| Thu 26 Jan 2012, 15:02 | | MWNT - Mine Waste Solutions (Proprietary) Limited - News Release - 26 |
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JSE MWNT
MWNT
MWNT - Mine Waste Solutions (Proprietary) Limited - News Release - 26
January 2012
Mine Waste Solutions (Proprietary) Limited
(Incorporated in the Republic of South Africa)
(Registration number 2000/1443/07)
(a wholly-owned subsidiary of First Uranium Corporation)
JSE code MWNT ISIN: ZAE000156261
NEWS RELEASE - 26 January 2012
Johannesburg - Mine Waste Solutions (Proprietary) Limited (JSE:MWNT) (ISIN:
ZAE ZAE000156261) ("MWS" or "the Company") today released its production
results for the three months ended December 31, 2011 ("Q3 2012") together
with the consolidated results of its parent company, First Uranium
Corporation ("First Uranium")(ISIN:CA337744R1029)which also owns the
Ezulwini Mine, an underground gold and uranium mine in South Africa.
For Q3 2012, MWS sold 25,142 ounces of gold, being an 8% decrease compared
to 27,453 ounces sold in Q2 2012.
First Uranium 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. First Uranium 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 of First Uranium, 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 14,833 5,107 4,822 4,903
reclaimed (000s)
Average gold head 0.325 0.319 0.348 0.309
grade (g/t)
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 87,254 30,887 36,006 20,361
(lbs)
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
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.
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.
CASH RESOURCES
As at December 31, 2011, the cash reserves of First Uranium were US$10.6
million.
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 and First Uranium`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 Pre-
Listing Statement available on First Uranium`s website www.firsturanium.com
and First Uranium`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 15:02:16 Produced by the JSE SENS Department.
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