| Wed 23 May 2007, 8:47 | | FUM - First Uranium - News Release - First Uranium |
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FUM
FIU
FUM - First Uranium - News Release - First Uranium Files Revised
Buffelsfontein Technical Report
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
FIRST URANIUM CORPORATION
NEWS RELEASE - May 22, 2007
NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S.
NEWSWIRE SERVICES
FIRST URANIUM FILES REVISED BUFFELSFONTEIN TECHNICAL REPORT
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 (the "Revised Report") on
its Buffelsfontein uranium and gold tailings recovery project ("Buffels")
in South Africa. The Revised Report prepared by Scott Wilson Roscoe Postle
Associates Inc. ("Scott Wilson RPA") reflects the previously announced
proposed acquisition (the "MWS Acquisition") by First Uranium of Mine Waste
Solutions (Proprietary) Limited ("MWS") which owns and operates an existing
gold mining tailings and reprocessing facility adjacent to Buffels. The
Revised Report also incorporates the proposed acquisition by First Uranium
of three additional small tailings dams from an affiliated company (the
"Additional Dams Acquisition"). In addition, to better reflect the current
uranium pricing environment, the assumed price per pound of uranium has
been increased by US$10 to US$50 from the assumption in the January 31,
2007 Buffels technical report (the "Prior Buffels Report").
According to the Revised Report, the projected net present value ("NPV") of
the Buffels project (assuming the completion of the MWS Acquisition, the
Additional Dams Acquisition and a discount rate of 8%) is US$295 million
with a projected internal rate of return ("IRR") of 69% (as compared to
US$211 million and 39%, respectively, as disclosed in the Prior Buffels
Report). The incorporation of the MWS Acquisition and the Additional Dams
Acquisition into the Buffels project accounted for an increase in the
projected NPV and IRR to US$237 million and 57% respectively as compared to
the Prior Buffels Report. In addition, according to the Revised Report, the
increase in the uranium price assumption accounted for an increase in the
projected NPV from US$237 million to US$295 million and in the projected
IRR from 57% to 69%.
"Our primary objective is to bring our mining projects into production as
soon as possible while keeping all of our stakeholders informed and engaged
in our progress," said Gordon Miller, President and Chief Executive
Officer. "We have upheld our commitment to publish a revised technical
report for our Buffelsfontein tailings recovery project this month. The
revised report reflects our better understanding of the benefit of the
pending Mine Waste Solutions acquisition, our higher long-term price
expectations for uranium and more confidence in our plans to accelerate
higher production levels for uranium."
The first of the following two tables reflects the original mineral
resource statement for Buffels as of April 2006, excluding the proposed MWS
Acquisition and the Additional Dams Acquisition.
The second table reflects the revised mineral resource statement for
Buffels as at May 22 2007, adjusted for the MWS Acquisition and the
Additional Dams Acquisition. The second table includes certain adjustments
from the table set out in First Uranium`s April 4, 2007 news release.
First, the MWS Dam 2 and Dam 4 resources have been converted from inferred
to measured and indicated as a result of further work and verification. In
addition, the MWS Dam 2 resources has been reduced as approximately 1.1
million tonnes of tailings have been used by MWS to run its gold plant
since the resources were previously measured. As well, the Company has
included the MWS Dam 5 resource in the resource statement in the inferred
category.
ORIGINAL RESOURCE STATEMENT (as of April 2006)
Tonnes Grade Content
Gold U3O8 Gold U3O8
Measured (000s) (g/t) (%) (oz 000s) (lb 000s)
Buffels 2 23,700 0.40 0.0087 301 4,544
Buffels 3 29,400 0.35 0.0103 335 6,674
Buffels 4 16,380 0.38 0.0102 202 3,682
Buffels 5 45,584 0.21 0.0062 306 6,229
Total Measured 115,064 0.31 0.0083 1,144 21,130
Indicated
Harties 1 92,576 0.32 0.0061 941 12,446
Harties 2 35,640 0.31 0.0058 354 4,556
Harties 5 23,133 0.31 0.0053 228 2,702
Harties 6 14,604 0.22 0.0059 105 1,899
Total Indicated 165,953 0.31 0.0059 1,628 21,603
Total Meas. & 281,017 0.31 0.0069 2,772 42,733
Indicated
Inferred
Harties 7 1,740 0.54 0.0243 30 932
Total Inferred 1,740 0.54 0.0243 30 932
Notes:
1 CIM definitions were followed for mineral resources.
2 A zero grade cutoff grade was used.
3. Rows and columns may not add exactly due to rounding.
4. Preliminary metallurgical test results indicate that recoveries will
be approximately 27% for uranium and 68% for gold.
