| Wed 5 Nov 2008, 7:52 | | FUM - First Uranium Enters Into Letter Of Intent With Gold Wheaton Barbados |
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FUM
FIU
FUM - First Uranium Enters Into Letter Of Intent With Gold Wheaton Barbados
Corporation
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 ENTERS INTO LETTER OF INTENT
WITH GOLD WHEATON BARBADOS CORPORATION
Gold stream transaction monetizes 25 percent of
gold production from MWS operation
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 that it
has entered into a letter of intent with Gold Wheaton (Barbados) Corporation
("GW"), a wholly-owned subsidiary of Gold Wheaton Gold Corp., whereby GW will
purchase 25 percent of the estimated 2.1 million ounces of the life-of-mine gold
production from the Company`s Mine Waste Solutions tailings recovery operation
("MWS") in South Africa (the "Transaction"). Subject to certain conditions and
approvals, the Transaction is expected to close in late November 2008.
Under the terms of the Transaction, GW shall pay First Uranium:
- $125 million, payable as follows:
- $50 million on or before November 28, 2008 (the "First Payment"); and
- subject to financing, $75 million on or before February 27, 2009 (the
"Second Payment");
- an ongoing payment equal to the lesser of $400 per ounce and the prevailing
spot price (subject to an annual inflation adjustment of 1 percent,
starting in the fourth year after the First Payment);
- if the Second Payment is not paid, the gold stream transaction shall be
reduced to 10% and appropriate credits made.
GW will not be required to contribute to any capital or exploration expenditures
in respect of First Uranium`s tailings recovery operation. Provided that the
Second Payment is paid, GW will be granted a right of first refusal on any
future gold stream agreements or similar arrangements proposed to be entered
into by First Uranium or its subsidiaries in respect of the Mine Waste Solutions
Project or the Ezulwini Mine.
"This transaction highlights the value of our substantial co-product gold
production," said Gordon Miller, President and CEO of First Uranium. "The
proceeds from this transaction also strengthen our balance sheet as we
transition from mine developer to uranium and gold producer and allows us to
focus on our long-term growth strategy."
Closing of this transaction is subject to the execution of definitive
documentation, receipt of all required governmental and regulatory approvals,
third-party consents, Board approvals and acceptance by the Toronto Stock
Exchange.
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 production and development plans 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 conclusions of
the pre-feasibility study on MWS; the actual results of additional construction
and development activities at MWS; the timing and amount of estimated future
production and the costs thereof; capital expenditures; the availability of any
additional capital required to bring future projects into production; 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 Annual Information Form dated
June 24, 2008 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 (TSX:FIU, JSE:FUM) is focused on the development of
its South African uranium and gold mines with the goal of becoming a significant
low-cost producer through the re-opening and underground development of the
Ezulwini Mine and the expansion of the Mine Waste Solutions tailings recovery
operation. 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
Sponsor:Investec Bank Limited
Date: 05/11/2008 07:52:01 Produced by the JSE SENS Department.
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