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ANNUAL REPORT 2010

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Skip Navigation LinksManagement Discussion and Analysis > Financial Review > Liquidity and Capital Resources

liquidity and capital resources

The Group’s principal source of liquidity as at 30 June 2010 is cash of US$348.8M (30 June 2009: US$66.2M). The cash is currently invested over a range of maturities with Australian banks with a minimum AA Standard & Poor’s credit rating.

The Group’s principal sources of cash for the year ended 30 June 2010 were uranium sales receipts, interest received from cash investments, proceeds from a share placement and drawdown of borrowings.

The remaining amount outstanding on the LHM project finance facilities amounted to US$47.5M.

For KM, the Group has financing facilities totalling US$167.0M, consisting of a six year Project Finance Facility of US$145M, a Standby Cost Overrun Facility of US$12M and a Performance Bond Facility of US$10M. At 30 June 2010, US$145M had been drawn. US$2M was available to be issued under the Performance Bond Facility and the Standby Costs Overrun Facility remains undrawn.

The following is a summary of the Group’s outstanding commitments as at 30 June 2010:

Payments due by periodTotal
US$M
Less than 1 yr
US$M
1 to 5yrs
US$M
5yrs+ or unknown
US$M
Tenements22.62.120.40.1
Mine construction35.735.7--
Operating leases6.71.34.50.9
Manyingee acquisition costs0.6--0.6
Total commitments65.639.124.91.6

In relation to the Manyingee Uranium Project, the acquisition terms provide for a payment of A$0.75M (US$0.6M) by the Company to the vendors when all project development approvals are obtained.

In addition to the outstanding commitments above, the Company acquired a call option on 19 June 1998 in relation to the purchase of the Oobagooma Uranium Project and, in turn, granted a put option to the original holder of the project. Both the call and put options have an exercise price of A$0.75M (US$0.6M) and are subject to the Western Australian Department of Minerals & Energy granting tenements comprising two exploration licence applications. The A$0.75M (US$0.6M) is payable by the Company within 10 business days of the later of the grant of the tenements or the exercise of either the call or put option. The options will expire three months after the date the tenements are granted.

The Company has no other material off balance sheet arrangements.