Wednesday, Uranium producer Denison Mines Corp. (DNN, DML.TO) reported that it slipped to a loss in the third quarter, hurt by a plunge in revenues and a hefty impairment charge related to its mineral property investment in Zambia. Looking ahead for the full year, the company provided production guidance for uranium and vanadium.
Toronto, Canada-based Denison reported net loss of US$91.3 million for the third quarter, compared with net profit of US$0.3 million for the year-ago third quarter. On a per share basis, the company reported a loss of US$0.27 per share, while it broke even last year.
Denison noted that it recorded a non-cash impairment charge of US$100.0 million against its mineral property investment in Zambia, sending third quarter loss from operations to a wider US$105.66 million from US$10.63 million last year.
Revenue for the quarter declined to US$12.7 million from US$36.5 million in the previous year quarter. While Canada mining operations contributed lesser to revenues at US$5.66 million than US$10.14 million last year, U.S. mining contributed US$2.7 million, down from US$24.49 million last year.
Uranium sales totaled 128,000 pounds at an average price of US$54.82 per pound, while Vanadium sales totaled US$0.8 million.
Uranium sales revenue for the third quarter declined to US$7.49 million from US$34.6 million last year, led by lower volumes in the U.S. and Canadian operations, further offset by lower realized prices compared with year-ago.
Revenue from the environmental services division, however, increased to US$4.05 million from US$1.43 million, on increased activity related to the company's contract at the FARO mine site in Yukon signed in late 2008.
Total expenses for the July-September period escalated to US$118.41 million from US$47.11 million, despite lower operating expenses at US$11.07 million compared with US$34.45 million last year, on the heavy mineral property impairment charges. This impairment charge also resulted in a future tax recovery of US$30.0 million, added the company.
For the nine months, the company reported a wider loss at US$110.89 million or US$0.41 per share, compared with US$23.89 million or US$0.13 per share last year. Total revenue fell sharply to US$48.12 million from US$86.38 million reported for the same nine-month period one-year ago.
Looking ahead for the full year, the company expects to sell 1.2 to 1.3 million pounds of Uranium including 500,000 to 600,000 pounds from the U.S. production. It also anticipates selling 975,000 pounds of vanadium.
DNN last traded on Wednesday at US$1.5475, up US$0.0275 or 1.81% on the AMEX. However, in the after hours, the stock dropped US$0.03 or 1.78% to trade at US$1.52.
DML.TO closed Wednesday's regular trading session at C$1.62, up C$0.02 or 1.25% on Toronto Stock Exchange.
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