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Uranium One takes $2bn impairment hit Posted: Fri, 14 Nov 2008 [miningmx.com] -- URANIUM ONE has taken a net impairment charge of US$2bn in its accounts for the quarter ended September and has made further sweeping revisions to its production forecasts for this year and next. The main item in the impairment charge concerns the Dominion mine in South Africa which was closed on October 22, forcing Uranium One to take a write-down of $1.8bn (about R18bn). Uranium One has also taken a $700m impairment charge against its United States exploration properties and a further $100m charge against its Hobson, La Palangana and Shootaring Canyon Mill properties. Finally, there was a $200m charge against the Honeymoon mine in South Australia and the group’s Australian exploration assets. In total, the write-downs amounted to US$2.8bn against which management offset a “reduction in future income tax liabilities” of $800m. That’s not the end of it for Dominion, because there’s also a $238.5m foreign exchange loss which will only be brought to account if the mine is sold. Uranium One CEO Jean Nortier estimated the costs of putting Dominion on care and maintenance at $32m, and ongoing maintenance costs at $12m annually thereafter. Nortier also announced further reductions to Uranium One’s attributable production estimates, which have forced the company to borrow 200,000 pounds (lb) of U3O8. The borrowed concentrates must be repaid on September 30 2010 and loan fees of 3.5% are payable annually on the value of the borrowed U308. Nortier said Uranium One would produce 2.8m lb of U3O8 this year instead of the previously revised figure of 3.1m lb, because of the decision to close Dominion as well as problems with two of the group’s Kazakhstan operations. Production from South Inkai was lower than expected owing to reduced sulphuric acid deliveries, while pilot production from Kharasan had started up later than expected. Click Here to subscribe to our daily newsletter
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