| Tue 23 Mar 2010, 8:17 | | FUM - First Uranium Updates Ezulwini Mine Technical Report |
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FUM
FIU
FUM - First Uranium Updates Ezulwini Mine Technical Report
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 UPDATES EZULWINI MINE TECHNICAL REPORT
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") has updated its
Preliminary Assessment technical report for the Ezulwini Mine in South Africa.
The revised base case economic valuation for Ezulwini yields a net present
value ("NPV") of $437 million, at an 8% discount rate, and an internal rate of
return ("IRR") of 524% based on the following broad assumptions:
- a mineral resource estimate unchanged from January 2009, except for the
deduction of production, including a combined measured and indicated
mineral resource estimate of 13.8 million tonnes grading 6.16 grams per
tonne of gold including 4.4. million tonnes grading 5.36 grams per tonne
of gold and 0.074% uranium, estimated to contain 2.7 million ounces of
gold and 7.0 million pounds of uranium;
- an inferred mineral resource estimate of 159 million tonnes grading 5.0
grams per tonne of gold, including 113 million tonnes grading 4.8 grams
per tonne and 0.076% uranium, estimated to contain 25.5 million ounces of
gold and 188.7 million pounds of uranium;
- with reduced maximum annual production rates, the end of the current mine
plan has been extended from 2025 to 2028;
- an average realized gold price of $874 per ounce;
- an average realized price for uranium of $51 per pound; and
- a foreign exchange rate of the US dollar in South African rand assumed to
average ZAR7.60/US$.
The economic model for the updated technical report was used to calculate the
peak funding requirements disclosed in regard to the refinancing of C$150
million as announced on March 12, 2010.
Site Infrastructure
The major assets and facilities at the Ezulwini Mine include:
- gold resources within and beyond the main shaft pillar in the Upper
Elsburg ore body and gold and uranium resources within the Middle Elsburg
ore body;
- hoisting and ventilation shafts to surface including the associated
facilities and underground shafts to access the resources;
- mine development to and within the resource areas;
- mine and surface infrastructure including the hoisting plants, mine
dewatering system, compressed air system, electrical power distribution
system, workshops and offices;
- a 100,000 tpm capacity gold ore grinding circuit and a 200,000 tpm gold
ore leach circuit which has been commissioned; and
- a 100,000 tpm uranium plant that is being commissioned and has dispatched
its first shipment to a converter, along with one 50,000 tpm grinding
line in operation and a second 50,000 tpm grinding line installed but not
yet commissioned.
The Ezulwini Mine has been producing gold since July 2008 and in the fiscal
quarter ended December 31, 2009 produced 10,285 ounces. In addition, the
Ezulwini Mine has now shipped to an overseas convertor the mine`s first
container of uranium (23,760 pounds) and expects to record approximately 95%
of that shipment as uranium sales in the current fiscal quarter.
Economic and Commodity Price Assumptions
The following tables show the commodity price assumptions used in the January
2009 technical report and the current technical report.
Table 1: JANUARY 2009 ECONOMIC AND COMMODITY PRICE ASSUMPTIONS
Technical report 2010 2011 2012 2013 2014 2015
January 2009
Spot gold (US$/oz) 999 957 881 835 748 748
Uranium (US$/lb) 93 84 79 70 52 52
ZAR/US$ 8.14 8.46 8.63 9.66 8.95 8.95
Note: Years indicate the Company`s fiscal years that end on March 31st of each
year shown.
Table 2: MARCH 2010 ECONOMIC AND COMMODITY PRICE ASSUMPTIONS
Technical report 2010 2011 2012 2013 2014 2015
March 2010
Spot gold (US$/oz) 1,100 1,000 1,000 1,000 900 900
Uranium (US$/lb) 50 55 65 70 60 50
ZAR/US$ 7.30 9.00 9.50 7.50 7.50 7.50
Notes:
1. Years indicate the Company`s fiscal years that end on March 31st of each
year shown.
2. There is 7% of gold production which is committed to be sold at $400/oz
in this period.
Revised Project Economics
The following tables summarize the project economics for the Ezulwini Mine.
The current economic results estimated for the Ezulwini Mine have decreased
significantly from January 2009. The key changes relate to the projection for
cost inflation from 2011 to 2013, higher electrical power costs, lower
productivity assumptions for the next six months and the strengthening of the
value of the South African rand versus the US dollar.
More details of the project economics from the financial models, upon which
the information in Table 3 is based, will be posted to the Company`s web site
(www.firsturanium.com) in due course.
