<PAGE> 1
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
-------------------------------
For the month of March, 1999
International Uranium Corporation
(Translation of registrant's name into English)
Independence Plaza, Suite 950, 1050 Seventeenth Street, Denver, CO 80265
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
--- ---
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
--- ---
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82- ________________.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
International Uranium Corporation
---------------------------------
(Registrant)
Date: March 2, 1999 By: /s/ Earl E. Hoellen
-------------- ------------------------------
Earl E. Hoellen, President
<PAGE> 2
INTERNATIONAL URANIUM 1999 FIRST QUARTER RESULTS
MARCH 1, 1999 (IUC - TSE) ... INTERNATIONAL URANIUM CORPORATION (the "Company")
is pleased to announce net income of $739,411 for the first fiscal quarter of
1999, or approximately $0.01 per share (Cdn$0.02 per share). The Company
continues to enjoy a strong financial position, with net working capital of
$20,428,589, or $0.31 per share (Cdn$0.47 per share).
Gross revenue from the sale of uranium in the quarter totaled $7,520,450 with a
corresponding cost of material delivered of $6,415,348 resulting in gross
profits from uranium sales of $1,105,102. This compares to total uranium sales
in the first quarter of last year of $14,542,800 at a cost of $13,659,523
resulting in gross profit of $883,277. While the quantity of uranium sold during
the first quarter of 1999 was 52% less than the amount sold during the same
period last year, the Company acquired and produced the material for these
deliveries at less cost than last year and thus gross profits from uranium sales
increased.
During the first quarter, the Company received and successfully processed
approximately 26,000 tons of uranium-bearing soil materials excavated from a
former government defense site near Buffalo, New York. Another 16,000 tons will
be processed by the end of February, 1999. This marked the first time the
Company had recycled this type of material through its White Mesa Mill (the
"Mill"). These former defense sites are being remediated by the U.S. Army Corps
of Engineers (the "Corps") under the Formerly Utilized Sites Remedial Action
Program ("FUSRAP"). The Corps, which has been charged with the task of reducing
the cost of the clean up of these FUSRAP sites, awarded a contract to the
Company to recycle these materials from the Buffalo site and recover uranium
before disposing of the resulting byproduct in the Mill's tailings cells. By
doing so, the Corps estimates that it will save 75% of the cost that would have
been incurred if the materials were directly disposed of in a disposal-only
facility. There are potentially millions of tons of uranium-bearing soils and
materials located at these FUSRAP sites. The Company, which receives a recycling
fee in addition to the uranium recovered from processing these materials,
believes that the processing of these materials through the Mill will be a major
contributor to the Company's earnings in the future.
In addition to the pursuit of FUSRAP alternate feeds, the Company continues to
develop other commercial sources of uranium-bearing materials to process through
the Mill and is developing a potential backlog of future business. To this end,
the Company began receiving deliveries of alternate feeds from another uranium
processor in January under a long term processing arrangement. Assuming
deliveries meet expectations, the Company anticipates processing these materials
immediately after completion of the Buffalo FUSRAP materials, which should
result in the recovery of uranium at costs below current market levels.
The Company also continued to produce uranium/vanadium ore from its Sunday Mine
Complex during the quarter. At the present time, the Company anticipates
continuing its mining operations through the conventional ore run, which is
scheduled to begin in May and run through the end of the fiscal year.
The Company also continued with its ore purchase program during the quarter,
although the results of this program have been quite disappointing. Many of the
mines that had originally intended to initiate operations ultimately did not do
so, primarily because of increased costs due to regulatory requirements and weak
commodity prices. Weak market prices also resulted in the Company's decision to
discontinue development of its Topaz Mine during the period, as well as
discontinue mining operations at the Rim Mine. The Company will continue to
evaluate market conditions and could restart these operations if warranted, or
curtail operations at the Sunday Complex if market conditions do not improve or
mining costs increase. As of the end of the quarter, the Company had
<PAGE> 3
mined and stockpiled 58,000 tons of ore, containing 260,000 pounds of U3O8 and
1.5 million pounds of V2O5.
