| Thu 26 Jan 2012, 15:01 | | FUM - First Uranium Corporation - Production update for the three months ended |
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FUM
FIU
FUM - First Uranium Corporation - Production update for the three months ended
December 31, 2011
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
January 26, 2012
PRODUCTION UPDATE FOR THE THREE MONTHS ENDED DECEMBER 31, 2011
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 released its
production results for the three months ended December 31, 2011 ("Q3 2012").
For Q3 2012, the Company reported a 5% decrease in gold ounces sold and a 14%
decrease in uranium produced compared to the gold ounces sold and uranium
produced in Q2 2012. The Company sold 38,548 ounces of gold in Q3 2012 compared
to 40,529 ounces of gold in Q2 2012. Uranium produced was 30,887 pounds in Q3
2012 compared to 36,006 pounds in Q2 2012.
Said CEO Deon van der Mescht:
"The third quarter proved particularly challenging from a safety and production
perspective, especially for Ezulwini Mine. The three fatal accidents in the
latter half of the 2011 calendar year had a significant negative impact on
employee morale and productivity. This is reflected in the lower than
anticipated production figures which in turn necessitated the restructuring of
the Ezulwini Mine in order to secure the future of this operation."
SUMMARY OF Production Results
The following table summarizes the production from each operation during Q3
2012, compared to the previous quarters in FY 2012:
2012 YTD Q3 2012 Q2 2012 Q1 2012
MWS
Tonnes of ore reclaimed (000s) 14,833 5,107 4,822 4,903
Average gold head grade (g/t) 0.325 0.319 0.348 0.309
Gold plant recovery (%) 49% 51% 51% 44%
Gold sold (oz) 74,141 25,142 27, 453 21,546
Ezulwini Mine
Tonnes of ore milled 474,914 148,072 162, 577 164,265
Average gold recovery grade
(g/t) 2.58 2.40 2.53 2.79
Gold sold (oz) 39, 374 13, 406 13, 076 12,892
Uranium produced (lbs) 87,254 30,887 36,006 20,361
Abbreviation Period Abbreviation Period
Q1 2012 April 1, 2011 - Q1 2011 April 1, 2010 -
June 30, 2011 June 30, 2010
Q2 2012 July 1, 2011 - Q2 2011 July 1, 2010 -
September 30, September 30,
2011 2010
Q3 2012 October 1, 2011 - Q3 2011 October 1, 2010 -
December 31, 2011 December 31, 2010
Q4 2012 January 1, 2012 - Q4 2011 January 1, 2011 -
March 31, 2012 March 31, 2011
2012 YTD April 1, 2011 - 2011 YTD April 1, 2010 -
December 31, December 31,
2011 2010
FY 2012 April 1, 2011 - FY 2011 April 1, 2010 -
March 31, 2012 March 31, 2011
FY 2013 April 1, 2012 - Q1 2013 April 1, 2012 -
March 31, 2013 June 30, 2012
EZULWINI MINE
Following two fatal accidents in August and September 2011, the mining team
managed to build good production momentum into late October and early November,
but on November 14, 2011 the mine regrettably suffered another fatal accident as
a result of a fall of ground. This resulted in a mandatory stoppage which
although necessary, had the effect of undermining the progress that had been
made to that point.
As a result, in Q3 2012 gold ounces sold by the Ezulwini Mine improved only
slightly (3%) compared to Q2 2012 and uranium production was 14% down compared
to Q2 2012.
As previously reported, the Ezulwini Mine has been the subject of an intensive
turn-around process during the past nine months. Management has devoted
significant resources to helping the operation achieve the production levels
necessary for it to be sustainable. The expected improvement in production did
not however materialize, primarily as a consequence of the extremely unfortunate
fatal accidents in the latter half of the calendar year which impacted
negatively on morale. As a consequence, on December 19, 2011, management
announced a planned restructuring in accordance with Section 189A and 189 of The
South African Labour Relations Act and, at the same time, stopped mining of all
marginal production panels. The new operating plan may result in up to 1850 jobs
being affected. The consultation process with organized labour is well underway
and management hopes to conclude the process within the mandatory 60-day period.
