ERA Downgrades 2010 Output Guidance; Says Profit Will Be Hit
October 12 2010 - 7:50PM
Dow Jones News
Energy Resources of Australia Ltd. (ERA.AU) on Wednesday
downgraded its annual uranium oxide production guidance for the
second time this year and said the shortfall means it will have to
cover some supply requirements with purchases.
The uranium miner said the fall in production volumes, caused by
lower-than-expected ore grades, will adversely impact its 2010 full
year earnings.
Output for the three months to Sept. 30 was 911 metric tons,
down 35% from a year earlier but up 10% from the June quarter.
"Mill head grade has improved compared with the June 2010 quarter
but remains significantly below 2009 levels," ERA said in a
statement.
ERA, 68%-owned by Rio Tinto Ltd. (RIO.AU), cut its annual
production forecast to 3,900 tons, from previous guidance of
4,300-4,700 tons, meaning it will fall well short of supply
requirements of 5,000 tons.
Selling purchased product is expected to adversely impact ERA's
earnings because the small margin earned from selling purchased
material is more than offset by operation costs, the company
said.
-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692;
Ross.Kelly@dowjones.com
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