| Thu 10 May 2007, 7:36 | | FUM - First Uranium - Files revised Ezulwini techn |
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FUM
FIU
FUM - First Uranium - Files revised Ezulwini technical report reflecting an
accelerated schedule and improved NPV
FIRST URANIUM CORPORATION
Registration Number: C0777384
ISIN: CA33744R1029
(Continued under the laws of British Columbia, Canada)
SA Company Registration Number: 2007/009016/10
TSX Share code: FIU
JSE Share code: FUM
NEWS RELEASE - May 9, 2007
NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE
SERVICES
FIRST URANIUM FILES REVISED EZULWINI TECHNICAL REPORT REFLECTING AN ACCELERATED
SCHEDULE AND IMPROVED NPV
Toronto and Johannesburg - First Uranium Corporation (TSX: FIU, JSE: FUM)
(CA33744R1029: ISIN) ("First Uranium" or "the Company") today announced that the
Company has filed a revised technical report on its Ezulwini Mining Company
(Proprietary) Limited ("EMC") underground uranium and gold mine. (All dollar
amounts are in U.S. dollars.)
The preliminary assessment within the technical report generally confirms the
previous technical report for the Ezulwini mine project, with some revisions.
Those revisions include:
A 29% or $74 million improvement in NPV, from $258 million to $332 million. A
6% improvement in IRR, from 26% to 32%. Although these improvements reflect the
increase in the long-term price assumptions for uranium from $40 per pound to
$50 per pound, they have also improved due to the investment of pre-production
capital at a faster rate than originally planned, which results in an
accelerated schedule for planned uranium and gold production. The improved NPV
assumes the original discount rate of 8% and a gold price of $500 per ounce and
excludes sunk capital costs.
A $24.2 million increase in projected metallurgical plant costs from $88.6
million to $112.8 million, due to higher than expected increases in the cost of
steel and cement caused by an industry-wide construction boom. The contingency
has been reduced by $13.1 million from $44.1 million to $31.0 million due to
confirmation of firm pricing, thus increasing the level of confidence in the
capital estimates.
An accelerated schedule for mining the Middle Elsburg uranium and gold reef at
EMC, due to the excellent condition of the stopes. The increased uranium
production rate will also enable EMC to leverage the strong uranium pricing
fundamentals.
An accelerated schedule for commissioning of all modules of the gold and uranium
plants, resulting in an accelerated capital investment profile, which will
provide the flexibility sooner to significantly increase uranium production when
market pricing dictates. The Company will use construction contractors until all
phases of the mill and plants are completed.
A net 122,000 ounce decrease in the shaft pillar gold resource in the Upper
Elsburg reef, which will not have an impact on the project economics as the mill
feed can be made up from other resource areas.
A recommendation for an additional exploration program focused on areas of the
Middle Elsburg reef to confirm the inferred resource estimate in support of the
possible expansion of the Ezulwini operations, (ref. April 16, 2007 news
releases).
"Our primary objective is to put both of our mining projects into production at
the earliest opportunity, while remaining diligent about creating a safe
environment and achieving the best return on our investment," said Gordon
Miller, President and Chief Executive Officer. "The revised technical report for
Ezulwini shows that better than expected mining conditions have allowed us to
accelerate our original plans in key areas of the project. We are on track to
meet our revised production deadlines and consequently we expect a better than
planned return on this project."
The first of the two following tables shows the original mineral resource
statement and the second table shows the revised mineral resource statement at
Ezulwini as at January 2007, based on the results of an additional 22 drill
holes in the shaft pillar area of the Upper Elsburg reef.
ORIGINAL RESOURCE STATEMENT (as of July 2006)
Tonnes Grade Content
Gold U3O8 Gold U3O8
Measured (000s) (g/t) (%) (oz 000s) (lb 000s)
UE Shaft Pillar 2,101 7.7 - 520 -
Middle Elsburg 2,450 4.9 0.072 384 3,888
Total 4,551 6.2 n/a 904 3,888
Indicated
UE Shaft Pillar 4,586 6.1 - 900 -
Middle Elsburg 1,370 5.8 0.095 257 2,880
Total 5,956 6.0 n/a 1,157 2,880
Measured and
Indicated
UE Shaft Pillar 6,687 6.6 - 1,420 -
Middle Elsburg 3,820 5.2 0.08 641 6,768
Total 10,507 6.1 n/a 2,061 6,768
Inferred
Upper Elsburg 64,550 5.8 - 12,055 -
Middle Elsburg 136,910 4.6 0.076 20,074 229,329
Total 201,460 5.0 n/a 32,129 229,329
REVISED RESOURCE STATEMENT (as of January 2007)
Tonnes Grade Content
Gold U3O8 Gold U3O8
Measured (000s) (g/t) (%) (oz 000s) (lb 000s)
UE Shaft Pillar 2,490 7.7 - 615 -
Middle Elsburg 2,450 4.9 0.072 384 3,888
Total 4,940 6.3 n/a 999 3,888
Indicated
UE Shaft Pillar 3,640 5.8 - 683 -
Middle Elsburg 1,370 5.8 0.095 257 2,880
Total 5,010 5.8 n/a 940 2,880
Measured and
Indicated
UE Shaft Pillar 6,130 6.6 - 1,298 -
Middle Elsburg 3,820 5.2 0.08 641 6,768
Total 9,950 6.1 n/a 1,939 6,768
Inferred
Upper Elsburg 64,550 5.8 - 12,055 -
Middle Elsburg 4,810 2.3 - 351
Channel
Middle Elsburg 132,100 4.7 0.075 19,742 218,319
Total 201,460 5.0 n/a 32,148 218,319
Notes:
1 CIM definitions were followed for mineral resources.
2 Mineral resources in the Upper Elsburg shaft pillar are estimated at a
4.0 g/t Au cut-off grade
3. Mineral resources are estimated using an average long-term gold price
of US$500 per ounce, and a US$/R exchange rate of 7.0.
