| Thu 8 Oct 2009, 13:47 | | FUM - First Uranium Corporation - First Uranium Reports On Production For |
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FUM
FIU
FUM - First Uranium Corporation - First Uranium Reports On Production For
Quarter Ended September 30, 2009
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 REPORTS ON PRODUCTION FOR QUARTER ENDED SEPTEMBER 30, 2009
REPORTS RECORD GOLD PRODUCTION OF 21,374 OUNCES;
44% HIGHER THAN PREVIOUS QUARTER
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
during the quarter ended September 30, 2009 ("Q2 2010") the Company produced
7,952 ounces of gold from the Ezulwini Mine, a 110% percent increase compared
to the previous quarter, and 13,422 ounces of gold from the Mine Waste
Solutions tailings recovery project ("MWS"), a 22% increase compared to the
previous quarter. During the quarter, the Company also continued to optimize
its uranium production and has now sent two batches of uranium in the form of
"yellowcake" (ammonium diuranate) for processing in South Africa.
"We believe that the best way for us to deliver value to our shareholders is
to meet our near-term production and cost targets," commented Gordon Miller,
President and CEO of First Uranium. "By the end of this fiscal year in March
2010 we expect to be completing our capital expansion program and generating
positive free cash flow from both operations."
Milestones achieved at the Ezulwini Mine during the last quarter include:
- completion of the low-grade de-stress cut in the Upper Elsburg ("UE")
gold-only ore body, which opens up mining of the high-grade ore in the
shaft pillar;
- significant underground development to meet our production targets.
Production stopes mined during Q2 2010 were as follows:
- the workable face length in the UE gold-only ore body was 654 metres
at a grade of 5.55 grams per tonne inclusive of low-grade waste rock
from the de-stress cut; and
- the workable face length for the Middle Elsburg ("ME") co-product
gold and uranium ore body was 444 metres at a gold grade of 4.04
grams per tonne and a uranium grade of 679 grams per tonne.
- the gold plant continues to run at design specifications;
- production at the recently commissioned uranium plant is being optimized
and beginning to run at design specifications; and
- a second dispatch of yellowcake was delivered to the local calcining
plant, building up an inventory of yellowcake for conversion and sale to
a nuclear power utility.
At MWS, commissioning of the second gold plant module (Phase 1B) is complete.
The Phase 1A gold plant is operating at design specifications, achieving a
recovery rate of 50% during the month of September 2009. MWS is expected to
increase gold recovery rates for the balance of the year and more than double
its low-cost gold production during this quarter ending December 2009 to an
annualized production rate of approximately 100,000 ounces per annum.
At MWS, construction of the third gold plant module (Phase 2) and third stream
of the flotation plant is proceeding on schedule for completion by June 2010.
The following table summarizes the production from each operation during Q2
2010. Production from the previous four quarters has been included for
comparison purposes.
Quarterly Production Results
Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010
Ezulwini
Total tonnes of ore 44,014 80,079 108,622 92,468 94,599
milled
Gold produced (oz) 124 6,411 4,267 3,791 7,952
Gold sold (oz) 124 6,411 4,267 3,379 7,047
MWS
Tonnes of ore reclaimed 1,839 1,798 1,693 1,835 2,476
(000s)
Average gold head grade 0.41 0.42 0.41 0.42 0.39
(g/t)
Gold plant recovery (%) 49% 50% 47% 44% 44%
Gold reclaimed (oz) 11,821 12,235 10,513 11,007 13,422
Gold sold (oz) 12,118 12,581 10,417 10,676 11,739
Outlook - Ezulwini Mine
At the Ezulwini Mine, the near-term milestones that are expected to drive the
planned increases in gold and uranium production include:
- the continued development of workable face length with grades of gold and
uranium that are at or above the economic cut off of the ore mined;
- shipping the first uranium for conversion, which will mark the Company`s
first sale of uranium; and
- achieving positive free cash flow for the quarter ended December 31,
2009.
The underground development of mining faces at economic grades of uranium and
gold are the key to the success of the operation and are dependent upon
favourable exchange rates and metal prices. Although the price of gold in US
dollars rose above $1,000 in September, with the strengthening of the South
African rand against the U.S. dollar, the price of gold in rand terms declined
during the quarter. In this currency environment, the management team at the
Ezulwini Mine has decided to temporarily focus its mining efforts on fewer,
but higher-grade gold areas and, as a result, gold margins are expected to
improve, but production is expected to decline. Until the rand gold price
improves, the Company will continue to focus on higher-grade areas.
First Uranium has, in the following table, set new forecasts for face length
development, anticipated blasted face grade and kilograms per face length
metre to help investors understand the planned underground mine development
rate.