Table 3: REVISED PROJECT ECONOMICS FOR THE EZULWINI MINE
January 2009 March
2010
Life of mine average operating
costs
Operating cost per tonne milled $64.90 $106.42
($/tonne)
Gold cash cost ($/ounce) - co- $241 $619
product in 2009; net of uranium
credit in 2010)
Capital expenditures ($ $276 $246
millions)
Average annual life of mine
production
Uranium (pounds) 1,084,000 781,000
Gold (ounces) 341,000 283,000
NPV ($ millions) $924 $437
IRR 398% 524%
Notes:
1. In the January 2009 technical report gold and uranium unit costs were
calculated as co-product costs which assume that operating cash costs are
split in proportion to the revenue earned from each product.
2. In the March 2010 technical report the gold unit cost was calculated with
uranium as a byproduct as uranium is only expected to represent
approximately 14% of the revenue. Uranium unit costs were not shown as
uranium will be assumed as a byproduct of the gold production.
3. NPV is calculated using a real discount rate of 8%.
Table 4: EZUWLINI MINE DECEMBER 2009 MINERAL RESOURCE STATEMENT SUMMARY
Gold Uranium
Tonnage Content
Grade Content
Category (000 t) (g/t) (000 ozs) (000 lbs)
Measured Resource 3,646 6.80 799 2,242
Indicated Resource 10,372 5.90 1,968 4,876
Less production 183 25 167
from Resources
Measured and 13,845 6.16 2,743 6,950
Indicated Resource
Inferred Resource 158,681 5.00 25,512 188,695
Notes:
1. CIM definitions were followed for mineral resources.
Mineral resources were estimated at a cut-off grade of 4.0 g/t Au for the
2. Upper Elsburg ore body and 3.0 g/t for the Middle Elsburg ore body.
3. Uranium will only be processed from the Middle Elsburg ore body, where
grade estimates are 0.067% in the Measured category, 0.077% in the
Indicated category and range from 0.075% to 0.088% in the Inferred
category.
4. Mineral resources were estimated using an average long-term gold price of
$775 per ounce, $56 per pound U3O8 and a US$/R exchange rate of 7.0.
5. A minimum mining width of 1.0 metres was used.
6. Mineral resources that are not mineral reserves do not have demonstrated
economic viability.
7. The full resource statement is included in Table 17-1 of the March 2010
technical report.
8. Numbers may not add due to rounding.
For more information see the Technical Report Preliminary Assessment of the
Ezulwini Project, Gauteng Province, Republic of South Africa, dated March 22,
2010 and filed on SEDAR on March 22, 2010.
Technical Disclosure
All technical disclosure in this news release relating to the Ezulwini Mine
has been prepared in accordance with NI 43-101 by R. Dennis Bergen, P.Eng and
Wayne Valliant, P.Geo of Scott Wilson Roscoe Postle Associates Inc. ("Scott
Wilson RPA") each of whom is a "qualified person" under NI 43-101 and is
independent of First Uranium.
Historical technical information is this news release relating to the Ezulwini
Mine is extracted from previous technical reports. The most recent of these
was entitled "Technical Report - Preliminary Assessment of the Ezulwini
Project, Gauteng Province, Republic of South Africa" submitted on January 5,
2009 prepared in accordance with NI 43-101 by Messrs. Bergen and Valliant, who
have also reviewed and approved the disclosure in this news release.
The economic analysis contained in this news release 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 interpretations and conclusions of this
Preliminary Assessment, or reserve development, production and economic
forecasts on which this Preliminary Assessment is based, will be realized.
NON-GAAP MEASURES
The Company believes that in addition to conventional measures prepared in
accordance with Canadian GAAP, the Company and certain investors and analysts
use certain other non-GAAP financial measures to evaluate the Company`s
performance including its ability to generate cash flow and profits from its
operations. The Company has included certain non-GAAP measures throughout this
document. Non-GAAP measures do not have any standardized meaning prescribed
under Canadian GAAP, and therefore they may not be comparable to similar
measures employed by other companies.
The data is intended to provide additional information and should not be
considered in isolation or as a substitute for measures of performance
prepared in accordance with Canadian GAAP.
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.
23 March 2010
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 availability, refinancing transaction, operating and
capital cost estimates, resource estimates, metal prices, exchange rates,
discount rates, the timing and receipt of required permits, 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
and Management`s Discussion and Analysis on file with the Canadian provincial
securities regulatory authorities on SEDAR at www.sedar.com. No assurance can
be given that the refinancing transaction will be concluded. 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.
Date: 23/03/2010 08:17:01 Produced by the JSE SENS Department.
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