| Wed 21 May 2008, 7:52 | | FUM - First Uranium Provides Production And Projec |
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FUM
FIU
FUM - First Uranium Provides Production And Project Development Update For
Quarter Ended March 31, 2008
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
May 21, 2008
FIRST URANIUM PROVIDES PRODUCTION AND PROJECT DEVELOPMENT UPDATE FOR QUARTER
ENDED MARCH 31, 2008
All amounts are in US dollars unless otherwise noted.
Toronto and Johannesburg - First Uranium Corporation (TSX:FIU, JSE:FUM)
(ISIN:CA33744R1029) ("First Uranium" or "the Company") today announced its
production results for the fiscal quarter ended March 31, 2008 ("Q4 2008"),
during which the Company processed 1,592,242 tonnes of reclaimed tailings at
its Mine Waste Solutions tailings recovery project ("MWS") and 18,669 tonnes
of underground gold ore from its Ezulwini Mine ("Ezulwini") through a toll
treatment arrangement. Gold production totaled 9,725 ounces for the period.
Subsequent to March 31, 2008, the Company commenced production of uranium and
gold ore at Ezulwini, which is currently being stockpiled on surface. The
Company`s uranium plants are on schedule to begin to be commissioned in June
2008 at Ezulwini and in December 2008 at MWS.
In mid-June 2008 First Uranium expects to announce its annual audited
financial results for the year ended March 31, 2008
Highlights for Q4 2008
Mine Waste Solutions tailings recovery project ("MWS")
- gold plant feed capacity upgraded from 6.0 to 7.6 million tonnes of
processing per annum ("MTPA")
- approximately 1.6 million tonnes of tailings were processed, producing
7,030 ounces of gold
- first 7.8 MTPA pump station completed at Buffelsfontein tailings dam
complex
- commissioning of gold plant upgrades and a new mining and processing
system scheduled for completion in July 2008
- 30-megawatt power plant for expansion sourced
preliminary assessment for construction of a Company-owned sulphuric
acid plant was completed, with completion of a specification and
procurement study scheduled for July 2008
- construction of new 7.8 MTPA uranium and pyrite flotation plant on track
to commence commissioning during December 2008 (part of "Phase 1B" of
the MWS project)
- construction of new 7.8 MTPA gold plant and 1.5 MTPA uranium plant on
track to commence commissioning during December 2008 (also part of
"Phase 1B" of the MWS project)
Ezulwini Mine ("Ezulwini")
- toll treated 18,669 tonnes of underground ore to produce 2,695 ounces of
gold
- the third party toll treating gold ore from Ezulwini suspended this
operation due to the power shortage and, as a result, the Company
postponed the ramp-up of the underground development and accelerated the
shaft refurbishment program
- underground development and hoisting of ore started again in April and
uranium and gold ore is being stockpiled on surface
- 2.4 MTPA gold plant commissioning commenced during April 2008 (3 months
earlier than anticipated at the time of the Company`s initial public
offering in December 2006) and on schedule for production of gold on
carbon in June and gold bullion in July 2008
- first of four 0.6 MTPA mills is being commissioned, with the second mill
due to commence commissioning in September 2008
- underground stope availability is on schedule in the Middle Eslburg
(uranium and gold) section but somewhat behind schedule in the Upper
Elsburg (gold) section, which is not expected to affect the planned
production profile
- standby diesel generated power connected into new plant
- 1.2 MTPA uranium plant construction on track to commence commissioning
in July 2008 for uranium concentrate (yellow cake, ammonium diuranate,
or "ADU") production in August 2008
Affecting both projects, First Uranium also disclosed the results of updated
technical reports on April 21, 2008 which detail the Company`s proactive
approach to reducing future operating costs and securing sufficient power and
sulphuric acid to run its operations as planned. Summary cash flow models
related to these technical reports have been posted to the Company`s website
(www.firsturanium.com) and provide revised estimates for production, capital
and operating costs. The full technical reports are scheduled to be filed on
SEDAR and posted to the website by early June.
Mine Waste Solutions
Buffelsfontein No. 2 Dam Commissioning
Commissioning of the gold plant expansion from 6 MTPA to 7.6 MTPA and the
installation of the pumping system to bring tailings from the Buffelsfontein
dam complex has progressed on schedule and within budget.
As expected, the transition of mining from the Stilfontein dam complex to the
Buffelsfontein dam complex has resulted in a reduction in unit cash costs for
gold production and it is expected that planned life of project unit costs
will be achieved when final commissioning is completed by mid-2008.