As noted above, the Mill will be completing the processing of the FUSRAP
materials and initiating the processing of the next alternate feed run during
the second fiscal quarter. The FUSRAP run will generate processing fees in
addition to the production of uranium. However, the next alternate feed run will
only result in the production of uranium, albeit at costs below market prices.
Since the Company does not anticipate any deliveries of uranium during the
second quarter, and with limited processing fees expected, the Company is not
anticipating a profitable second quarter.
Headquartered in Denver, Colorado, IUC is engaged in the business of producing
uranium concentrates from mined ores and waste byproducts, and the selling and
trading of these concentrates in the international nuclear fuel market. In
addition, IUC also produces and sells vanadium as well as other metals that can
be produced as a co-product with uranium.
ON BEHALF OF THE BOARD
"Earl E. Hoellen"
President
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
International Uranium Corporation wishes to caution readers that disclosures
made in the foregoing which are not historical facts are forward-looking
statements that involve risks, uncertainties and other factors that could cause
actual results to differ materially from those expressed or implied by such
forward-looking statements. Such factors include, but are not limited to,
volatility and sensitivity to market prices for uranium and vanadium,
competition, environmental regulations, the impact of changes in foreign
currencies' exchange rates, political risk arising from operating in Mongolia,
changes in government regulation and policies including trade laws and policies,
demand for nuclear power, dependence on a limited number of customers,
replacement of reserves and production, receipt of permits and approvals from
governmental authorities (including amendments for each alternate feed
transaction) and other operating and development risks. As a result of the
foregoing and other factors, no assurance can be given as to the future results,
levels of activity and achievement.
<PAGE> 4
REPORT TO SHAREHOLDERS
International Uranium Corporation (the "Company") is pleased to report net
income of $739,411 for the first fiscal quarter of 1999, or approximately $0.01
per share (Cdn$0.02 per share). The Company continues to enjoy a strong
financial position, with net working capital of $20,428,589, or $0.31 per share
(Cdn$0.47 per share). Details on the Company's financial performance are
discussed below.
The first quarter was highlighted by the achievement of a significant milestone
in the Company's development of its alternate feed processing activities.
Alternate feeds are uranium-bearing materials other than natural ores, and are
often considered to be wastes by the generators of the material. Previously, the
Company had successfully recycled alternate feeds from commercial nuclear fuel
cycle facilities and other metals processing operations. During the first
quarter, the Company received and successfully processed approximately 26,000
tons of uranium-bearing soil materials excavated from a former government
defense site near Buffalo, New York. Another 16,000 tons will be processed by
the end of February 1999. This marked the first time the Company had recycled
this type of material through its White Mesa Mill (the "Mill"). These former
defense sites are being remediated by the U.S. Army Corps of Engineers (the
"Corps") under the Formerly Utilized Sites Remedial Action Program ("FUSRAP").
The Corps, which has been charged with the task of reducing the cost of the
clean up of these FUSRAP sites, awarded a contract to the Company to recycle
these materials from the Buffalo site and recover uranium before disposing of
the resulting byproduct in the Mill's tailings cells. By doing so, the Corps
estimates that it will save 75% of the cost that would have been incurred if the
materials were directly disposed of in a disposal-only facility. There are
potentially millions of tons of uranium-bearing soils and materials located at
these FUSRAP sites. The Company, which receives a recycling fee in addition to
the uranium recovered from processing these materials, believes that the
processing of these materials through the Mill will be a major contributor to
the Company's earnings in the future.
In addition to the pursuit of FUSRAP alternate feeds, the Company continues to
develop other commercial sources of uranium-bearing materials to process through
the Mill and is developing a backlog of future business. To this end, the
Company began receiving deliveries of alternate feeds from another uranium
processor in January under a long term processing arrangement. Assuming
deliveries meet expectations, the Company anticipates processing these materials
immediately after completion of the Buffalo FUSRAP materials, which should
result in the recovery of uranium at costs below current market levels. The
Company remains optimistic that it will be successful in negotiating new
agreements with suppliers of alternate feeds, although considerable personnel
and outside legal resources will continue to be required in order to do so.
