| Mon 1 Dec 2008, 8:45 | | FUM - First Uranium Corporation - First Uranium Signs Definitive Agreement |
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FUM
FIU
FUM - First Uranium Corporation - First Uranium Signs Definitive Agreement
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
NEWS RELEASE - November 28, 2008
FIRST URANIUM SIGNS DEFINITIVE AGREEMENT
WITH GOLD WHEATON BARBADOS CORPORATION
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 signed a definitive agreement with Gold Wheaton (Barbados) Corporation
("GW"), a wholly-owned subsidiary of Gold Wheaton Gold Corp., in respect of
the previously announced transaction (the "Transaction") whereby GW will
purchase 25 percent of the estimated 2.1 million ounces of life-of-mine gold
production from the Company`s Mine Waste Solutions tailings recovery
operation ("MWS") in South Africa.
Application for approval of the Transaction will be submitted to the South
African Reserve Bank and the South African Revenue Service. Upon receipt of
proof of such approvals, GW will pay $50 million (the "First Payment") into
an escrow account (pursuant to a mutually acceptable escrow agreement). The
funds will be released from escrow upon satisfaction of the closing
conditions, including: registration of a notarial bond on certain of the MWS
tailings dam and a pledge of 25 percent of the gold produced from MWS.
Closing of the Transaction is expected on or before December 12, 2008.
Under the terms of the Transaction, in addition to the First Payment, GW
shall pay First Uranium:
- subject to financing, a further $75 million (the "Second Payment") three
months following the closing of the Transaction;
- an ongoing payment equal to the lesser of $400 per ounce (subject to an
annual inflation adjustment of 1.01 percent, starting in the fourth year
after the First Payment) and the prevailing spot price, for each ounce of
gold delivered under the contract ;
- if the Second Payment is not paid, the gold stream transaction shall be
reduced to 10% and appropriate credits made.
"This transaction has received a very positive response from our shareholders
as it will strengthen our balance sheet as we add uranium production to our
gold production at both operations," said Gordon Miller, President and CEO of
First Uranium. "This transaction also highlighted the value of our
substantial co-product gold production."
First Uranium has agreed to a deliver a minimum of 20,000 ounces of gold into
the Transaction during calendar year 2009. 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 MWS or the Company`s Ezulwini
Mine.
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
1 December 2008
Sponsor: Investec Bank Limited
Date: 01/12/2008 08:45:58 Produced by the JSE SENS Department.
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