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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 August 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- ________________.
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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: August 31, 1999 By: /s/ Earl E. Hoellen
--------------- -----------------------------------
Earl E. Hoellen, President
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Exhibit Index
<TABLE>
<CAPTION>
Exhibit No. Description
-----------
<S> <C>
99.1 Financial Statements dated June 30, 1999
99.2 Report to Shareholders dated June 30, 1999
</TABLE>
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EXHIBIT 99.1
INTERNATIONAL URANIUM CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNITED STATES DOLLARS)(UNAUDITED)
<TABLE>
<CAPTION>
June 30, 1999 September 30, 1998
------------- ------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,733,668 $ 6,282,275
Marketable securities -- 11,731
Trade and other receivables 329,916 2,979,600
Inventories 15,895,608 11,035,474
Supplies and prepaid expenses 1,879,378 1,634,771
Favorable uranium sales contracts -- 729,730
------------ ------------
21,838,570 22,673,581
Properties, plant and equipment, net 13,487,021 13,516,937
Mongolia mineral properties 10,389,624 9,500,932
Notes receivable 202,704 203,538
Restricted marketable securities 8,221,218 8,300,375
Goodwill and other, net 553,221 575,351
------------ ------------
$ 54,692,358 $ 54,770,714
============ ============
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities $ 2,512,594 $ 1,761,841
Notes payable 5,031,831 37,963
Deferred revenue -- 575,611
------------ ------------
7,544,425 2,375,415
Notes payable, net of current portion 30,932 54,172
Reclamation obligations 13,265,700 13,265,700
------------ ------------
20,841,057 15,695,287
------------ ------------
SHAREHOLDERS' EQUITY
Share capital 37,439,402 37,439,402
Retained earnings (3,588,101) 1,636,025
------------ ------------
33,851,301 39,075,427
------------ ------------
$ 54,692,358 $ 54,770,714
============ ============
</TABLE>
On behalf of the Board
Earl E. Hoellen, Director Lukas H. Lundin, Director
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EXHIBIT 99.1
INTERNATIONAL URANIUM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNITED STATES DOLLARS)(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
June 30 June 30
1999 1998
------------ ------------
<S> <C> <C>
OPERATIONS
Revenue
Uranium sales $ 7,520,450 $ 19,890,300
Process milling 4,288,515 10,519,705
------------ ------------
Total revenue 11,808,965 30,410,005
------------ ------------
Costs and expenses
Uranium cost of sales 6,417,348 17,880,753
Process milling expenditures 3,253,826 8,272,872
Selling, general and administrative 3,595,147 2,612,206
Depreciation 485,136 454,987
------------ ------------
13,751,457 29,220,818
------------ ------------
Operating income (loss) (1,942,492) 1,189,187
Write-down of ore stockpiles (3,460,000) --
Write-off mine development costs (452,042) --
Net interest and other income 630,558 1,007,475
------------ ------------
Net income (loss) before taxes (5,223,976) 2,196,662
Provision for income taxes 150 447,200
------------ ------------
Net income (loss) for the period $ (5,224,126) $ 1,749,462
============ ============
Net income (loss) per common share $ (0.08) $ 0.03
============ ============
RETAINED EARNINGS
Retained earnings, beginning of period 1,636,025 18,694
Net income (loss) (5,224,126) 1,749,462
------------ ------------
Retained earnings, end of period $ (3,588,101) $ 1,768,156
============ ============
</TABLE>
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EXHIBIT 99.1
INTERNATIONAL URANIUM CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNITED STATES DOLLARS)(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
June 30 June 30
1999 1998
------------ ------------
<S> <C> <C>
CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES
Net income (loss) for the period $ (5,224,126) $ 1,749,462
Items not affecting cash
Depreciation and amortization 485,136 454,987
Amortization of uranium sales contract purchase cost 729,730 1,270,270
Write-down of ore stockpiles 3,460,000 --
Write-off mine development costs 452,042 --
(Decrease) increase in deferred revenue (575,611) 1,294,337
Increase in deferred income taxes -- 133,875
------------ ------------
(672,829) 4,902,931
Changes in non-cash working capital items
Decrease in marketable securities 11,731 17,350
Decrease (increase) in trade and other receivables 2,649,684 (3,138,765)
Increase in inventories (7,659,026) (1,110,926)
Increase in supplies and prepaid expenses (260,849) (758,904)
Decrease in liability for inventory purchases -- (5,050,000)
Increase in other accounts payable and accrued liabilities 750,753 1,102,042
Decrease in due to related parties -- (150,398)
------------ ------------
Net cash used in operations (5,180,536) (4,186,670)
------------ ------------
INVESTING ACTIVITIES
Properties, plant and equipment (1,614,561) (3,047,916)
Mongolia mineral properties (804,126) (2,093,710)
Collection of notes receivable 834 4,793,721
Decrease (increase) in restricted marketable securities 79,157 (381,505)
------------ ------------
Net cash used in investment activities (2,338,696) (729,410)
------------ ------------
FINANCING ACTIVITIES
Increase (decrease) in notes payable 4,970,625 (8,371)
------------ ------------
Net cash provided by (used in) financing activities 4,970,625 (8,371)
------------ ------------
Decrease in cash and cash equivalents (2,548,607) (4,924,451)
Cash and cash equivalents, beginning of period 6,282,275 13,953,355
------------ ------------
Cash and cash equivalents, end of period $ 3,733,668 $ 9,028,904
============ ============
</TABLE>
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EXHIBIT 99.2
REPORT TO SHAREHOLDERS
International Uranium Corporation (the "Company") had a net loss of $5,224,126
through the first nine months of fiscal year 1999. Of this loss, approximately
$3.9 million was attributable to the write-down in the second quarter of the
Company's ore stockpiles and the costs associated with the suspension of mining
operations at the Company's Sunday Mine Complex in the third quarter. Details on
the Company's financial performance are discussed below.
