| Fri 6 Aug 2010, 19:47 | | FUM - First Uranium announces financial results fo |
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FUM
FIU
FUM - First Uranium announces financial results for the three months ended June
30, 2010
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 Announces Financial Results For the Three Months Ended June 30,
2010
Management Discussion & Analysis is appended to this release.
For Financial Statements see the Company`s website at www.firsturanium.com.
All amounts in US dollars unless otherwise noted
Summary
- Mine Waste Solutions revenue increased 131% over Q1 2010
- Ezulwini Mine revenue increased 435% over Q1 2010
- Gross profit totaled $6.8 million, up from loss of $3.9 million in Q1 2010
- Net loss totaled $12.0 million, versus loss of $33.3 million in Q1 2010
- Cash reserves totaled $102.6 million at June 30, 2010
Toronto and Johannesburg - August __, 2010 - First Uranium Corporation (TSX:FIU,
JSE:FUM) ("First Uranium" or "the Company") today announced it`s financial
results for the three months ended June 30, 2010 ("Q1 2011").
Revenue generated by the Company`s two operations in Q1 2011 totaled $39.7
million, up from $12.9 million during the three months ended June 30, 2009 ("Q1
2010"). The Mine Waste Solutions ("MWS") tailings operation accounted for
revenue of $22.4 million, an increase of 131% from Q1 2010. The gain principally
resulted from a 65% increase in gold production made possible by a second gold
plant module being in operation. At the Ezulwini underground mine, revenue
increased by 435% to $17.3 million. This gain was driven by increased
production, grades and improved efficiencies.
Table 1 summarizes financial results of Q1 2011. Data from Q1 2010 has been
included for comparison.
Table 1 - Consolidated Financial Results
Operational Summary Q1 2011 Q1 2010 %Chang
e
MWS
Average gold selling price per $1,064 $905 18%
ounce
Average cash cost per ounce of (449) (338) (33%)
gold sold (a)
Average cost per ounce sold (515) (367) (40%)
Ezulwini Mine
Average gold selling price per 1,197 957 25%
ounce
Average cash cost per ounce of (1,430) (3,545) 60%
gold sold (a)
Average cost per ounce of gold (1,545) (3,818) 60%
sold
Average uranium selling price 41 - n/a
per pound
Financial Summary
Revenue 39,661 12,895 208%
MWS 22,357 9,662 131%
Ezulwini Mine 17,304 3,233 435%
Cost of sales (excluding (29,946) (15,584) 92%
amortization)
MWS (9,434) (3,610) (161%)
Ezulwini Mine (20,512) (11,974) (71%)
Amortization (2,962) (1,236) (140%)
MWS (1,391) (312) (346%)
Ezulwini Mine (1,571) (924) (70%)
Gross profit (loss) 6,753 (3,925) 272%
MWS 11,532 5,740 101%
Ezulwini Mine (4,779) (9,665) 51%
Other income 776 280 177%
Other expenditures(b) (10,351) (6,799) (52%)
Operating loss(c) (2,822) (10,444) 73%
Investment income 203 706 (71%)
Foreign exchange gain (loss) 3,891 (16,408) 124%
Accretion expense on asset (388) (492) 21%
retirement obligations
Fair value loss on derivative (4,022) (477) (742%)
liabilities
Interest and accretion expenses (8,605) (3,558) (142%)
Loss before income taxes (11,743) (30,673) 62%
Income tax charge (282) (2,591) 89%
Loss for the period (12,025) (33,264) 64%
Other comprehensive loss (32) - n/a
Comprehensive loss for the (12,057) (33,264) 64%
period
Loss per common share $(0.07) $(0.22) 68%
Notes:
a. Total cash costs per ounce is a non-GAAP measurement and investors are
cautioned not to place undue reliance on it and are advised to read all
GAAP accounting disclosures presented in the Financial Statements.
b. Other expenditures include general, consulting and administrative
expenditures, pumping feasibility and rehabilitation costs, stock-based
compensation and non-production related amortization. See page 3 to the
Financial Statements for detail.
c. This is a non-GAAP measurement. Operating loss is loss before interest
income, interest and accretion expenses, fair value gain or loss on
derivative liability, foreign exchange gain or loss on translation and
income tax charges. See page 3 to the Financial Statements for more detail.
First Uranium`s gross profit from operations totaled $6.8 million, a substantial
improvement over the loss of $3.9 million in Q1 2010. The turnaround was
primarily attributable to additional profits generated from the second gold
module at MWS, together with reduced losses at Ezulwini resulting from improved
gold production during the ramp-up phase.