In addition to the alternate feed processing activities noted above, Mill
personnel were also involved during the quarter in minor capital and routine
maintenance projects. These projects are generally needed to improve operating
efficiencies associated with the conventional ore processing circuit,
particularly those associated with the vanadium recovery circuit. After
completion of these improvements during the second quarter, the
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Mill will be in a position to process the Company's conventional ores that are
being stockpiled at the Mill. Future market prices, the amount of conventional
or alternate feeds available and other operating factors will determine when the
conventional ore run will begin. However, the Company presently expects to
commence uranium and vanadium production sometime in May.
The Company also continued to produce uranium/vanadium ore from its Sunday Mine
Complex during the quarter. At the present time, the Company anticipates
continuing its mining operations through the conventional ore run, which is
scheduled to begin in May and run through the end of the fiscal year. The
Company also continued with its ore purchase program during the quarter,
although the results of this program have been quite disappointing. Many of the
mines that had originally intended to initiate operations ultimately did not do
so, primarily because of increased costs due to regulatory requirements and weak
commodity prices. Weak market prices also resulted in the Company's decision to
discontinue development of its Topaz Mine during the period, as well as
discontinue mining operations at the Rim Mine. The Company will continue to
evaluate market conditions and could restart these operations if warranted, or
curtail operations at the Sunday Complex if market conditions do not improve or
mining costs increase. As of the end of the quarter, the Company had mined and
stockpiled 58,000 tons of ore, containing 260,000 pounds of U3O8 and 1.5 million
pounds of V2O5.
The Gurvan Saihan Joint Venture, the Company's Mongolian uranium exploration
enterprise, completed its 1998 field season in October. During the year, the
Joint Venture completed 53,000 meters of exploration and resource delineation
drilling which resulted in the addition of 5.5 million pounds of U3O8 to the
uranium deposit discovered at Hairhan in 1997. The Hairhan deposit now has over
16 million pounds, with total resources on Joint Venture lands of over 23
million pounds U3O8. The Joint Venture also successfully completed a leach
amenability test that is a precursor to a full scale pilot plant operation. The
Joint Venture expects to conduct limited exploration work during 1999, primarily
because of weak market prices. Efforts will be focused on data analysis and
production cost modeling for future mining operations.
The uranium spot market suffered through a weak quarter as prices declined from
$9.75 per pound U3O8 to $8.75 per pound by the end of December, on very little
demand. However, several large uranium producers announced production cutbacks
and/or new project deferrals in December which had a positive effect on prices.
By the end of January, uranium prices had rebounded to $10.50 per pound U3O8. As
a result of these production cutbacks and anticipation of a commercial sales
arrangement with Russia for its HEU feed, several market analysts are predicting
prices above $12 per pound U3O8 by the end of the year. The vanadium market also
deteriorated during the quarter as prices fell to $2.80 per pound V2O5 in
December from $5.70 per pound at the start of the quarter. However, the vanadium
price also recovered slightly by January to the $3.00 per pound level, with most
analysts expecting an average price for 1999 of $3.50 per pound V2O5. The sales
value of the Company's ore stockpiles is dependent upon these future commodity
prices, particularly the spot V2O5 price, since the stockpiles contain
approximately six pounds of vanadium for every one pound of uranium.
<PAGE> 6
As noted above, the Mill will be completing the processing of the FUSRAP
materials and initiating the processing of the next alternate feed run during
the second fiscal quarter. The FUSRAP run will generate processing fees in
addition to the production of uranium. However, the next alternate feed run will
only result in the production of uranium, albeit at costs below market prices,
that will be booked to inventory at cost. Since the Company does not anticipate
any sales of uranium during the second quarter, and with limited processing fees
expected, the Company is not anticipating a profitable second quarter.