Operational highlights for the third quarter included the successful completion
of two separate processing runs of alternate feed materials. Alternate feeds are
uranium-bearing materials other than natural ores generated by other private or
government entities. By the end of June, the Company had recovered approximately
160,000 pounds of U3O8 from an alternate feed supplied by a nuclear fuel cycle
company as a part of a multi-year contract. In addition, the Company
successfully completed the processing of over 44,000 tons of uranium-bearing
waste materials received from the Ashland 2 former defense site, near Buffalo,
New York. The Company received a recycling fee in addition to retaining the
uranium recovered from processing the Ashland 2 material. The U.S. Army Corps of
Engineers, which has responsibility for the Ashland 2 and other Formerly
Utilized Sites Remedial Action Program ("FUSRAP") sites, estimated that by
recycling these uranium-bearing wastes through the Company's White Mesa Mill
(the "Mill"), it avoided over $16 million of costs that would have been incurred
if the Ashland 2 materials were simply dumped at a disposal-only facility. Based
on the success of the Ashland 2 project, the Company signed a contract to
process materials from the Ashland 1 FUSRAP site, and began to receive these
materials in July. The Ashland 1 project could generate over 100,000 tons of
uranium-bearing materials for recycle through the Mill, for which the Company
will receive a recycling fee in addition to retaining all uranium recovered.
With the suspension of mining operations, the Company intends to devote its full
resources at this time to the further development of its alternate feed
business. There are substantial quantities of uranium-bearing waste materials
that can be successfully recycled through the Mill. Therefore, the Company
remains optimistic that it will be successful in the development of the
alternate feed business, although considerable personnel and outside legal
resources will continue to be required in order to do so.
The Company's decision to suspend mining operations at its Sunday Mine Complex
in early June was made as a result of continuing weak uranium and vanadium
prices and the expectation that these conditions will not improve for the next
few years. If these market conditions should improve, the Company could restart
these operations in a relatively short period of time.
At the conclusion of mining operations, the Company had produced and stockpiled
at the Mill approximately 84,000 tons of ore containing approximately 400,000
pounds of recoverable U3O8 and 2,300,000 pounds of recoverable V2O5. The Company
commenced the milling of this ore during June and anticipates the completion of
this
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conventional mill run by the end of October. Certain alternate feeds are also
being processed concurrently with the conventional ore.
The Company continued its licensing efforts for the Reno Creek in situ leach
project during the quarter. However, because of the expectation of continued
soft uranium prices, as well as an approximately 100% increase in Nuclear
Regulatory Commission licensing costs, the Company has decided to suspend
efforts to obtain a Source Material License for the Reno Creek project. The
Company could readily restart and complete these licensing efforts if market
conditions warranted. Also during the third quarter, the Gurvan Saihan Joint
Venture, the Company's uranium exploration and development project in Mongolia,
continued to conduct a limited field program, again focusing most of its efforts
on data analysis and production cost modeling for future mining operations.
