perform" to an "underperform".

RDC said it had anticipated some of the shortfalls, particularly in 2009 and 2010, but noted that the revised company forecasts were significantly lower in 2008. "Our revised forecasts remain lower than management guidance, but the difference is much less now than before. We think the revised forecasts are more achievable, but we are continuing to err on the side of conservatism."