| Tue 30 Jan 2007, 16:15 | | SXR - sxr Uranium One Inc - News Release |
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SXR
SXR
SXR - sxr Uranium One Inc - News Release
sxr Uranium One Inc
(Formerly Southern Cross Resources Inc.)
(Incorporated in Canada)
(Registration number: 15096422420)
Share code on the JSE: SXR & ISIN: CA87112P1062
Share code on the TSX: SXR & ISIN: CA87112P1062
sxr Uranium One Inc.
390 Bay Street, Suite 1610
Toronto, Ontario M5H 2Y2
Trading Symbol: SXR - Toronto Stock Exchange, JSE Limited (Johannesburg
Stock Exchange)
NEWS RELEASE
January 30, 2007
Uranium One Provides Update on Operations, Organic Growth Initiatives and
Announces Changes to Management
Toronto, Ontario and Johannesburg, South Africa - sxr Uranium One Inc.
("Uranium One") is pleased to provide an update on progress at its
development and exploration projects as well as to announce several key
management changes.
Dominion Reefs Uranium Mine
The Dominion Reefs Uranium Mine (DRUM) remains on schedule for commencement
of production on February 28, 2007 and the production for the year 2007
projected in the October 26, 2006 independent technical report on the
Dominion project feasibility study is expected to be met.
Permitting
Uranium One received its new order mining right for Dominion, as well as
approval for its Environmental Management Programme in October 2006. In
December 2006 Uranium One also received an additional water discharge permit
from the South African Department of Water Affairs and Forestry to release an
additional 70 l/s. This permission is in addition to the water use license
granted in July 2006 and was required to enable the mine to discharge shaft
water that is not required for the operation at present.
The Company has been advised by the National Nuclear Regulator of South
Africa (the NNR) that its application for the Certificate of Registration
required in connection with the Project has been approved in principle and
issuance of the Certificate is expected imminently. In accordance with
applicable regulatory requirements, applications for amendments to the
Certificate of Registration relating to subsequent stages of the Project will
be submitted by Uranium One to the NNR in due course.
Dominion Mill
The uranium plant is being commissioned in a staged approach and is on target
for the start-up of production under atmospheric leach conditions during the
first quarter of 2007. The pressure leach section will then be brought on
line during April 2007. This staged approach facilitates a quicker ramp-up
of production and recovery rates.
The crushing, milling and densification circuits were successfully
commissioned on November 21, 2006. Gold ore and slimes material are
currently being processed through these circuits. At present, the water,
sulphuric acid, lime and ammonia storage facilities as well as the supply
pumps and services are being commissioned. The coal-fired boiler has been
cold commissioned and is now being hot commissioned.
The plant design allows for the pre-leach and pressure leach circuits to be
bypassed. This allows for the staged commissioning of the circuit, from the
crushing and milling stages through to atmospheric leaching, counter current
decantation thickeners, pin bed clarifier, solvent extraction and ADU
production. The more complex pressure leach circuit will be commissioned
once the rest of the plant is operating satisfactorily. The brick lining for
the first autoclave is scheduled for completion in February 2007 and is
scheduled for cold commissioning in March 2007, followed by hot commissioning
in April 2007. The commissioning of the pressure leach circuit will bring
the plant up to full design efficiency and design throughput of 100,000
tonnes per month per autoclave. The second autoclave will be ready for
commissioning in August 2007, thus increasing plant capacity to 200,000
tonnes per month.
The plant production ramp up is initially expected to exceed the ore
production from underground and spare plant capacity will be filled by
processing uranium and gold bearing slime from the Dominion dump resource.
Test work has shown good recoveries are obtainable from the slime material
and an 80,000 tonne per month hydraulic sluicing facility has been
commissioned to supplement production from underground.
Mine Construction
At the Rietkuil Section, total development of the R1 decline stands at 1,213
metres. The Rietkuil incline shaft has been dewatered and re-commissioned to
5 level, where mine development operations have commenced. At the Dominion
Section, development of the D1 and D2 declines total 690 and 280 metres,
respectively. Mine development operations at the Dominion Section have
commenced on 1 level.