FINANCIAL REVIEW
Gross revenue from the sale of uranium in the quarter totaled $7,520,450 with a
corresponding cost of material delivered of $6,415,348 resulting in gross
profits from uranium sales of $1,105,102. This compares to total uranium sales
in the first quarter of last year of $14,542,800 at a cost of $13,659,523
resulting in gross profit of $883,277. While the quantity of uranium sold during
the first quarter of 1999 was 52% less than the amount sold during the same
period last year, the Company acquired and produced the material for these
deliveries at less cost than last year and thus gross profits from uranium sales
increased.
Process milling revenue was $2,724,185 this quarter with processing costs of
$1,655,722 resulting in a gross process milling profit of $1,068,463. This
amount is slightly less than last year's gross milling profit of $1,129,102,
which was derived from revenues of $3,637,721 and corresponding processing costs
of $2,508,619. Note that this quarters processing run involved material that was
substantially less complex and therefore less expensive to process than the
alternate feed processed over the same period last year. Thus, the Company's
costs and corresponding revenue were less this year although the gross profit
amounts are similar.
Selling, general and administrative costs increased to $967,369 from $679,858
over the same period last year due to increases in personnel, and outside legal
expenditures relating to regulatory requirements associated with our expansion
of the alternate feed business. Depreciation expense this quarter totaled
$223,781, compared to last year's amount of $35,383; while net interest and
other income was $234,993, a decrease of $89,870 from last years income of
$324,863.
Although total gross profits from uranium and process milling activities were
approximately $161,000 more this quarter than the same period last year,
increases in administrative costs and depreciation coupled with decreases in net
interest income resulted in a decrease in net income before taxes to $1,217,408
compared to last year's amount of $1,622,001.
Net income for the quarter, after a tax provision of $477,997, was $739,411.
<PAGE> 7
The Company's investment in property, plant and equipment totaled $448,912 for
the quarter, which was approximately 59% less than the amount expended over the
same period last year due primarily to fewer capital improvements and
modifications to the Mill. Expenditures in Mongolia for the period were
$504,867, which were slightly less than last year.
Net working capital remains strong at $20,428,589 of which $3,514,991 was made
up of cash and cash equivalents. Accounts receivable at December 31, 1998 were
$9,145,972, which were received under normal terms in January. The Company
continues to maintain liquidity and a strong cash position even though the
uranium and vanadium markets have been weak.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
International Uranium Corporation wishes to caution readers that disclosures
made in the foregoing Report to Shareholders which are not historical facts are
forward-looking statements that involve risks, uncertainties and other factors
that could cause actual results to differ materially from those expressed or
implied by such forward-looking statements. Such factors include, but are not
limited to, volatility and sensitivity to market prices for uranium and
vanadium, competition, environmental regulations, the impact of changes in
foreign currencies' exchange rates, political risk arising from operating in
Mongolia, changes in government regulation and policies including trade laws and
policies, demand for nuclear power, dependence on a limited number of customers,
replacement of reserves and production, receipt of permits and approvals from
governmental authorities (including amendments for each alternate feed
transaction) and other operating and development risks. As a result of the
foregoing and other factors, no assurance can be given as to the future results,
levels of activity and achievement.
