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FUM - First Uranium Corporation - Business Milestones Update and Q4 2011
Production Results for the three months ended March 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
NEWS RELEASE - March 31, 2011
BUSINESS MILESTONES UPDATE AND Q4 2011 PRODUCTION RESULTS FOR THE THREE MONTHS
ENDED MARCH 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 an update
on the shaft moiling program and the re-commissioning of the uranium plant at
the Ezulwini Mine, as well as a progress report on the Phase 2 expansion project
at Mine Waste Solutions (MWS). In addition, the Company has provided
production results for the quarter ended March 31, 2011 ("Q4 2011").
First Uranium President and CEO, Deon van der Mescht, commented, "This is the
first opportunity I have had to report to shareholders since the decimation of
uranium-related stock price globally following the tragic events in Japan.
While First Uranium derives most of its near-term revenue from gold and fared
better than most, we certainly did not escape the value erosion that occurred.
Nevertheless, we have made good progress at the various projects: the Ezulwini
Mine`s uranium plant is in the final stages of its re-commissioning, which will
enable us to return to uranium production.
"The Ezulwini shaft maintenance program has progressed well and is currently
ahead of schedule. The capital projects at MWS have advanced well over the last
eight months to the extent that the commissioning of the Phase 2 expansion
program has commenced one month ahead of schedule. The Phase 2 reclamation
station has delivered ore into the third gold plant module, water commissioning
of the tailings delivery pipelines from the plant to the new tailings storage
facility ("TSF") is currently underway with deposition onto the TSF anticipated
shortly".
EZULWINI MINE
First Uranium has commenced the re-commissioning of the Ezulwini Mine`s uranium
plant on schedule following the modification program on the Ion Exchange ("IX")
columns. During the period of refurbishment, the Company has upgraded and
modified elements of the plant design, aimed at improving performance to achieve
better recovery rates. Uranium production is now on-track to re-commence in
April 2011.
Gold production for Q4 2011 was constrained by the impact of the shaft
maintenance program, as announced in our news release on January 27, 2011 as
well as the previously announced fatal accident on March 12, 2011.
In January 2011, it was announced that Ezulwini shaft`s hoisting capacity was
restricted due to lateral pressures being placed onto the shaft sidewall,
creating pinch points along the hanging tower structure. The Company immediately
implemented a program to moil (clear) the pinch points. This work resulted in
the hoisting capacity of the mine being temporarily constrained. The shaft
moiling, together with improvements to hoisting procedures, is restoring
hoisting efficiencies.
Mr van der Mescht added, "Before the end of April 2011, we expect the shaft to
return to planned hoisting rates, achieving speeds of seven meters per second,
compared to the current four meters per second, thus enabling higher run-of-mine
tonnes to be moved from underground to the mine`s gold and uranium plants as
well as de-constraining the material handling capacity of the shaft".
Production was further constrained following the fall-of-ground accident that
occurred in this area on March 12, 2011 and that sadly caused the death of an
underground miner. Pursuant to section 54 of the Mine Health and Safety Act
(South Africa) and as ordered by the Department of Mineral Resources (DMR) all
mining operations were suspended for 4 days. Normal operations resumed during
the night shift on Thursday, March 17, 2011 (see news release dated March 18,
2011). Production from the Room and Pillar section, in which the fatality
occurred, was suspended for seven days. The Room and Pillar section accounts for
greater than 30% of Ezulwini`s total production.
These factors, combined with a one-day illegal work stoppage, resulted in the
Ezulwini Mine achieving considerably less than the planned production for the
quarter. A projected total of 11,644 ounces were sold for Q4 2011, compared to
19,477 ounces of gold sold for the three months ended December 31, 2010.
Said Mr van der Mescht, "We are seeing a progressive improvement in production
fundamentals with underground mining development metres advanced returning to
planned levels. We expect that this will provide momentum to overcome the slow
ramp up and achieve targets set for the next quarter".
MINE WASTE SOLUTIONS
MWS continues to carry out its expansion plan, exceeding guidance for the fourth
successive quarter. In March 2011, MWS achieved a major milestone with the
commissioning of the Phase 2 Expansion Program, which commenced one month ahead
of schedule. This is the final phase of the capital expansion program that
includes the Phase 2 reclamation station, the third gold plant module and the
TSF, as well as all adjoining infrastructure.