Although the new operating plan is not yet completed, it is clear that the
Ezulwini Mine will not achieve its previously disclosed target of between 70,000
to 80,000 ounces of gold sold and uranium sales of between 110,000 and 130,000
pounds for FY 2012.
In previous updates, the Ezulwini Mine reported on various business development
initiatives aimed at leveraging the available capacity of the gold and uranium
plant infrastructure, including the uranium concentrate float plant project and
possible toll treatment of third party ore. Given the current restructuring of
operations at the mine and within First Uranium as a whole, all business
development initiatives of this type have been placed on hold for future review.
The revised business plan is being designed to optimize cash flow and result in
the overall profitability of Ezulwini.
MINE WASTE SOLUTIONS
At MWS, the 6% quarter on quarter improvement in throughput was offset by a
lower delivered feed grade which decreased by 8% from 0.348g/t in Q2 2012 to
0.319g/t in Q3 2012.
The first of MWS`s three gold modules processes material from the higher grade
Buffelsfontein No. 2 tailings dam as well as Buffelsfontein No. 3 tailings dam.
The planned contribution from the high grade Buffelsfontein No. 2 tailings dam
was not realised, primarily due to the inability to reclaim the remnant
footprint material at the desired rate with the knock on effect of an altered
mining mix with a lower delivered feed grade. This lower-grade mining mix is
anticipated to continue until the end of Q4 2012, by which time process
improvements designed to enhance recoveries and mitigate the impact of a lower
grade, will have been implemented.
The second gold module is performing well and this performance is expected to
continue for the remainder of FY 2012 and into FY 2013.
The third gold module processes material from the Hartebeesfontein No. 1
tailings dam which as previously reported has posed some challenges in terms of
lower than planned grade as well as material particle size. By blending the
Hartebeesfontein No. 1 tailings dam material with material from higher grade
remote satellite dams, the overall grade delivered to the third gold module as
well as recovery performance has been preserved, albeit at slightly below
planned grade. During Q3 2012 however, the required contribution from the remote
satellite dams was not fully realized which impacted negatively on grade
delivered and hence gold production. The requisite contribution from the remote
satellite dams can be sustained until the end of FY 2012 where after process
improvements are required to maintain circuit performance and preserve gold
production. Test work is currently underway to deal with this challenge and is
expected to continue into Q1 2013.
As a result of the challenges encountered with the first and third gold modules,
guidance for gold production for FY 2012 has been downgraded from a range of
105, 000 ounces and 115, 000 ounces to between 98,000 ounces and 100,000 ounces.
MWS PERMITTING
As reported in the Company`s news release issued on January 4, 2012, the South
African Water Tribunal dismissed an appeal by a local pressure group, the
Federation for a Sustainable Environment, against the issuing of MWS`s Water Use
Licence and the Tribunal has closed its file on the matter. While MWS is
operating legally in terms of current authorizations and legislation,
discussions with the DMR continue regarding the new order mining right for MWS.
CASH RESOURCES
As at December 31, 2011, the cash reserves of the Company were US$10.6 million.
About First Uranium Corporation
First Uranium Corporation (TSX:FIU, JSE:FUM) is focused on its goal of becoming
a low-cost producer of gold and uranium through the expansion of the underground
development to feed the gold and uranium plants at Ezulwini Mine and through the
expansion of the plant capacity of the Mine Waste Solutions (MWS) tailings
recovery facility, both operations situated in South Africa.
For further information, please contact:
Scot Sobey, scot.sobey@firsturanium.com
Tel: +27 82 786 1039
Gail Strauss, gailstrauss@mweb.co.za
Tel: +27 82 936 8481
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 are forward-looking statements (or forward-looking
information). The Company`s plans involve various estimates and assumptions and
its business and operations are subject to various risks and uncertainties. For
more details on these estimates, assumptions, risks and uncertainties, see the
Company`s most recent Annual Information Form and most recent Management
Discussion and Analysis 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
Date: 26/01/2012 15:01:41 Produced by the JSE SENS Department.
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