Underground mine development is at an advanced stage, with over 3,800 metres
of footwall development. In addition, approximately 458 metres of working
face has now been opened up and stoping has commenced. Stoping at the
Rietkuil Section commenced on January 3, 2007 and blasting continues on a
daily basis. In the Dominion Section, the first blast on the D2 reef horizon
took place on January 13, 2007.
DRUM Resource Update
On January 17, 2007, Uranium One announced an updated resource estimate for
the Dominion Reefs Uranium Mine. This update showed a 37% increase in the
Indicated uranium resources over the estimate reported in June 2006. The
current mineral resource estimate shows an Indicated uranium resource of 36.4
million tonnes at a grade of 0.81 kg/tonne, containing 64.9 million pounds
U3O8. The focus of the current and ongoing exploration is to further
increase the Indicated resource base by upgrading existing Inferred
resources, such that mine planning may be expedited for production purposes
and to evaluate the Company`s ability to expand the rate of production to
approximately 7.0 million pounds by 2012.
Potential Expansion of DRUM
The feasibility study for the Dominion Reefs Uranium Mine considered Phase 1
of the current mine plan, whereby an extraction rate of 200,000 tonnes per
month of ore is planned for a 10 year duration, attaining in excess of 4.0
million lbs U3O8 per annum at peak production. A preliminary assessment for
Phase 2 was also presented and has been designed to sustain production rates
at 200,000 tonnes per month for an additional 20 years.
Conceptual studies on Phases 3 and 4 of the mine plan are currently being
undertaken and are scheduled to be completed by Q3 2007. Phase 3 and Phase 4
consider an increase in throughput capacity from 200,000 tonnes per month to
300,000 tonnes per month and 400,000 tonnes per month, respectively.
Current exploration activities are focussed on expanding the Indicated
resource base in anticipation of supporting mine planning for the Phase 3 and
Phase 4 expansions. This is being achieved through the delineation of down
dip extensions of the higher grade channels and by delineating new shallow
orebody extensions such as at Dominion North.
Access in the shallower (<500 metres below surface) areas will be by
additional declines. Vertical shafts are planned to access the deeper areas,
with a 1,000 metre deep vertical shaft being considered for the down dip
extensions in the Rietkuil area.
A definitive cost estimate for expanding the plant capacity to 300,000 tonnes
per month is being conducted by Bateman Africa. This expansion would include
the addition of a SAG (semi-autogenous grinding) mill, a separate 100,000
tonne per month counter current decantation circuit, an additional autoclave,
boiler and the expansion of the present solvent extraction circuit. The
existing design and plant lay-out would allow for this expansion, with full
integration into the existing plant.
A further increase in effective plant capacity is planned through the
introduction of radiometric ore sorting after primary crushing. A 120 tonne
per hour pilot plant has been ordered at a cost of US$4.3 million and will be
constructed and commissioned by the end of 2007. Test work has indicated
that in excess of 25% of the ore can effectively be sorted and discarded as
waste material. Similar plants at other uranium operations (such as Rio
Tinto`s Rossing Uranium Mine in Namibia) have successfully proven the concept
of radiometric sorting. It is anticipated that a full scale radiometric
sorting plant could potentially increase plant throughput to 400,000 tonnes
per month (4.8 million ore tonnes per year sorted to 3.6 million tonnes of
ore processed through the plant per year using radiometric sorting) resulting
in potential U3O8 production by 2012 in excess of 7.0 million pounds per year
at assumed current grades.
Uranium One will continue to assess areas not yet classified as resources in
the Dominion and Rietkuil Sections. Exploration is continuing in these
unclassified areas of the Dominion and Rietkuil Sections with the objective
of further increasing the Inferred resource base and identifying additional
ore-shoots for conversion to Indicated resources.
In addition to the areas being explored at the Dominion and Rietkuil
Sections, Uranium One has also been awarded prospecting rights over the
westerly extension of the Dominion Reefs (discussed in further detail under
Global Exploration Update section below). These prospecting rights consider
a Dominion Reef strike extent of approximately 60 km, effectively resulting
in more than a 400% increase in the strike length of the Dominion Reefs
previously controlled by the Corporation. Within the current mining rights
area at Dominion, comprising an approximate 10 km Dominion Reef strike, three
ore-shoots have been identified and are classified as Indicated resources.