Said Mr van der Mescht, "The fact that we have been able to commission one month
ahead of schedule, places MWS in a very solid position to continue to ramp-up
production and lower its costs. In addition, this earlier than planned
commissioning facilitates the early commencement of the various elements of the
Gold Wheaton Completion Test, which is expected to be successfully achieved by
September 2011."
MWS had another good operating quarter: in Q4 2011, the operation is projected
to sell 22,200 ounces, compared to 21,040 ounces of gold that was sold during Q3
2011.
MWS WATER LICENCE
MWS`s Integrated Water Use Licence ("Water Use Licence") was issued in June 2010
by the South African Department of Water Affairs ("DWA") for the water uses
associated with the development of its new tailings facility, or TSF. An appeal
was filed by the Federation for a Sustainable Environment ("FSE") with the South
African Water Tribunal against MWS`s Water Use Licence. The South African
National Water Act allows appeals against the grant of a Water Use Licence
provided the appellant has fulfilled certain conditions: notably lodging a valid
objection within a specific period of time.
After consulting with external legal counsel, the Company is of the view that
the appeal is not legally valid and therefore does not suspend the duly granted,
existing Water Use Licence.
Mr van der Mescht commented, "Additionally, we have continued to try to engage
with the FSE to explain the project`s strong environmental credentials".
The TSF makes it possible, over the life of the MWS project, to remove 15 old
tailings dams in the Stilfontein area that are currently a major source of air
and water pollution. The retreatment of these historical dumps will reduce the
salt load on the Vaal River by up to 50% compared to current levels. Gold and
uranium content will be reduced by more than 50% and 25%, respectively. Removal
of these metals and other sources of pollution will improve the quality of the
groundwater, while rehabilitation of the associated footprint areas will realize
land that can be utilized for alternative sustainable development initiatives
such as housing, industrial development and grazing.
Q4 2011: PRODUCTION RESULTS
The following table summarizes the production from each operation during Q4
2011. Production from the previous three quarters has been included for
comparison purposes.
FY Q4 2011* Q3 Q2 Q1 FY
2011* 2011 2011 2011 2010
MWS
Tonnes of ore 13,402 3,606 3,521 3,170 3,105 11,071
reclaimed (000s)
Average gold head 0.35 0.34 0.34 0.35 0.36 0.38
grade (g/t)
Gold plant recovery 55% 56% 55% 52% 56% 51%
(%)
Gold sold (oz) 82,991 22,200 21,040 18,743 21,008 62,019
Ezulwini Mine
Tonnes of ore milled 599,393 157,410 162,166 146,854 132,963 425,102
Average gold recovery 3.1 2.6** 3.3 3.1 3.3 2.3
grade (g/t)
Gold sold (oz) 59,940 11,644 19,477 15,066 13,753 29,638
Uranium produced (lbs) 31,408 - - 31,408 - 44,399
Note: * Projected production for Q4FY11 and hence FY2011
** The recovered grade was negatively impacted by the re-filling of the
gold plant work in progress inventory at the beginning of Q4 2011,
following on from the emptying of the gold leach tanks for maintenance
during December 2010 as previously reported. In addition, the extended
stoppage of the high grade Room and Pillar section, subsequent to the
fatality contributed to lower recovery grades. Despite the drop in
recovered grade for the quarter, face grades have been consistent with
resource and planned face grades.
About First Uranium Corporation
First Uranium Corporation (TSX:FIU, JSE:FUM) is focused on its goal of becoming
a 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 (MWS)
tailings recovery facility, both operations situated in South Africa. First
Uranium also plans to grow production by pursuing value-enhancing acquisition
and joint venture opportunities in South Africa and elsewhere.
For further information, please contact:
Julian Gwillim, julian@aprio.co.za
Gail Strauss, gailstrauss@mweb.co.za
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,
including without limitation, the outcome of the appeal of the Water Use Licence
by FSE. 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: 01/04/2011 07:39:38 Supplied by www.sharenet.co.za
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