St. LOUIS () -- UrAsia Energy [TSXv:UUU; AIM:UUU] has signed a five-year agreement with an unnamed North American nuclear utility to sell 4 million pounds of uranium from its Betpak Dala Joint Venture in Kazakhstan. With the uranium price holding at $72/lb, UrAsia stands to reap the benefits.
"This latest agreement, with a prominent member of the nuclear community, represents an important step in establishing UrAsia as a major supplier in the uranium industry," said UrAsia President and CEO Phillip Shirvington in a statement.
The five-year deal is for the sale of 4 million pounds of uranium with deliverable quantities ranging from 250,000-1,000,000 pounds per year. The contract also includes market related pricing terms with floor price protection in case the uranium price falls.
UrAsia's existing contracts with utilities represent the sale of 100% of Akdala's annual production for 2007, as well as a portion of projected production through to 2011. More than 50% of the company's sales contracts include floor price protection.
Betpak Dala JV
The Betpak Dala JV contains the Akdala deposit and the South Inkai project, located in the Suzak region of the South Kazakhstan Oblast, approximately 240-250 kilometres from Shymkent, Kazakhstan.
UrAsia hold a 70% interest in the JV while Kazakhstan's national atomic company Kazatomprom holds the remaining 30%.
The Akdala deposit is in close proximity to the Eastern Mynkuduk and Uvanas operating uranium mines owned by Kazatomprom. Eastern Mynkuduk hosts 22,000 tonnes of uranium, while Uvanas has about 8,000 tonnes of reserves.
Proven and Probable Reserves at the Akdala uranium mine as of June 30, 2005 were 18,772,000 at a grade of 0.057% U3O8 of which 4,312,000 tonnes at 0.057% U3O8 are proven.
The company believes there is the potential of establishing additional measured and indicated resources of 12 million to 13 million tonnes at a grade of 0.04% to 0.06% containing 5,000 to 8,000 tonnes U3O8.
 |
The mine commenced official production in January 2004 and reported extraction of 644.9 tonnes during 2004. As of April 2006, Akdala has been producing at an annualized rate of 2.6 million pounds (955 tonnes) U3O8 per annum. Operating costs are about $4.85 per pound of U3O8.
This company's production rate is set to increase over the coming decade as UrAsia and its Kazakh partners embark on the accelerated development and construction of the South Inkai and Kharassan projects. Initial uranium production for South Inkai is scheduled for the end of 2007.
South Inkai deposit is in proximity to Cameco's [NYSE:CCJ; TSX:CCO] Inkai JV, which has total reserves of 114 million pounds of U3O8 and produced about 800,000 pounds last year, but expected to total 5.2 million pounds by 2010.
As of February 11, 2005, South Inkai's Inferred Resources are calculated to be 32,709,000 tonnes at a grade of 0.043% uranium containing 14,068 tonnes. The company plans to develop the mine on the basis of an annual production rate of 600 tonnes with the potential to increase that rate to 1,000 tonnes.
In addition to Akdala and South Inkai, the company has indirect interests in the Kharassan (30%) development projects in Kazakhstan and an extensive portfolio of exploration properties in the Kyrgyz Republic.
Kazakhstan Production
Kazakhstan has been an important source of uranium for more than 50 years and is currently the third-largest producer in the world.
According to World Nuclear Associations (WNA), Kazakhstan has 19% of the world's uranium resources, which is around 1.5 million tonnes. From 2001-2005, uranium production rose from 2,000 to 4,357 tonnes per year.
Some 50 uranium deposits are known in six provinces: Northern province, Balkash province, Ili province, Caspian province, Chu-Sarysu province and Syrdarya province.
Source: Kazatomprom
Further mine development is expected to boost annual production to 15,000 tonnes by 2010, according to the WNA.
Share Price Activity
 |
UrAsia stock is up 16 cents today at C$5.09 on TSXv. Shares gained 150% last year, starting at $2.17 and ending at C$5.37. ( to see comparison of piers.)
On November 8, 2005, UrAsia debuted on Canada's TSX Venture Exchange at C$1.74 and became the fourth publicly traded uranium producer in the world. Since then, the company's stock is up almost 200%.
"The company is extremely pleased with the reception it has received in the North American market," said Shirvington in the release.
The spot uranium price is currently at $72/lb, up 100% from the start of last year.
