Uranium One down on lower production targets

Longer than expected commissioning times and an inability to secure sulphuric acid have conspired to force Uranium One (UUU-T) to downgrade its production targets for this year and next.

On Oct. 30 the news sent Uranium One shares down 2% or 22 to $12.73 on 6.6 million shares traded.

The company lowered its U₃0₈ production guidance for 2007 to 2.1 million lbs from 2.5 million.

It says the primary cause of the downgrade is the extra time needed to commission the autoclave at its Dominion Reefs uranium mine in South Africa. It reports, however, that the first autoclave has now been commissioned and is operating at design throughput.

Unfortunately for Uranium One, that doesnt mean it is out of the woods.

While its South Inkai uranium processing plant in Kazakhstan has begun production on schedule a shortage of sulphuric acid has forced it to downgrade production targets for 2008. Uranium One says the cause of the shortage is a delay in finishing a copper smelter in Kazakhstan

The lack of sulphuric acid means production targets for next year are down to 4.6 million lbs U₃0₈ from 7.4 million lbs U₃0₈, as the shortage will effect both South Inkai and its Kharasan uranium project which is also in Kazakhstan.

The company did maintain its production forecast for the Akdala Uranium mine at 1.8 million lbs U₃0₈ with operating cash costs of roughly US$10 per lb sold.

Pre-commercial production from Dominion Reefs Uranium is expected to be roughly 200,000 lbs U₃0₈ with pre-commercial production from South Inkai coming in at 60,000 lbs U₃0₈.

Uranium One owns 70% of Akdala in Kazakhstan, and is developing the South Inkai and Kharasan projects in the country. On top of Dominion Reefs it also owns the Honeymoon uranium project in South Australia uranium properties in the U.S. and Canada.