<PAGE> 8
INTERNATIONAL URANIUM CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNITED STATES DOLLARS) (UNAUDITED)
<TABLE>
<CAPTION>
December 31, September 30,
1998 1998
------------ -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,514,991 $ 6,282,275
Marketable securities -- 11,731
Trade and other receivables 9,145,972 2,979,600
Inventories 10,139,510 12,481,713
Prepaid expenses and other 99,429 188,532
Favorable uranium sales contracts -- 729,730
----------- -----------
22,899,902 22,673,581
Properties, plant and equipment, net 13,621,708 13,516,937
Mongolia mineral properties 10,033,682 9,500,932
Notes receivable 203,262 203,538
Restricted marketable securities 8,247,066 8,300,375
Goodwill and other, net 593,077 575,351
=========== ===========
$55,598,697 $54,770,714
=========== ===========
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities $ 1,589,749 $ 1,761,841
Notes payable 32,255 37,963
Deferred revenue 379,112 575,611
Deferred income taxes 470,197 --
----------- -----------
2,471,313 2,375,415
Notes payable, net of current portion 46,846 54,172
Reclamation obligations 13,265,700 13,265,700
----------- -----------
15,783,859 15,695,287
----------- -----------
SHAREHOLDERS' EQUITY
Share capital 37,439,402 37,439,402
Retained earnings 2,375,436 1,636,025
----------- -----------
39,814,838 39,075,427
----------- -----------
$55,598,697 $54,770,714
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</TABLE>
On behalf of the Board
Earl E. Hoellen, Director Lukas H. Lundin, Director
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INTERNATIONAL URANIUM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
AND RETAINED EARNINGS
(UNITED STATES DOLLARS) (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
December 31, 1998 December 31, 1997
------------------ ------------------
<S> <C> <C>
OPERATIONS
Revenue
Uranium sales $ 7,520,450 $14,542,800
Process milling 2,724,185 3,637,721
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Total revenue 10,244,635 18,180,521
----------- -----------
Costs and expenses
Uranium cost of sales 6,415,348 13,659,523
Process milling expenditures 1,655,722 2,508,619
Selling, general and administrative 967,369 679,858
Depreciation 223,781 35,383
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9,262,220 16,883,383
----------- -----------
Operating income 982,415 1,297,138
Net interest and other income 234,993 324,863
----------- -----------
Net income before taxes 1,217,408 1,622,001
Provision for income taxes 477,997 389,342
----------- -----------
Net income for the period $ 739,411 $ 1,232,659
=========== ===========
Net income per common share $ 0.01 $ 0.02
=========== ===========
RETAINED EARNINGS
Retained earnings, beginning of period 1,636,025 18,694
Net income 739,411 1,232,659
----------- -----------
Retained earnings, end of period $ 2,375,436 $ 1,251,353
=========== ===========
</TABLE>
<PAGE> 10
INTERNATIONAL URANIUM CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNITED STATES DOLLARS) (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
December 31, 1998 December 31, 1997
------------------ ------------------
<S> <C> <C>
CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES
Net income for the period $ 739,411 $ 1,232,659
Items not affecting cash
Depreciation and amortization 223,781 35,383
Amortization of uranium sales contract purchase cost 729,730 1,270,270
Increase in deferred income taxes 470,197
(Decrease) increase in deferred revenue (196,499) 2,158,429
------------ ------------
1,966,620 4,696,741
Changes in non-cash working capital items
Decrease in marketable securities 11,731 7,510
Increase in trade and other receivables (6,166,373) (12,457,664)
Decrease in inventories 2,442,382 4,841,410
Decrease in other current assets 63,677 19,388
Decrease in liability for inventory purchases -- (5,050,000)
(Decrease) increase in other accounts payable and accrued
liabilities (172,089) 666,803
Decrease in due to related parties -- (113,990)
------------ ------------
Net cash used by operations (1,854,052) (7,389,802)
------------ ------------
INVESTING ACTIVITIES
Properties, plant and equipment (448,912) (1,100,846)
Mongolia mineral properties (504,867) (621,419)
Collection of notes receivable 276 2,404,429
Decrease (increase) in restricted marketable securities 53,310 (110,410)
------------ ------------
Net cash (used in) provided by investment activities (900,193) 571,754
------------ ------------
FINANCING ACTIVITIES
Decrease in notes payable (13,039) (6,123)
------------ ------------
Net cash used in financing activities (13,039) (6,123)
------------ ------------
Decrease in cash and cash equivalents (2,767,284) (6,824,171)
Cash and cash equivalents, beginning of period 6,282,275 13,953,355
------------ ------------
Cash and cash equivalents, end of period $ 3,514,991 $ 7,129,184
============ ============
</TABLE>