By the end of the third quarter, uranium spot market prices had drifted downward
to $10.30 per pound U3O8 from the year's high of $10.85 per pound in March. This
price weakness occurred in spite of a near tripling of spot demand for the first
half of calendar 1999 to over 13 million pounds U3O8 compared to the same period
in 1998. While some market analysts are expecting the market to firm somewhat by
the end of the year, due to steadily increasing demand, most analysts believe
the uranium market will continue to drift sideways, with no appreciable and
sustainable price recovery for the foreseeable future. Market events included
the much anticipated antidumping investigation ruling by the International Trade
Commission ("ITC") regarding the effect of Kazakhstan uranium on the U.S.
market. In early July, the ITC in a unanimous 6-0 decision ruled that Kazakh
uranium had not caused injury to the U.S. production industry. As a result, the
antidumping investigation against Kazakh uranium was officially terminated,
paving the way for unrestricted access to the U.S. market. The impact to the
U.S. uranium market is expected to be minimal, however, as industry experts
believe that current supplies of uranium from Kazakhstan are not expected to
increase in any material way for the foreseeable future.
Vanadium spot prices remained relatively unchanged for the period, closing at
$2.10 per pound V2O5 on June 30, although a tightening of supply in the market
created a $0.05 to $0.10 per pound premium for prompt delivery. European
vanadium processors have extended planned summer shutdowns until the third
calendar quarter of 1999 in an effort to reduce inventories being held by end
users. This could result in the upward movement of prices for the second half of
calendar 1999 through increased market demand. The Company continues to be
sensitive to spot market prices and will evaluate the impact of vanadium sales
in the U.S. market and the overall decision of whether to liquidate inventories
at this time or hold its stock in anticipation of future higher prices.
FINANCIAL REVIEW
Total revenues for the nine-month period ending June 30, 1999, were $11,808,965.
Uranium sales were $7,520,450, while process milling fees relating to the
Company's alternate feed activities totaled $4,288,515. These revenues were
approximately 60% less than those realized over the same period last year when
the Company had uranium sales
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of $19,890,300 and process milling fees of $10,519,705, for total revenues of
$30,410,005.
The Company had no sales of uranium during the third fiscal quarter, thus the
quantity of uranium sold during the nine months ending June 30 remained at
550,000 pounds U3O8. This compares to 1,550,000 pounds U3O8 sold during the same
period last year. Gross profits from uranium sales in 1999 were also lower than
the same period last year, due primarily to lower realized sale prices. Gross
profits on uranium sales through the first nine months of 1999 were $1,103,102
versus $2,009,547 for 1998.
Gross profits from process milling (alternate feed) activities were $1,034,689
in 1999, compared to $2,246,833 in 1998. The principle alternate feed run in
1998 involved a complex uranium/tantalum feedstock that resulted in significant
processing fees being paid to the Company. To date, this year's alternate feed
runs have consisted of the processing of 44,000 tons of FUSRAP material, which
also resulted in the receipt of a recycling fee, and the processing of another
alternate feed source which resulted in the production of approximately 160,000
pounds of U3O8. The Company did not receive a recycling fee for the latter
alternate feed run; rather, revenues for this alternate feed will be recognized
as the uranium is sold in subsequent periods. This coupled with corresponding
standby and shutdown expenditures contributed to the Company's decrease in 1999
gross profits from processing activities.
Selling, general and administrative expenses for the nine-month period through
June 30, 1999, were $3,595,147. This was an increase of $982,941 from 1998
levels due to increases in personnel and outside legal costs relating to the
Company's development of the alternate feed business. However, the Company
expects these expenses to diminish somewhat in the future due to staff
reductions undertaken in conjunction with the suspension of mining operations.
The Company will continue to evaluate staffing levels and other administrative
costs in light of anticipated operations.
As a result of the write-down of the Company's ore stockpiles in the second
fiscal quarter and the charges associated with the suspension of mining
operations in the third fiscal quarter, in conjunction with the decrease in
recognized alternate feed profits, decreased profits from uranium sales, and
increases in selling and general administrative costs, the Company sustained a
net loss of $5,224,126 for the nine month period ending June 30,1999, compared
to a net profit of $1,749,462 for the corresponding period in 1998.
Through the third fiscal quarter, the Company has used $5,180,536 of cash from
operations compared to $4,186,670 used in operations during the same period last
year. This is due primarily to changes in inventory levels and changes in
liabilities for inventory purchases from the corresponding period last year.
Investment in properties, plant and equipment were $1,614,561 in 1999 compared
to $3,047,916 in 1998. Mongolia property investment has been reduced to $804,126
for the 1999 period from $2,093,710 in 1998. Net working capital as of June 30,
1999, was $14,294,145 of which $3,733,668 consisted of cash and cash
equivalents.
<PAGE> 4
During March 1999, in order to provide the Company with more short-term cash
flexibility, a $10,000,000 working capital loan agreement was established with
Norwest Bank. The one-year facility provides for advances based on applicable
receivable levels and finished goods inventories. As of June 30, 1999,
$5,000,000 was outstanding under this new facility.
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.
ON BEHALF OF THE BOARD
Earl E. Hoellen
President and Chief Executive Officer
August 24, 1999