Two of these form the resource base for the current Dominion declines (D1 and
D2) and the third (Dominion North) forms part of the resource base for the
Phase 3 and Phase 4 production planning. The modelling of these ore-shoots
illustrates the significant potential of the newly acquired mineral rights
area.
Honeymoon Uranium Project Update
The Honeymoon Uranium Project is an advanced in situ leach project located in
South Australia and was approved by the Board of Directors of Uranium One on
August 28, 2006 upon review of a feasibility study prepared by Mayfield
Engineering, Aker Kvaerner and others.
Work is proceeding on installing the required infrastructure for the
Honeymoon Uranium Project. Staff quarters to provide on-site accommodation
for 50 employees have recently been delivered and installed along with
transportable buildings to provide additional office space. The water
treatment and sewerage plants have been ordered. Design work on the access
road is under way. Specifications on the power supply are being prepared by
ETSA Utilities, South Australia`s electricity distributor and easements for
the power line are being sought from the relevant land holders.
In addition to a mining lease, Uranium One holds a newly granted ten year
uranium export licence which expires on December 31, 2016.
Bateman Engineering has been awarded the Engineering, Procurement and
Construction Management (EPCM) Contract for the Honeymoon Uranium Project.
Development of the project is proceeding according to schedule with
production expected to commence in Q1 2008.
Update on U.S. Growth Strategy
Uranium One continues to pursue growth opportunities in the United States.
On January 8, 2007 the Company announced that it had extended for a further
three months the period of exclusivity with U.S. Energy to negotiate
definitive terms for the acquisition of the Shootaring Canyon uranium mill in
Utah and a portfolio of uranium property interests in Utah, Wyoming, Arizona
and Colorado.
The United States comprises approximately one-quarter of global nuclear
generating capacity, representing annual demand of over 50 million pounds
U3O8. Domestic production of U3O8 is currently running at an annualized rate
of 4 million pounds per year in the United States. Uranium One believes that
a growing preference for reliance upon domestic sources of energy points to a
need to develop domestic uranium resources within the United States.
To support our strategy of pursuing growth in the United States, as well as
in other jurisdictions, Uranium One has created a new Projects and
Integration Team comprising members of the DRUM project team. This new team
will provide the necessary capacity to evaluate and progress acquisition
targets as identified by the Company and will provide transitional technical
expertise while full local operational teams are being assembled.
Aflease Gold Update
Uranium One`s 71.4% owned subsidiary Aflease Gold Limited continues to
develop its Modder East gold project located approximately 30 kilometres east
of Johannesburg, South Africa. The portal of the decline was completed
during the third quarter of 2006 and trackless decline development has
initiated from the base of the portal excavation and advanced a total of 500
metres to date.
The Modder East gold project is expected to be completed on schedule, with
the first gold pour expected in the third quarter of 2009. N M Rothschild &
Sons has been appointed as exclusive financial advisor to Aflease Gold with
respect to securing approximately R300 million (approximately US$41 million)
in project finance to further fund development activities at Modder East.
Global Exploration Update
South Africa
The Company will continue to drill aggressively throughout 2007, with a focus
on further increasing the confidence of the existing Inferred resource base
to the Indicated category at the Dominion Uranium Project. This focus will
aid Uranium One in completing the preliminary assessment of the potential to
expand the Project to a production rate of approximately 7.0 million pounds
of uranium oxide annually by 2012.
As discussed in the Company`s press release dated January 17, 2007 Uranium
One has been formally granted additional prospecting rights to the west of
the Dominion Reefs Uranium Mine over an area of 57,565 hectares. Additional
prospecting rights are currently pending, which would bring the total area of
newly acquired ground to 74,380 hectares. Assuming the formal grant of
prospecting rights currently pending, the newly acquired land package would
represent approximately 60 kilometres of strike length of the Dominion Reefs,
representing more than a 400% increase in the strike length previously
controlled by the Company. A map showing the areas covered by the new
prospecting rights is available on the Corporation`s website at
www.uranium1.com.
For 2007, Uranium One has planned a US$14.1 million exploration program in
South Africa. This includes a 75,000 metre surface diamond drilling program,
focused on the Dominion and Rietkuil Sections, with an overall objective of
delineating the down-dip extensions of identified high grade zones as well as
newly identified high grade ore-shoots. On the newly acquired prospecting
rights, Uranium One is planning a program of airborne geophysics, surface
mapping and surface exploration drilling, expected to commence during Q2
2007.