5. Mineral resources that are not mineral reserves do not have
demonstrated economic viability.
REVISED RESOURCE STATEMENT (as per the Revised Report)
Tonnes Grade Content
Gold U3O8 Gold U3O8
Measured (000s) (g/t) (%) (oz (lb
000s) 000s)
Buffels 2 23,700 0.40 0.0087 301 4,544
Buffels 3 29,400 0.35 0.0103 335 6,674
Buffels 4 16,380 0.38 0.0102 202 3,682
Total Measured 69,480 0.38 0.0097 838 14,901
Indicated
Buffels 5 45,584 0.21 0.0062 306 6,229
Harties 1 92,576 0.32 0.0061 941 12,446
Harties 2 35,640 0.31 0.0058 354 4,556
Harties 5 23,133 0.31 0.0053 228 2,702
Harties 6 14,604 0.22 0.0059 105 1,899
MWS 2 2,600 0.45 0.0080 38 458
MWS 4 14,423 0.29 0.0140 134 4,450
Total Indicated 228,560 0.29 0.0065 2,106 32,741
Total Meas. & 298,040 0.31 0.0073 2,944 47,642
Indicated
Inferred
Harties 7 1,740 0.54 0.0243 30 932
Harties - 43 0.80 0.0229 1 22
Flanagan
Harties - 1,500 0.52 0.0087 25 288
Ellaton
Harties - NKGE 680 0.41 0.0158 9 237
MWS 5 60,700 0.29 0.0093 566 12,442
Total Inferred 64,663 0.30 0.0098 631 13,920
Notes:
1 CIM definitions were followed for mineral resources.
2 A zero grade cutoff grade was used.
3. Rows and columns may not add exactly due to rounding.
4. Preliminary metallurgical test results indicate that recoveries will
be approximately 27% for uranium and 68% for gold.
5. Mineral resources that are not mineral reserves do not have
demonstrated economic viability.
6. Harties - Flanagan, Harties - Ellaton and Harties - NKGE are the three
tailings dams proposed to be acquired by First Uranium pursuant to the
Additional Dams Acquisition.
While the MWS Dam 5 resource is included in the revised Buffels resource
statement, it has not been included in the economic analysis on the Buffels
project. However, the Company anticipates that MWS Dam 5 would add another
three years to Buffels` mine life.
With the MWS resources better defined, the Buffels` mine life is now
estimated, assuming the completion of the MWS Acquisition, to be 16 years,
not 17 as originally announced on April 4, 2007.
As the Company allocates Buffels` projected cash costs in proportion to the
projected revenue contribution from each product and the Company is
assuming higher uranium prices and revenues, the Company expects that on a
co-product basis the cash cost of gold should be $220 per ounce and the
cash cost of uranium should be $22.05 per pound.
Gold production at MWS continues and will be credited to First Uranium as
of April 1, 2007 assuming completion of the acquisition. Uranium
production from the first two of three uranium plant modules is scheduled
to commence in November 2008. The average annual production for Buffels
(assuming completion of the MWS Acquisition) for the life of the project
(March 2007 to April 2023) is expected to be 128,000 ounces of gold and
922,000 pounds of uranium.
The Company expects to continue the work with preparation of a pre-
feasibility study for Buffels commencing immediately.
All technical disclosure in this news release relating to the
Buffelsfontein tailings recovery project is extracted from a technical
report entitled "Technical Report - Preliminary Assessment of the
Buffelsfontein Project, North West Province, Republic of South Africa" (the
"Buffels Technical Report") originally submitted on November 8, 2006,
revised on December 5, 2006 and January 31, 2007 and further revised on May
22, 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
RPA, 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.
In addition, the disclosure in this news release and the Buffels Technical
Report assumes the completion of the MWS Acquisition and the Additional
Dams Acquisition by First Uranium. The MWS Acquisition is subject to a
number of conditions including, among others, the receipt of required
approvals from South African competition authorities, the Toronto Stock
Exchange, the South African Reserve Bank and the South African Department
of Minerals and Energy. Subject to receipt of the requisite approvals, the
MWS Acquisition is expected to close no later than August 31, 2007 with
effect as of April 1, 2007.
The economic analysis contained in this news release is contained in the
Buffels 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 Buffels 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
timely completion of the MWS Acquisition and the Additional Dams
Acquisition, 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: 23/05/2007 08:47:03 Produced by the JSE SENS Department.
