Uranium One Announces Industrial Production Approval for South Inkai
Uranium One Inc. announced that the Kazakh Ministry of Energy and Mineral Resources has formally approved the commencement of industrial production at South Inkai. The approval was given by way of an amendment to the South Inkai subsoil use agreement and permits the Company’s 70% owned Betpak Dala joint venture to ramp up production at the South Inkai Uranium Mine over the next three years to 5.2 million lbs U(3)O(8) per year.
As a result of the approval, commercial production for accounting purposes will now commence at South Inkai. The processing plant at South Inkai was completed earlier this year, and the first sale of South Inkai uranium production is expected to take place shortly. The revenue and associated expenses with the sale of South Inkai production will now be included in Uranium One’s consolidated statements of operations.
South Inkai is Uranium One’s second mine to enter into commercial production and at full capacity is expected to be twice the size of the Company’s Akdala Uranium Mine.
As previously announced, Uranium One’s attributable production from South Inkai is expected to be 766,500 lbs U(3)O(8) for 2008. As of the end of November 2008, Uranium One’s year to date share of production from South Inkai was approximately 710,000 lbs U(3)O(8). Well field development is ahead of schedule and, in November, South Inkai received sufficient sulphuric acid to commence acidification of Block 4 at the operation.
Uranium One expects its attributable production from South Inkai to be 1.5 million lbs U(3)O(8) in 2009. The average cash cost per pound sold during 2009 at South Inkai is expected to be approximately US$28 per pound, but due to the continuing ramp up in production throughout the year, the cash cost per pound sold is expected to decline to approximately $20 per pound by the end of 2009.