| Fri 27 Jul 2007, 10:03 | | FUM - First Uranium Corporation - News Release |
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FUM
FIU
FUM - First Uranium Corporation - News Release
First Uranium Corporation
(Continued under the laws of British Columbia, Canada)
(Registration number C0777384)
(South African registration number 2007/009016/10)
Share code: FUM ISIN: CA33744R1029
FIRST URANIUM CORPORATION
NEWS RELEASE - July 26, 2007
FIRST URANIUM IDENTIFIES INITIAL DRILL TARGETS WHICH MAY LEAD TO A
SIGNIFICANT INCREASE IN URANIUM AND GOLD PRODUCTION FROM A NEW 250,000
TONNE-PER-MONTH SHAFT AT THE EZULWINI MINE
Toronto and Johannesburg - First Uranium Corporation (TSX:FIU, JSE:FUM,
CA33744R1029:ISIN) ("First Uranium" or "the Company") today announced that
the Company has defined initial underground and surface drilling targets
related to the possible expansion of the Ezulwini underground uranium
("U3O8") and gold ("Au") mine (the "Expansion Program"), located
approximately 40 kilometres south-west of Johannesburg in the Witwatersrand
Basin of South Africa. The Expansion Program is on track and the drilling
program to test the newly defined drill targets is an integral part of the
Expansion Program to justify the capital required for the sinking of an
additional shaft, which would be used to access and mine the uranium and
gold resource over and above the existing mine plan from the existing main
shaft.
"While we remain focussed on near-term uranium and gold production at our
two South African projects, we recognize how important it is to our
shareholders for us to have additional avenues of growth," said Gordon
Miller, President and Chief Executive Officer of First Uranium. "This
Expansion Program has the potential to significantly increase production
beyond levels currently planned and thereby extend the current 19-year mine
plan, which only consumes 20% of the significant resource area at this
site."
According to First Uranium`s mine plan for Ezulwini, as disclosed in the
technical report filed on May 9, 2007, the Company expects to commence
hoisting in October 2007, with the first gold plant module scheduled for
completion in April 2008 and the first uranium plant module scheduled for
completion in June 2008. According to the existing mine plan, 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.
The Ezulwini mine began operation in the 1960s, producing gold until 2001,
when the mine was placed on care and maintenance. Uranium was mined from
the separate Middle Elsburg ore body, which was developed twenty years
after development of the Upper Elsburg ore body, during the period from
1982 to 1997.
Detailed studies for the Expansion Program have been completed by Minxcon
(Pty) Limited, independent South African mining and exploration consultants
engaged by the Company to validate and capture historic mine sampling and
mill data which has been recovered from archives that were somewhat in
disarray. Recent in stope face sampling procedures have been conducted to
verify some of this historic data. Minxcon has utilised this historical
face sampling information to project higher grade pay-shoot trends for the
purposes of defining drill target areas. The attached plan depicts the pay-
shoot trends identified and illustrates these trends in relation to
existing mine development. Due to the existing development, it will be
possible to drill some of these target areas from existing underground
excavations.
The outputs of this work have been compared to historical grades as
delivered to the plant for a period of 14 years during the period 1982 to
1995: This recent and comprehensive analysis resulted in the derivation of
a mine recovery factor2 of 74% for gold and 65% for uranium for the entire
historic reporting period. These mine recovery factors have been used to
define potential expected plant delivery grades from six respective
drilling target areas. The table below summarizes the expected plant
delivery grades from the conceptual mining areas of each identified target
zone based upon a Bayesian approach.
