ERA says uranium sector remains challening
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SYDNEY, Jan 31 AAP
January 31 2013, 6:52PM
ERA says the uranium market remains challenging, after the miner widened its annual net loss to $219 million amid declining world prices for the commodity for most of the year.
This compared with a net loss of $154 million for the year to December 2011.
No dividend was declared.
ERA reported that while the uranium market would remain challenging in the near term, the long-term outlook was still "very encouraging" for established producers.
At this time, ERA expects 2013 uranium production at its Ranger mine in the Northern Territory to be within the range of 2,700 tonnes to 3,300 tonnes, the company reported on Thursday.
Production of uranium oxide in 2012 was 3,710 tonnes compared to 2,641 tonnes in 2011.
ERA expects that sales of uranium oxide in 2013, combined with the repayment of outstanding uranium loans, to be broadly in line with production.
"In 2013, ERA will continue to reduce the costs of its operations to reflect expected production levels," it said.
"At the same time, the company will vigorously pursue the continued exploration of underground resources and development opportunities."
The latest net loss figure included a non-cash impairment charge of $68 million, which the board took in light of the uranium price outlook and strong Australian dollar, as well as costs associated with mine rehabilitation work.
In 2012, total costs were affected by the requirement to purchase a total of 501 tonnes of uranium oxide on the spot market.
The material was required to meet ERA's 2012 sales schedule following the record level of rainfall in December 2011 that prevented access to the high-grade ore at the bottom of the pit in early 2012.
A further contribution was the significant increase in non-cash costs and expenditure on construction of the Ranger 3 Deeps exploration decline at Ranger.
ERA on Thursday also reported that Peter McMahon had been appointed chairman following the resignation of Dr David Klingner.
Mr McMahon is also non-executive director and chairman of Ivanhoe Australia and before that was a senior executive of Rio Tinto for 30 years.