Australia
Uranium One has planned a 2007 exploration budget of US$3.4 million for
Australia. The focus of the exploration program for 2007 will be geared
towards further development of existing projects as well as generating
additional targets for future evaluation.
At the Company`s existing projects, the 2007 program will include a deep test
drill hole at Karkarook during the first quarter, geophysical surveys on the
Stuart Shelf and in the Honeymoon granite area, as well as an initial 15,000
metre rotary mud drill program at Goulds Dam.
Uranium One will also purchase a second PFN tool and will build a logging
truck for a platform to run the new PFN tool by the middle of the year.
Canada
On January 11, 2007 Uranium One was notified by Pitchstone Exploration Ltd.,
that it had completed its requirements under a joint venture agreement
between the two companies to earn a 50% interest in five projects in the
eastern Athabasca Basin. Pitchstone is the operator of the joint venture and
recently announced a C$5 million 2007 exploration programme that anticipates
drilling 13,000 metres at the Darby-Candle, Waterfound and Moon Lake
properties. An electromagnetic survey is also planned for the Darby-Candle
and Lynx Lake properties to test for conductive basement formations.
Management Changes
Uranium One is also pleased to announce several changes to its management
team. In order to create capacity for the development of acquired assets, a
new Projects and Integration Team has been created. The Projects and
Integration Team will be tasked with the investigation, approval and
implementation of such projects as identified by the Company on a global
basis.
Bruce Jones, formerly Executive Vice President, Africa and Europe, has been
appointed to lead this team and now holds the title of Executive Vice
President, Projects and Integration. Robert van Niekerk will now assume the
role of Executive Vice President, Africa and Europe with primary focus on
Dominion. Robert was previously Executive Vice President, Aflease Gold.
Norman Schwab has been appointed Acting Chief Operating Officer at Aflease
Gold. Norman previously held the position of Vice President, Mining and
Projects at Aflease Gold.
Commenting on the Company`s progress with its projects, Neal Froneman,
Uranium One CEO said:
"I am pleased that Uranium One has delivered on all its targets thus far at
Dominion, Honeymoon and at Aflease Gold. All key personnel are now focused
on achieving a smooth transition from development to production at Dominion.
We are focused on maximizing value for our shareholders by working to expand
production at Dominion expeditiously to approximately 7.0 million pounds U3O8
per annum by 2012. We look forward to completing our preliminary assessment
of the potential expansion to demonstrate to the market the tremendous
organic growth potential within our company."
About sxr Uranium One
sxr Uranium One Inc. is a Canadian uranium and gold resource company with a
primary listing on the Toronto Stock Exchange and a secondary listing on the
JSE Limited (the Johannesburg stock exchange). The Corporation owns the
Dominion Uranium Project in South Africa and the Honeymoon Uranium Project in
South Australia, and is actively pursuing growth opportunities in the uranium
sector in the United States. The Corporation holds an approximate 71.4%
interest in Aflease Gold Limited, which owns the Modder East Gold Project in
South Africa. Through a 50/50 joint venture with Pitchstone Exploration
Ltd., the Corporation is also engaged in uranium exploration activities in
the Athabasca Basin of Saskatchewan.
For further information, please contact:
Neal Froneman Chris Sattler
Chief Executive Officer Vice President, Investor Relations
Tel: + 27 11 482 3605 Tel: + 1 416 350 3657
Cautionary Statement
No stock exchange, securities commission or other regulatory authority has
approved or disapproved the information contained herein.
This News Release includes certain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 and "forward-
looking information" within the meaning of applicable Canadian legislation.
All statements other than statements of historical fact included in this
release including, without limitation, statements regarding potential
mineralization, reserves, resources, estimates of future mining, recovery,
production rates and operating costs, and future plans and objectives of
Uranium One, are forward-looking statements (or forward-looking information)
that involve various risks and uncertainties. There can be no assurance that
such statements will prove to be accurate and actual results and future
events could differ materially from those anticipated in such statements.