Results from the mining of Buffelsfontein No. 2 Dam to date have confirmed
the mineral resource estimates for gold and uranium, as well as the estimated
sulphur content. Minor modifications to the hydraulic mining system to
improve throughput and to the carbon-in-leach ("CIL") plant flow sheet to
improve recovery are being implemented and are expected to be completed in
July 2008; after which the commissioning of the first phase of the transition
to the Buffelsfontein complex of dams should be complete. These modifications
include:
- installation of a slime re-pulping system to break up clay lumps and
improve hydraulic mining rates to 1.9 million tonnes per quarter and to
stabilize pulp densities pumped to the plant
- completion of the current work to re-route flotation tailings from the
tailings disposal line to the CIL gold circuit to reduce float tails
grades and increase overall gold recovery rates to expected levels
- installation of high shear oxygen reactors to improve gold recovery
grades to 0.19 grams per tonne in the expanded CIL circuit
MWS Quarterly Production Results
Q3 2008 Q4 2008
Tonnes processed 832, 208 1, 592, 242
Grade of gold recovered 0.27 0.14
(grams/tonne)
Gold recovered (kilograms) 229 219
Gold recovered (ounces) 7,357 7,030
Construction
Sourcing of the additional power plant required to commission the Phase 1B
expansion (which includes a 7.8 MTPA uranium and pyrite flotation plant, a
7.8 MTPA gold plant and a 1.5 MTPA uranium plant) has progressed according to
schedule. Construction of the Phase 1B complex is progressing according to
budget and is on schedule to commence commissioning in December 2008.
Ezulwini Mine
Upper Elsburg ("UE") and Shaft Re-engineering Project
The Company has completed the installation of the safety support systems to
prevent future impact on the main shaft from possible ground movement within
the weak Western Areas Formation ("WAF") where it intersects the shaft.
Additional support installation above and below this area is 85% complete.
Support through the WAF zone in the ventilation shaft is 66% complete and
support above and below the WAF zone in the ventilation shaft is 60%
complete.
While development work on the UE reef horizon (gold) which is being
undertaken to provide access to the shaft de-stress cut in order to relieve
possible future pressure on the main shaft is behind schedule (about 74%
complete), the delay is not expected to impact the operation`s production
profile as the opening up of previously un-mined portions of the UE ore body
outside of the shaft pillar area is ahead of schedule.
The ore loading system at the shaft bottom has been replaced and now exceeds
current mining requirements. The final commissioning of the new hanging tower
steel work in the main shaft is expected to be completed by March 2009. This
new system will allow for a long-life low-maintenance shaft system. Once the
shaft is de-stressed, mining in the shaft de-stress cut area is expected to
continue for a further six years.
Results from development sampling, stope sampling and run of mine belt
sampling continue to provide positive reconciliations to the gold grades
estimated in the current UE mineral resource block model.
Surface stockpiling of production from the UE development and stoping
operations has commenced.
Middle Elsburg ("ME") Project
As disclosed in the Company`s news release dated February 13, 2008, mining in
the ME uranium and gold section of the Ezulwini Mine was curtailed during the
quarter due to the power shortage situation. Production has since recommenced
as has hoisting and stockpiling of uranium and gold bearing ore on surface.
The opening up, sampling and preparation of new stopes has resulted in
sufficient mining areas being available to meet start up production
requirements. It is anticipated that commercial production rates from the ME
uranium and gold ore-body will be achieved during the year ending March 2009,
as scheduled.
Results from development sampling, stope sampling and run of mine belt
sampling continue to provide positive reconciliations to the gold and uranium
grades estimated in the current ME mineral resource block model.
Ezulwini Quarterly Production Results
Q3 Q4
Gold tonnes toll-treated 27,951 18,669
Grade of gold recovered 5.6 4.5
(grams/tonne)
Gold recovered (kilograms) 157 84
Gold recovered (ounces) 5,055 2,695
Ezulwini Surface Stockpile Status (as at May 16, 2006)
Gold grade U3O8 grade
Source Tonnes (grams/tonne)* grams/tonne*
Clean up and 127,500 1.1 -
development
Upper Elsburg 4, 338 4.7 -
stopes
Middle Elsburg 2,501 3.6 800
stopes
*Sampled belt grades
Gold and Uranium Plant Commissioning
In the event that Eskom experiences difficulties in supplying the additional
power that it agreed to do in line with its binding agreement with Ezulwini
Mining Company, the Company has installed the switchgear necessary to utilize
the existing standby diesel generators at site should they be required to
start up the new plant. Commissioning of the 2.4 MTPA gold plant commenced
on schedule and on budget during April 2008. The first 0.6 MTPA milling unit
is currently being commissioned and it is anticipated that first gold will be
loaded onto carbon during June with gold bullion produced in July 2008. The
commissioning of the second 0.6 MTPA mill is scheduled for September 2008 at
which point milling capacity will be utilized to consume existing stockpiles
while mining rates ramp up as per plan. The civil engineering work required
for the final two mills is complete and installation and the start of the
commissioning of these mills are on schedule for February 2009.
