U3O8 Corp.
TSX VENTURE : UWE

U3O8 Corp.

October 23, 2009 09:00 ET

U3O8 Corp. to Early Adopt International Financial Reporting Standards in 2010

TORONTO, ONTARIO--(Marketwire - Oct. 23, 2009) - U3O8 Corp. (TSX VENTURE:UWE) ("U3O8 Corp." or "the Corporation"), a Canadian uranium exploration company, announced that the Canadian Securities Administrators have approved its application for early adoption of International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board, for the financial year beginning on January 1, 2010.

Accordingly, U3O8 Corp. will report interim and annual financial statements in accordance with IFRS beginning with the quarter ended March 31, 2010. The Corporation's 2010 interim and annual financial statements will include comparative 2009 financial statements, adjusted to comply with IFRS.

IFRS Transition Plan and Impact on U3O8 Corp.

U3O8 Corp. has established a comprehensive IFRS transition plan and engaged third-party advisers to assist with the planning and implementation of its transition to IFRS. The following summarizes the Corporation's progress and expectations with respect to its IFRS transition plan:

Completed – Initial scoping and analysis of key areas for which accounting policies may be impacted by the transition to IFRS.

Completed – Detailed evaluation of potential changes required to accounting policies, information systems and business processes, including the application of IFRS 1 First-time Adoption of International Financial Reporting Standards.

In progress, for completion in the fourth quarter of 2009 – Final determination of accounting policies and the quantitative impact of adopting IFRS on key line items in the Corporation's financial statements.

During its analysis of requirements for conversion to IFRS, U3O8 Corp. has identified some changes that need to be made to its accounting systems and business processes. The Corporation believes that these changes are minimal and the systems and processes can accommodate the necessary changes. U3O8 Corp. has not identified any contractual arrangements that are significantly impacted by the adoption of IFRS.

U3O8 Corp's staff and advisers involved in the preparation of financial statements have been appropriately trained on the relevant aspects of IFRS and the anticipated changes to accounting policies. The Corporation's staff, who will be affected by a change to business processes as a result of the conversion to IFRS, have also been appropriately trained.

The Board of Directors and Audit Committee have been regularly updated on the progress of the IFRS conversion plan, and are aware of the key aspects of IFRS. The Board of Directors and Audit Committee have also been made aware of the potential changes to accounting policies, and their effect on the financial statements.

First-time Adoption of IFRS

The adoption of IFRS requires the application of IFRS 1 First-time Adoption of International Financial Reporting Standards ("IFRS 1"), which provides guidance for an entity's initial adoption of IFRS. IFRS 1 generally requires retrospective application of IFRS as effective at the end of its first annual IFRS reporting period. However, IFRS 1 also provides for certain optional exemptions and mandatory exceptions to this retrospective treatment. U3O8 Corp. expects to apply the following IFRS optional exemptions in its preparation of an opening IFRS statement of financial position as at January 1, 2009, the Corporation's "Transition Date":

  • To apply IFRS 2 Share-based Payments only to equity instruments which were issued after November 7, 2002 and had not vested by the Transition Date.
  • To apply IFRS 3 Business Combinations prospectively from the Transition Date, therefore not restating business combinations that took place prior to the Transition Date.
  • To apply the transition provisions of IFRIC 14 Determining whether an Arrangement Contains a Lease, therefore determining if arrangements existing at the Transition Date contain a lease based on the circumstances existing at that date.

IFRS 1 does not permit changes to estimates that have been made previously. Accordingly, estimates used in the preparation of U3O8 Corp's opening IFRS statement of financial position will be consistent with those made under current Canadian generally accepted accounting principles ("GAAP"). If necessary, estimates will be adjusted to reflect any difference in accounting policy.

Impact of IFRS on the Corporation's Financial Statements

The adoption of IFRS will result in some changes to U3O8 Corp's accounting policies that are applied in the recognition, measurement and disclosure of balances and transactions in its financial statements. However, based on its evaluation to date, the Corporation does not expect any changes to its accounting policies that would result in significant changes to line items within its financial statements.

The following provides a summary of U3O8 Corp's evaluation of potential changes to accounting policies in key areas:

Exploration Expenditures – IFRS currently allows an entity to retain its existing accounting policies related to the exploration for and evaluation of mineral properties, subject to some restrictions. The Corporation expects to retain its current policy of expensing exploration expenses as incurred, and therefore does not expect that the adoption of IFRS will result in any significant change to the related line items within its financial statements.