The Comprehensive loss for Q1 2011 was $12.1 million (7 cents/share), compared
to a loss of $33.3 million (22 cents per share) in Q1 2010.
First Uranium ended the quarter with cash and cash equivalents totaling $102.6
million, up from $10.2 million at March 31, 2010. The increase resulted from
the Company`s recapitalization initiative, concluded during Q1 2011. The
initiative saw a total of $141.5 million of cash raised (net of transaction
costs) through an offering of secured convertible notes due March 31, 2013.
Debt at June 30, 2010 totaled $308.7 million, up from $169.5 million at March
31, 2010.
In addition to the Cdn$150 million Notes issued, the Company settled its $22.6
million outstanding facility with Simmer & Jack (including accrued and unpaid
interest) with the issue of 167,812 Rand Notes to Simmer & Jack and also settled
the completion penalty obligation to GW pursuant to the MWS Gold Stream
Transaction with the issuance of 14 million common shares in First Uranium
valued at $18.2 million to GW and a commitment by the Corporation to complete
construction of the third gold plant module at MWS and satisfaction of the
technical completion tests prior to September 1, 2011.
Correction
Subsequent to the news release of First Uranium`s Q1 2011 production dated July
29, 2010, an error was found in the indicative Net Present Value (NPV) reported
in Table 3 of the release. The error was in the calculation of the updated NPV
for the indicative Ezulwini LOM at both sets of commodity prices. The NPV using
a discount rate of 8% for the Ezulwini LOM under the column titled "March 2010"
was correctly stated at $437 million. The updated NPV for the indicative
Ezulwini LOM plan under the column titled "July 2010 at March 2010 consensus
commodity prices" should have been $331million, and in the last column the NPV
should have been $586 million using the latest consensus commodity prices. This
error did not have an impact on any other information provided in the news
release or updated LOM. We apologize for any inconvenience, and an amended
spread sheet is available on our website.
Outlook
First Uranium`s new management and board of directors, which were appointed in
April, 2010, are implementing a low-cost growth strategy that seeks to
profitably expand output at both the Company`s operations. The strategy was
approved following the completion of a wide-ranging initiative aimed at
optimization of costs across the Company. This new strategy is focused on
preserving First Uranium`s cash reserves, while enabling the Company to execute
on its capital program and achieve business milestones.
At MWS, management anticipates that remaining capital program, comprising the
third gold plant module and new tailings storage facility plus adjoining
infrastructure, will be concluded by May 2011. Certain construction contracts
have been restructured to fixed price contracts with fixed timelines to manage
project costs and schedules.
"The aim of our growth plan at MWS is to continue profitable growth while
reducing peak funding requirements, and to meet the GW completion tests without
compromising project sustainability or efficiency," said Deon van der Mescht,
President and CEO.
First Uranium has also completed a new ramp-up plan for the Ezulwini Mine. The
program calls for incremental production build-up of approximately 320 ounces
(10 kilograms) of gold per month until the end of FY 2013, requiring development
of an additional three panels available for production per month to be added to
production.
On the basis of the plan for year one (FY 2011), management expects Ezulwini to
be cash flow positive after the completion of capital expenditures in Q4 2011 at
current economic assumptions.
"While our plan for Ezulwini is ambitious and challenging," said Mr. van der
Mescht. "we believe it`s also realistic and achievable, and it`s a top priority
for the Company."
He added that current operations and capital programme are expected to be funded
with a combination of operating cash flow and cash reserves.
Technical Disclosure
All technical disclosure in this news release relating to the Ezulwini Mine has
been prepared in accordance with National Instrument 43-101 by or under the
supervision of Mark Glasspool, an employee of the Company who is a professional
engineer and is a "qualified person" under NI 43-101.
All technical disclosure in this news release relating to MWS has been prepared
in accordance with National Instrument 43-101 by or under the supervision of Jim
Fisher, an employee of the Company, who is a Chartered Engineer and is a
"qualified person" under NI 43-101.
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 located in South Africa.
Contact Information
Jim Fisher
Executive Vice President, Corporate Development
1-416-342-5636
1240-155 University Avenue
Toronto, Ontario, Canada
M5H 3B7
jim@firsturanium.ca
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.
www.firsturanium.com
06 August 2010
Sponsor: Investec Bank Limited
Date: 06/08/2010 07:47:01 Produced by the JSE SENS Department.
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