Important factors could cause actual results to differ materially from
Uranium One`s expectations. Such factors include, among others, the actual
results of exploration activities, actual results of reclamation activities,
the estimation or realization of mineral reserves and resources, the timing
and amount of estimated future production, costs of production, capital
expenditures, costs and timing of the development of new deposits,
availability of capital required to place Uranium One`s properties into
production, conclusions of economic evaluations, changes in project
parameters as plans continue to be refined, future prices of commodities,
possible variations in ore grade or recovery rates, failure of plant,
equipment or processes to operate as anticipated, accidents, labour disputes
and other risks of the mining industry, delays in obtaining governmental
approvals, permits or financing or in the completion of development or
construction activities, Uranium One`s hedging practices, currency
fluctuations, title disputes or claims limitations on insurance coverage, as
well as those factors discussed under "Risk Factors" in Uranium One`s Annual
Information Form and Management`s Discussion and Analysis as filed with
securities regulatory authorities in Canada. Although Uranium One has
attempted to identify important factors that could cause actual results to
differ materially, there may be other factors that cause results not to be as
anticipated, estimated or intended.
There can be no assurance that such statements will prove to be accurate as
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. Uranium One does not undertake to
update any forward-looking statements that are included herein, except in
accordance with applicable securities laws.
In addition, this news release uses the terms "indicated resources" and
"inferred resources" as defined in accordance with the SAMREC Code (South
African Code for Reporting of Mineral Resources and Mineral Reserves prepared
by the South African Mineral Resource Committee) ("SAMREC") under the
auspices of the South African Institute of Mining and Metallurgy effective
March 2000 or as amended from time to time. A mineral resource is a
concentration or occurrence of natural, solid, inorganic or fossilized
organic material in or on the earth`s crust in such form and quantity and of
such a grade or quality that it has reasonable prospects for economic
extraction. The location, quantity, grade, geological characteristics and
continuity of a mineral resource are known, estimated or interpreted from
specific geological evidence and knowledge. A measured mineral resource is
that part of a mineral resource for which quantity, grade or quality,
densities, shape and physical characteristics can be estimated with a level
of confidence sufficient to allow the appropriate application of technical
and economic parameters to support mine planning and evaluation of the
economic viability of the deposit. The estimate is based on detailed and
reliable exploration, sampling and testing information gathered through
appropriate techniques from locations such as outcrops, trenches, pits,
workings and drillholes that are spaced closely enough to confirm both
geological and grade continuity. An indicated mineral resource is that part
of a mineral resource for which quantity, grade or quality, densities, shape
and physical characteristics can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and economic
parameters to support mine planning and evaluation of the economic viability
of the deposit. The estimate is based on detailed and reliable exploration
and testing information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drillholes that are
spaced closely enough for geological and grade continuity to be reasonably
assumed. An inferred mineral resource is that part of a mineral resource for
which quantity and grade or quality can be estimated on the basis of
geological evidence and limited sampling and reasonably assumed, but not
verified, geological and grade continuity. The estimate is based on limited
exploration and sampling gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drillholes. Mineral
resources which are not mineral reserves do not have demonstrated economic
viability.
The indicated and inferred resource estimates provided herein in accordance
with SAMREC will be reconciled to the guidelines set out in the Canadian
Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral
Resources and Mineral Reserves, adopted by CIM Council on August 20, 2000, as
may be amended from time to time by the CIM, in accordance with National
Instrument 43-1 01 - Standards of Disclosure for Mineral Projects, ("NI 43-
101") in the independent technical report being prepared by SRK for filing in
accordance with the requirements of NI 43-101.
Investors are cautioned not to assume that all or any part of the mineral
deposits in the Measured and Indicated resource categories will ever be
converted into reserves. In addition, "Inferred resources" have a great
amount of uncertainty as to their existence and economic and legal
feasibility. It cannot be assumed that all or any part of an Inferred mineral
resource will be ever be upgraded to a higher category. Under South African
rules, estimates of inferred mineral resources may not form the basis of
feasibility or pre-feasibility studies or economic studies except under
conditions noted in SAMREC. Under Canadian rules, estimates of Inferred
mineral resources may not form the basis of feasibility or pre-feasibility
studies or economic studies except for preliminary assessments as defined
under NI 43-101 . Investors are cautioned not to assume that all or any part
of an Inferred resource exists or is economically or legally mineable.
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Uranium One`s website - www.uranium1.com.
Date: 30/01/2007 16:15:01 Produced by the JSE SENS Department.