4. A minimum mining width of 1.53 m was used.
5. Rows and columns may not add exactly due to rounding.
6. Mineral resources that are not mineral reserves do not have
demonstrated economic viability.
The following figure illustrates the revised capital investment schedule by
quarter through to the end of 2009:
(To view this figure, please see a copy of this news release on the Company`s
website: www.firsturanium.com)
The following graph shows the impact of the changes to the capital investment
schedule on the development program for Ezulwini. The program on the left was
disclosed in a 2006 technical report filed on SEDAR on December 5, 2006. The
program on the right illustrates the changes in the timelines as a result of the
acceleration of the capital investment.
(To view this graph, please see a copy of this news release on the Company`s
website: www.firsturanium.com)
The following table depicts the revised planned production from April 2007
through to March 2015:
From 2007 2008 2009 2010 2011 2012 2013 2014
April
To March 2008 2009 2010 2011 2012 2013 2014 2015
Report
Date
Gold ore Dec 2006 92 196 736 1,186 1,243 1,091 759 806
000s tones
May 2007 93 196 736 1,186 1,243 1,091 759 806
Uranium Dec 2006 - - 800 969 892 1,077 981 951
ore 000s
tones
May 2007 - 410 725 784 943 1,077 981 951
Recovered Dec 2006 17.2 50.3 251.7 363.0 364.9 334.1 247.2 246.9
gold 000s
oz
May 2007 17.8 98.6 242.9 341.3 370.5 334.1 247.2 246.9
Recovered Dec 2006 - - 662.6 804.7 750.4 929.1 893.2 895.8
uranium
000s lbs
May 2007 - 335.5 602.6 652.3 793.4 929.1 893.2 895.8
Mining at the Ezulwini underground mine is planned to commence in October 2007,
the first gold plant module is scheduled for completion in April 2008 (three
months earlier than planned) and the first uranium plant module is scheduled for
June 2008. The average annual production at Ezulwini for the life of the
project (2007-2024) is expected to be 290,000 ounces of gold and 888,000 pounds
of uranium (U3O8).
All technical disclosure in this news release relating to the Ezulwini
underground mine project is extracted from a technical report entitled
"Technical Report - Preliminary Assessment of the Ezulwini Project, Gauteng
Province, Republic of South Africa" (the "Technical Report") originally
submitted on November 8, 2006, revised on December 5, 2006 and January 31, 2007
and further revised on May 9, 2007 prepared in accordance with National
instrument 43-101 ("NI 43-101) by R. Dennis Bergen, P.Eng and Wayne Valliant
P.Geo of Scott Wilson Roscoe Postle Associates Inc., each of whom is a
"qualified person" under NI 43-101 and is independent of First Uranium. The
disclosure contained in this news release has been reviewed and approved by Mr.
Bergen and Mr. Valliant.
The economic analysis contained in this news release is contained in the
Technical Report and is based, in part, on inferred resources, and is
preliminary in nature. Inferred resources are considered too geologically
speculative to have mining and economic considerations applied to them and to be
categorized as Mineral Reserves. There is no certainty that the reserves
development, production and economic forecasts on which the preliminary
assessment contained in the Technical Report is based, will be realized.
Cautionary Language regarding Forward-Looking Information
This news release contains and refers to forward-looking information based on
current expectations. All other statements other than statements of historical
fact included in this release including, without limitation, statements
regarding potential production rates and operating costs, processing and
development plans, estimated net present values and future plans and objectives
of First Uranium are forward-looking statements (or forward-looking information)
that involve various risks and uncertainties. These forward-looking statements
are made as of the date hereof and there can be no assurance that such
statements will prove to be accurate, such statements are subject to significant
risks and uncertainties, and actual results and future events could differ
materially from those anticipated in such statements. Accordingly, readers
should not place undue reliance on forward-looking statements that are included
herein, except in accordance with applicable securities laws.
Important factors could cause actual results to differ materially from First
Uranium`s expectations. Such factors include, among others: the actual results
of the planned feasibility studies on First Uranium`s projects; the actual
results of additional exploration and development activities at First Uranium`s
projects; the timing and amount of estimated future production and the costs
thereof; capital expenditures; the costs and timing of the development of First
Uranium`s projects; the availability of any additional capital required to bring
future projects into production; conclusions of economic evaluations; changes in
project parameters as plans continue to be refined; future prices of
commodities; the failure of plant, equipment or processes to operate as
anticipated; accidents; labour disputes; delays in obtaining governmental
approvals, permits or financing or in the completion of development or
construction activities; currency fluctuations, as well as those factors
discussed under "Risk Factors" in First Uranium`s final prospectus dated
December 12, 2006 as filed with securities regulatory authorities in Canada.
Although First Uranium has attempted to identify important factors that could
cause actual results to differ materially, there may be other factors that cause
results not to be as anticipated, estimated or intended.
About First Uranium Corporation
First Uranium Corporation is focused on the development of South African uranium
and gold mines with the goal of becoming a significant producer through the re-
opening and development of the Ezulwini underground mine, and the construction
of the Buffelsfontein tailings recovery facility. First Uranium also plans to
grow production by pursuing acquisition and joint venture opportunities.
First Uranium Corporation
1240-155 University Avenue, Toronto, ON Canada M5H 3B7
www.firsturanium.com
For further information, please contact:
Gordon Miller, President and Chief Executive Officer at +27 11 830 0390 or Bob
Tait, VP Investor Relations at 416 558-3858 or bob@firsturanium.com
Date: 10/05/2007 07:36:10 Produced by the JSE SENS Department.