Drill Drilling Au U3O8
Target Access From:
Area
Assumed Assumed
Assumed Actual Plant Assumed Actual Plant
Cut Off In Stope Delivery Cut Off In Delivery
Grade Grade Grade Grade Stope Grade
Grade
g/t g/t g/t kg/t kg/t kg/t
11 Surface 4.46 8.93 6.61 0.566 0.970 0.630
2 Underground 2.85 10.2 7.54 0.436 0.800 0.520
3 Underground 2.61 6.66 4.93 0.564 0.128 0.830
4 Underground 2.49 7.11 5.26 0.264 0.560 0.360
5 Underground 1.34 4.13 3.05 0.290 0.580 0.520
6 Underground 2.99 6.69 4.95 0.410 0.800 0.450
Notes: 1) This table has been derived using population statistics on
face sampling data; geo-statistics have been applied to pay shoot 1 only,
resulting in a lower Au plant delivery grade of 5.9g/t (versus 6.61g/t) and
a higher U3O8 plant delivery grade of 0.642kg/t (versus 0.630kg/t)
2) Mine Recovery Factor is the combination of dilution and loss factors
applied to convert "in stope" sampling grade to a plant delivery grade
3) Grades depicted are based upon face sample averages within mining areas
adjacent to drill target areas
4) Cut off grades per pay-shoot area were determined using grade tonnage
curves derived from a historical mining extraction of 65%
5) Average stope mining width was 180 centimetres
The surface area for each of the respective drill target areas, as shown in
the table below, has been defined by assuming that historical geological
pay-shoot continuity exists such that a metal content per available mining
square metre can be ascribed to these areas.
Drill Plant Delivery Grade
Target Square Au U3O8
Area Metres Equivalent Equivalent Width
Au U3O8
Equivalent
Equivalent
g/t kg/t m2 g/m2 kg/m2 cm
1 10.93 1.589 1,044,742 54.72 7.95 180
2 11.10 1.614 381,582 55.57 8.08 180
3 10.68 1.552 104,213 53.42 7.76 180
4 7.76 1.127 226,526 38.81 5.64 180
5 5.65 0.821 168,506 28.26 4.11 180
6 8.53 1.239 202,589 42.67 6.20 180
1) Au and U3O8 equivalents have been calculated using only First Uranium`s
stated long-term pricing assumptions of US$500 per ounce for Au and US$50
per pound for U3O8.
2) By example, a grade of 1Kg U3O8 per tonne equates to 6.88 grams per
tonne of Au.
Based upon an internal concept evaluation, the combined Phase 1 drill
target areas have the potential to delineate a substantial portion of the
measured and indicated resources required to justify the construction of a
new 250,000 tonne-per-month shaft and mill expansion, which could
effectively triple production capacity form the uranium-bearing Middle
Elsburg ore body. The conceptual evaluation excludes any potential
contribution from lower-grade areas known to exist between pay shoots, and
excludes any potential contribution from the UE1a Reef. The Company
expects that it will need to drill approximately 16,000 metres to complete
Phase 1 of the Expansion Program.
The Phase 2 target areas, which are significantly larger in area, have been
less explored in the past since mining activity was concentrated in the
northern section of the property. New drill target areas will be defined
in Phase 2 once the face sampling information from historic mining in these
areas has been validated for the UE1A Reef. Based on very limited
information, gathered from three previous surface drill holes, it is
apparent that a zone of thicker width gold and uranium mineralisation
exists where the E9EC and UE1A Reefs sub outcrop against each other. This
zone which varies in thickness, from 7 to 26 metres, has been intersected
at three points along a three-kilometre section of strike stretching from
the northern boundary of the property and is open ended to the southern
boundary. This zone has been mined extensively on the property to the
north of Ezulwini, where mechanised mining methods were used to
successfully extract gold over mining widths of up to 25 metres.
First Uranium will continue to define additional drill target areas to add
to the findings of the existing Expansion Program and expects to disclose
the complete drill results and resource estimation by the end of 2008.
The Expansion Program excludes any prospecting that will take place on
contiguous properties to the north-east and south-east of the Ezulwini
lease area covered by the prospecting application submitted to and accepted
by, the South African Department of Minerals and Energy, as disclosed in
First Uranium`s news release dated on April 16, 2007.
All technical disclosure in this news release relating to the Expansion
Program is extracted from studies prepared in accordance with National
instrument 43-101 ("NI 43-101) by Daan Van Heerden, Pr.Eng of South African
mining and exploration consultants, Minxcon (Pty) Limited, who 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. Van Heerden.