The construction of the 1.2 MTPA uranium plant is on budget and on schedule
for commissioning to commence during June of 2008. The first ADU shipments
are anticipated to be ready for dispatch during August 2008.
Mineral Resource Update
The verification of historic sampling data, the gathering of new sampling
results and the addition of new properties is expected to result in a
significant increase in the amount of verified data available to perform an
update of the previous mineral resource estimate. In addition, results from
new surface and underground drilling continue to be added to the geological
data base. It is anticipated that a revised mineral resource estimate and
updated technical report will be completed early in the Company`s fiscal
second quarter (July - September).
Sulphuric Acid Plant
As disclosed on April 21, 2008, the Company is proceeding with plans to
construct its own sulphuric acid manufacturing plant, which will utilize the
Company`s significant stores of sulphur bearing pyrite to secure a long-life
low-cost source of supply of sulphuric acid. A preliminary Company
assessment has been completed and it is anticipated that the detailed
specification and procurement study for a standard 600 tonne per day
sulphuric acid plant will be completed by the end of July 2008. The Company
anticipates that the environmental impact assessment process necessary to
secure an operating license for the acid plant will be concluded by July 2009
and has engaged the services of reputable consulting firms who are well
experienced in the design, permitting and construction of pyrite burning acid
plants in Southern Africa. First Uranium is evaluating options for financing
the acid business as a stand alone entity and discussions are underway.
"Our near-term objectives are to expand our gold production, commission our
uranium plants and generate cash," said Gordon Miller, President and Chief
Executive Officer of First Uranium. "Our long-term objective is to become
one of the world`s lowest cost uranium producers and we have met or exceeded
almost all of our target dates for project milestones along the way and, most
importantly, we have started to commission our plants on schedule. We have
also taken significant risk out of our projects by re-engineering the shaft
at Ezulwini, acquiring generators to meet our power requirements and made
plans to build an acid plant to provide a low-cost secure supply of sulphuric
acid."
Technical Disclosure
Technical disclosure in this news release relating to the tonnage of the
stockpiles has been prepared by Warren de Witt, who is a "qualified person"
under NI 43-101 and is independent of First Uranium. Mr. de Witt has
reviewed and approved the disclosure in this news release.
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
availability of electrical power, the planned addition of owner-operated
power generation, price of electrical power and sulphuric acid, the
estimation of mineral resources and reserves, the realization of estimated
pyrite content in the MWS tailings dams, 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, availability of financing on acceptable terms, 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
"goal", "objective", "plans", "expects" or "does not expect", "is expected",
"projected", "assumed", "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", "should", "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, availability of equipment, materials and fuel, 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, to price of electrical power and sulphuric acid.
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 Company`s expectations as of the date
of this news release; (ii) actual results may differ materially from the
Company`s expectations if known and unknown risks or uncertainties affect its
business, or if estimates or assumptions prove inaccurate; (iii) the Company
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 Company 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
assumption that: (i) consistent supply of sufficient power will be available
to develop and operate the projects as planned; (ii) approvals to transfer or
grant, as the case may be, mining rights will be obtained; (iii) metal
prices, exchange rates and discount rates applied in the preliminary economic
assessments are achieved; (iv) mineral resource estimates are accurate; (v)
the technology used to develop and operate its two projects has, for the most
part, been proven and will work effectively; (vi) that labour and materials
will be sufficiently plentiful as to not impede the projects or add
significantly to the estimated cash costs of operations; (vii) that Black
Economic Empowerment ("BEE") investors will maintain their interest in the
Company and their investment in the Company`s common shares to a sufficient
level to continue to support the Company`s compliance with 2014 BEE
requirements; and (viii) that 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 (TSX:FIU, JSE:FUM) is focused on the development of
its South African uranium and gold mines with the goal of becoming a
significant producer through the re-opening and underground development of
the Ezulwini Mine and the expansion of the Mine Waste Solutions tailings
recovery facility. First Uranium also plans to grow production by pursuing
value-enhancing acquisition and joint venture opportunities in South Africa
and elsewhere.
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 416 342-5639 (office), 416 558-3858 (mobile) or bob@firsturanium.ca
Date: 21/05/2008 07:52:46 Produced by the JSE SENS Department.
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