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Lower output will delay payment of maiden dividend - Neal Froneman, CEO, Uranium One
In an interview on Radio 2000 @ 18:00 on Wednesday, 31 October 2007
[miningmx.com] -- THE significant decrease in Uranium One's production target would affect the uranium price, said Uranium One president and CEO, Neal Froneman. It would also mean the company would pay its first dividend a year later than planned.
"My forecast for the uranium price is always driven by the supply/demand situation, and by how difficult it is to get a uranium mine to production," he said.
Speaking on the Moneyweb Power Hour, Froneman said the supply constraint was likely to continue owing to the global shortage of sulphuric acid. "This is an industry issue. There is potentially a shortage of acid worldwide and that will obviously have an impact on the price."
Uranium One said on Wednesday that it would cut its 2008 production forecast by up to 37% owing to commissioning problems at its operations in South Africa and Kazakhstan. "We don't have happy shareholders
at the moment but we are working on solutions. It's not really a big issue but markets tend to overeact on situations like these," said Froneman.
Uranium One shed 17% by the close of trade.
One of the solutions to deal with the sulphuric acid issue, which was the major one, was to import from other markets. "We can get the acid from other market but it's not easy there is a lot of red-tape involved," said Froneman. Commodities boom mainly drove the sulphuric acid shortage.
However, the cutback in production was not to have a long-term negative impact on the market. "It depends on how you look at it. It is obviously going to have impact next year, but if you take a long time view, it's no big deal,” said Froneman.
Meanwhile, Uranium One would be in a position to pay dividends in 2009.
"We don't have a dividend policy so we never really stated a date or said we would have paid dividends by this particular time.
"But we've always
thought we'd be in position to pay dividends in 2008, but that has shifted to 2009," said Froneman.
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