The life of mine estimate, projected average annual production and inferred
resource grades 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 in this news release related to the RPA technical
report 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 certain forward-looking statements. Forward-
looking statements include but are not limited to those with respect to the
price of uranium and gold, the estimation of mineral resources and
reserves, the realization of mineral reserve estimates, the timing and
amount of estimated future production, costs of production, capital
expenditures, costs and timing of development of new deposits, success of
exploration activities, permitting time lines, currency fluctuations,
requirements for additional capital, government regulation of mining
operations, environmental risks, unanticipated reclamation expenses, title
disputes or claims and limitations on insurance coverage and the timing and
possible outcome of pending litigation. In certain cases, forward-looking
statements can be identified by the use of words such as "plans", "expects"
or "does not expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates", or "does not anticipate", or
"believes" or variations of such words and phrases, or state that certain
actions, events or results "may", "could", "would", "might" or "will" be
taken, occur or be achieved. Forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of First Uranium to be materially
different from any future results, performance or achievement expressed or
implied by the forward-looking statements. Such risks and uncertainties
include, among others, the actual results of current exploration
activities, conclusions of economic evaluations, changes in project
parameters as plans continue to be refined, possible variations in grade
and ore densities or recovery rates, failure of plant, equipment or
processes to operate as anticipated, accidents, labour disputes or other
risks of the mining industry, delays in obtaining government approvals or
financing or in completion of development or construction activities, risks
relating to the integration of acquisitions, to international operations,
to prices of uranium and gold. Although First Uranium has attempted to
identify important factors that could cause actual actions, events or
results to differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events or
results not to be as anticipated, estimated or intended. It is important
to note, that: (i) unless otherwise indicated, forward-looking statements
indicate the Corporation`s expectations as at the data of this news
release; (ii) actual results may differ materially from the Corporation`s
expectations if known and unknown risks or uncertainties affect its
business, or if estimates or assumptions prove inaccurate; (iii) the
Corporation cannot guarantee that any forward-looking statement will
materialize and, accordingly, readers are cautioned not to place undue
reliance on these forward-looking statements; and (iv) the Corporation
disclaims any intention and assumes no obligation to update or revise any
forward-looking statement even if new information becomes available, as a
result of future events or for any other reason.
In making the forward-looking statements in this news release, First
Uranium has made several material assumptions, including but not limited
to, the assumptions referred to in this news release and assumption that:
(i) approvals to transfer or grant, as the case may be, mining rights will
be obtained; (ii) metal prices, exchange rates and discount rates applied
in the preliminary economic assessments are achieved; (iii) mineral
resource estimates are accurate; (iv) the technology used to develop and
operate its two projects has, for the most part, been proven and will work
effectively; (v) labour and materials will be sufficiently plentiful as to
not impede the projects or add significantly to the estimated cash costs of
operations; (vi) outstanding approvals for the completion of an
acquisition, the transfer of mining rights and the approval of mining
rights will be granted; (vii) black economic empowerment ("BEE") investors
will maintain their interest in the Corporation and their investment in the
Corporation`s common shares to a sufficient level to continue to support
the Corporation`s compliance with 2014 BEE requirements; and (viii) the
innovative work on stabilizing the main shaft at the Ezulwini Mine will be
successful in maintaining a safe and uninterrupted working environment
until 2024.
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 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:
Bob Tait, VP Investor Relations at 416 558-3858 or bob@firsturanium.com
Borehole Channel Au U3O8
Width
(cm)
E9EC UE1A E9EC UE1A
E9EC UE1A g/t g/t kg/t kg/t
A 66 61 0.10 15.07 0.073 0.573
B 153 546 0.10 1.60 0.328 0.625
C 160 902 0.10 3.18 0.154 0.309
D 995 1665 3.05 0.97 0.418 0.191
E 731 2.10 0.272
Date: 27/07/2007 10:03:01 Produced by the JSE SENS Department.