Impairment of (Non-financial) Assets – IFRS requires a write down of assets if the higher of the fair market value and the value in use of a group of assets is less than its carrying value. Value in use is determined using discounted estimated future cash flows. Current Canadian GAAP requires a write down to estimated fair value only if the undiscounted estimated future cash flows of a group of assets are less than its carrying value. U3O8 Corp's accounting policies related to impairment of non-financial assets will be changed to reflect these differences, however the Corporation does not expect this change will have an immediate impact to the carrying value of its assets. The Corporation will perform impairment assessments in accordance with IFRS at the Transition Date.

Foreign Currency – IFRS requires that the functional currency of U3O8 Corp. and its subsidiaries be determined separately, and the factors considered to determine functional currency are somewhat different than current Canadian GAAP. The Corporation does not expect any changes to its accounting policies related to foreign currency that would result in a significant change to line items within its financial statements at the Transition Date.

Share-based Payments – In certain circumstances, IFRS requires a different measurement of stock-based compensation related to stock options than current Canadian GAAP. The Corporation does not expect any changes to its accounting policies related to share-based payments that would result in a significant change to line items within its financial statements.

Asset Retirement Obligations (Decommissioning Liabilities) – IFRS requires the recognition of a decommissioning liability for legal or constructive obligations, while current Canadian GAAP only requires the recognition of such liabilities for legal obligations. A constructive obligation exists when an entity has created reasonable expectations that it will take certain actions. U3O8 Corp's accounting policies related to decommissioning liabilities will be changed to reflect these differences, however the Corporation does not expect this change will have an immediate impact to the carrying value of its assets.

Property and Equipment – IFRS contains different guidance related to recognition and measurement of property and equipment than current Canadian GAAP. The Corporation does not expect any changes to its accounting policies related to property and equipment that would result in a significant change to line items within its financial statements.

Income Taxes – IFRS contains different guidance related to recognition and measurement of future (deferred) income taxes. The Corporation does not expect any changes to its accounting policies related to income taxes that would result in a significant change to line items within its financial statements.

Subsequent Disclosures

Further disclosures of the IFRS transition process are expected as follows:

  • Updates on the information contained in this press release will be included in U3O8 Corp's Management Discussion and Analysis for the period ending September 30, 2009 and the year ending December 31, 2009.
  • U3O8 Corp's Management Discussion and Analysis for the year ended December 31, 2009 will include, to the extent known, quantitative information regarding the impact of adopting IFRS on key line items in the annual financial statements.
  • U3O8 Corp's first financial statements prepared in accordance with IFRS will be the interim financial statements for the three months ending March 31, 2010, which will include notes disclosing transitional information and disclosure of new accounting policies under IFRS. The interim financial statements for the three months ending March 31, 2010 will also include 2009 financial statements for the comparative period, adjusted to comply with IFRS, and the Corporation's transition date IFRS statement of financial position (as at January 1, 2009).

About U3O8 Corp.

U3O8 Corp. is a Canadian uranium exploration company based in Toronto, Canada. Currently focused on uranium exploration in the Roraima Basin in Guyana, South America, U3O8 Corp's primary business objective is to explore, develop and acquire uranium projects in the Americas. The Corporation is funded with approximately $6 million held solely in cash and Canadian chartered bank-backed Guaranteed Investment Certificates.

U308 Corp. has exclusive uranium exploration rights in an area covering approximately 1.3 million hectares that straddles the edge of the Roraima Basin in Guyana. The company is advancing a two-pronged exploration strategy that focuses on:

  • Exploration for multiple uranium-bearing structures within structural systems in the basement adjacent to the Roraima Basin with the concept that the individual breccia zones could potentially aggregate to a significant total resource; and

For further information on the company's properties, please refer to the technical reports prepared for the company by Dahrouge Geological Consulting Ltd. and dated September 15, 2006 as amended and restated December 12, 2006; and the NI 43-101 report entitled "A Technical Review of the Aricheng North and Aricheng South Uranium Deposits in Western Guyana for U3O8 Corp. and Prometheus Resources (Guyana) Inc." by Watts, Griffis and McOuat dated January 14, 2009, available on SEDAR at www.sedar.com and on the company's website www.u3o8corp.com.

Forward-Looking Statements

Forward-looking statements in this press release include information being provided to allow investors and others to obtain a better understanding of U3O8 Corp's IFRS transition plan and the resulting possible effects on its financial statements. This information includes statements about the timeline for the Corporation's conversion to IFRS, the Corporation's readiness to transition from current Canadian GAAP to IFRS, and the impact of the conversion to IFRS on the Corporation's accounting policies, financial reporting, accounting systems and business processes. Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of U3O8 Corp., including, but not limited to, the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with the uncertainty of exploration results and estimates, currency fluctuations, dependence upon regulatory approvals, the uncertainty of obtaining additional financing and exploration risk. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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