Outlook for 2011
Over the next several years, we expect to invest significantly in expanding production at existing mines and advancing projects as we pursue our growth strategy. The projects are at various stages of development, from exploration and evaluation to construction.
We expect our existing cash balances and operating cash flows will meet our anticipated capital requirements without the need for significant additional funding. Cash balances will decline gradually as we use the funds in our business and pursue our growth plans.
Our outlook for 2011 reflects the growth expenditures necessary to help us achieve our strategy. We do not provide an outlook for the items in the table that are marked with a dash.
See 2010 financial results by segment for details.
| Consolidated | Uranium | Fuel services | Electricity | |
|---|---|---|---|---|
| (1) Commencing January 1, 2011, we will be reporting our financial results in accordance with IFRS. The information in our 2011 financial outlook has been prepared in accordance with IFRS and our policy choices thereunder to date. A discussion about our transition to IFRS can be found here. | ||||
| (2) Based on a uranium spot price of $73.00 (US) per pound (the Ux spot price as of February 7, 2011), a long-term price indicator of $73.00 (US) per pound (the Ux long-term indicator on January 31, 2011) and an exchange rate of $1.00 (US) for $1.00 (Cdn). | ||||
| (3) This increase is based on the unit cost of sale for produced material. If we decide to make discretionary purchases in 2011 then we expect the overall unit cost of product sold to increase further. | ||||
| (4) Direct administration costs do not include stock-based compensation expenses. | ||||
| (5) Does not include our share of capital expenditures at BPLP. | ||||
| Production | — | 21.9 million lbs | 15 to 16 million kgU | — |
| Sales volume | — | 31 to 33 million lbs | Increase 10% to 15% | — |
| Capacity factor | — | — | — | 89% |
| Revenue compared to 2010 |
Increase 10% to 15% |
Increase 15% to 20%2 |
Increase 5% to 10% |
Decrease 10% to 15% |
| Unit cost of product sold (including DDR) |
— | Increase 0% to 5%3 | Increase 2% to 5% |
Increase 10% to 15% |
| Direct administration costs compared to 20104 |
Increase 15% to 20% |
— | — | — |
| Exploration costs compared to 2010 |
— | Decrease 5% to 10% |
— | — |
| Tax rate | Recovery of 0% to 5% | — | — | — |
| Capital expenditures | $575 million5 | — | — | $80 million |
Sensitivity analysis
For 2011:
- a change of $5 (US) per pound in each of the Ux spot price ($73.00 (US) per pound on February 7, 2011) and the Ux long-term price indicator ($73.00 (US) per pound on January 31, 2011) would change revenue by $34 million and net earnings by $26 million.
- a change of $5 in the electricity spot price would change our 2011 net earnings by $2 million, based on the assumption that the spot price will remain below the floor price provided for under BPLP's agreement with the Ontario Power Authority (OPA).