Ezulwini Mine: Underground Production Forecast
Q1 2010 Q2 2010 Q2 2010 Q3 2010 Q4 2010
Actual Forecast Actual Forecast Forecast
Upper Elsburg Mining
Activity
Metres of mining face 369 600 605 749 1,856
Blasted face grade - gold 4.66 6.71 7.79 6.43 6.89
(g/t)
Middle Elsburg Mining
Activity
Metres of mining face 408 575 754 1,131 1,752
Blasted face grade - gold 2.95 2.74 3.13 3.06 3.48
(g/t)
Blasted face grade - 480 500 439 552 597
uranium (g/t)
Facelength ("FL") Buildup
Gold (kg/m of FL blasted) 15 24 28 75 86
Uranium (kg/m of FL 1,077 1,206 1,377 3,328 5,373
blasted)
Mill Production (combined)
Tonnes of ore milled 92 145 95 145 338
(000s)
Notes:
1. Face-length buildup is a metric to indicate the content of gold and
uranium produced for a horizontal metre of blasted face length.
2. The current mining rate is not expected to immediately fill the
uranium and gold plants that have production capacities of 100,000 tonnes
per month and 200,000 tonnes per month, respectively.
3. A minimum three-month delay is expected between uranium production and
sales, allowing time for calcining, shipment and conversion.
4. Q2 grades for the Upper Elsburg ore body include grade dilution from
the low-grade shaft pillar de-stress cut.
5. The anticipated increase in stope grades has been determined on the
basis of current in situ sampling of reef development and sampling of new
stopes that are being opened up.
6. The forecast face length represents the amount of face length
available for mining, not necessarily what will be mined.
Outlook - MWS
The first two uranium plant modules, which form part of the phase 1B expansion
project, are expected to be completed by the end of December 2009. As
previously announced, management has deferred construction of the final and
third uranium plant module, until uranium prices improve.
MWS: Tailings Recovery and Production Forecast
Q1 2010 Q2 2010 Q2 2010 Q3 2010 Q4 2010
Actual Forecast Actual Forecast Forecast
Tonnes of ore reclaimed 1,835 3,200 2,476 3,880 3,796
(000s)
Average gold head grade 0.42 0.40 0.39 0.39 0.38
(g/t)
Gold plant recovery (%) 44% 50% 44% 51% 55%
Gold reclaimed and sold 10,676 18,000 11,739 25,019 25,477
(oz)
Tonnes of uranium ore - - - - 395
reclaimed (000s)
Average uranium - - - - 337
concentrate grade feeding
the plant(g/t)
Uranium plant recovery (%) - - - - 75%
Uranium reclaimed (lb) - - - - 144,541
Notes:
1. The increase in gold recoveries is possible through the introduction
of gold concentrates into the uranium plant where exposure of material to
an acidic environment liberates additional gold that would otherwise not
be available for cyanidation.
2. The average uranium concentrate grade is a derived number as the plant
feed is expected to be ore from a variety of sources, only some of which
will be concentrated in the flotation process.
3. Due to plant commissioning, the uranium production ramp up in Q4 2010
is expected to be 60%, 70% and 80% of plant capacity for January 2010,
February 2010 and March 2010, respectively.
Gordon Miller further commented, "By the end of December 2009, we expect to:
- commence uranium production at MWS;
- conclude our first sale of uranium from Ezulwini;
- finalize a contract to supply uranium to Eskom, the South African power
utility; and
- finalize arrangements for a debt facility with a South African bank."
About First Uranium Corporation
First Uranium Corporation (TSX:FIU, JSE:FUM) is focused on its goal of
becoming a significant low-cost producer of uranium and gold through the
expansion of the underground development to feed the new uranium and gold
plants at the Ezulwini Mine and through the expansion of the plant capacity of
the Mine Waste Solutions tailings recovery facility, both operations situated
in South Africa. First Uranium also plans to grow production by pursuing
value-enhancing acquisition and joint venture opportunities in South Africa
and elsewhere.
For further information, please contact:
Bob Tait, Vice President, Investor Relations at bob@firsturanium.ca
+1 416 342-5639 (office) or +1 416 558-3858 (mobile)
1240-155 University Avenue, Toronto, ON M5H 3B7
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 the timing and amount of estimated future production,
processing and development plans and future plans and objectives of First
Uranium are forward-looking statements (or forward-looking information) that
involve various estimates, assumptions, risks and uncertainties. For more
details on these estimates, assumptions, risks and uncertainties, see the
Company`s most recent Annual Information Form on file with the Canadian
provincial securities regulatory authorities on SEDAR at www.sedar.com. 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.
8 October 2009
Sponsor: Investec Bank Limited
Date: 08/10/2009 13:47:01 Produced by the JSE SENS Department.
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