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MWNT - Mine Waste Solutions - Interim Results Report
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
29 December 2011
Attached are the unaudited interim abridged consolidated financial statements
of Mine Waste Solutions (Proprietary) Limited for the six months ended
September 30, 2011 (2012 YTD).
As previously reported on SENS on November 15, 2011, First Uranium Corporation
(First Uranium) issued its unaudited consolidated financial statements and
related Management`s Discussion and Analysis ("MD&A") for the three and six
months ended September 30, 2011. As a subsidiary of First Uranium, the results
of Mine Waste Solutions (Proprietary) Limited and its wholly-owned subsidiary,
Chemwes (Proprietary) Limited ("Chemwes") were included in the results for the
First Uranium group. Mine Waste Solutions together with Chemwes are referred
to herein as MWS. The six months ended September 30, 2010 is referred to as
2011 YTD.
Basic and diluted loss and headline loss per common share
(extracted from Mine Waste Solutions` interim abridged consolidated financial
statements for the six months ended September 30, 2011)
30 September 30 September
2011 2010
R R
Basic and diluted loss and headline loss (1 179.82) (563.89)
per share of (cents per share in Rand)
is calculated based on the loss and (448 330 202) (214 278 531)
headline loss for the six months of (in
Rand)
and a weighted average number of common 380 000 380 000
shares outstanding of
Overview of Mine Waste Solutions
(extracted from First Uranium`s MD&A for the three and six months ended
September 30, 2011)
MWS increased its gross profits for 2012 YTD (US$25.7 million) by 47% compared
to 2011 YTD (US$17.5 million), as a result of higher revenues generated by the
tailings operation.
The 55% higher tonnage throughput in 2012 YTD (9.7 million tonnes) compared to
2011 YTD (6.3 million tonnes) was driven primarily by the commissioning of the
new tailings storage facility ("TSF"), which along with the third gold plant
module in April 2011, increased processing capacity from an average of 1.2
mtpm to 1.8 mtpm. The final gold expansion phase of the MWS project during
2012 YTD brought with it three new resources, the Hartebeestfontein tailings
dams No.1, 2 and 7.
The material characteristics of the new resources necessitated modifications
to both the carbon-in-leach and the elution circuit to enable the
infrastructure to accommodate the larger fraction size of the new material.
The modifications undertaken during the period impacted negatively on gold
recoveries in 2012 YTD compared to 2011 YTD. During the period under review,
MWS improved the performance of the third gold plant module significantly such
that overall gold recoveries improved resulting in an average recovery of 51%
for the three months ended September 30, 2011 and 48% for 2012 YTD.
The 62% increase in gold proceeds in 2012 YTD (US$65.2 million) compared to
2011 YTD (US$40.3 million) was primarily driven by the 31% higher average gold
selling prices along with the 27% increase in gold ounces sold over the
comparative period. Amortization in 2012 YTD also increased compared to 2011
YTD as a result of the increased tonnage profile.
The 34% increase in Cash Costs* in 2012 YTD (US$673 per ounce) compared to
2011 YTD (US$501 per ounce) were driven by several factors, namely:
The high unit cost of operating the Hartebeesfontein No. 7 satellite dam
(including trucking) which are important in managing the grade and fraction
size mining mix reporting to the third gold module reclamation station;
Additional power costs of running the new TSF, which is situated approximately
16km from the metallurgical complex;
Additional water costs resulting from less than planned return water reporting
from the TSF to the reclamation operations and the resultant need to
supplement water from more expensive sources. The need to supplement water
will reduce in time as the dam begins to fill and is less affected by
evaporation.
The higher revenues in 2012 YTD more than offset the higher costs in the
respective period and resulted in the 47% increases in gross profits generated
by MWS compared to 2011 YTD.
The successful completion of the critically important Franco-Nevada Technical
Completion Test, as required in terms of the gold purchase agreement between
Chewmes (Proprietary) Limited, First Uranium Corporation, Franco-Nevada
(Barbados) Corporation (formerly Gold Wheaton (Barbados) Corporation) and
Franco-Nevada GWL Holdings Corp. (successor to Gold Wheaton Gold Corp.), on
August 24, 2011 was a significant milestone for MWS and removes a significant
commercial risk for this operation.
At the end of 2012 YTD, the capital program for the third gold plant module as
well as the TSF was fundamentally complete with minor trailing obligations
remaining. All contracts related to the execution of these capital programs
are likely to be closed out along with final settlement during the three
months ended December 31, 2011.
*"Cash Costs" are costs directly related to the physical activities of
producing gold and uranium and include mining, processing and other plant
costs; third-party refining and smelting costs; marketing expense, on-site
general and administrative costs; royalties; on-mine drilling expenditures
that are related to production and other direct costs. Sales of by-product
metals such as uranium and silver are deducted from the above in computing
cash costs. Cash costs exclude depreciation, depletion and amortization,
corporate general and administrative expense, exploration, interest, and pre-
feasibility costs and accruals for mine reclamation. Cash costs are calculated
and presented using the "Gold Institute Production Cost Standard" applied
consistently for all periods presented. The Gold Institute was a non-profit
industry association comprised of leading gold producers, refiners, bullion
suppliers and manufacturers. This institute has now been incorporated into the
National Mining Association. The guidance was first issued in 1996 and revised
in November 1999. Total cash costs per ounce is a non-IFRS measurement and
investors are cautioned not to place undue reliance on it and are advised to
read all IFRS accounting disclosures presented in the Corporation`s Financial
Statements.
Reserves and Resources
The mineral reserve and resources for MWS estimates as of April 1, 2011 are
available on the website of First Uranium Corporation at www.firsturanium.com.
There have been no material changes to the mineral reserve and resource
estimates since such date.
Annual Financial Statements
The audited annual consolidated financial statements of MWS for the year ended
March 31, 2011 is available on the First Uranium website at
www.firsturanium.com under Investor Centre/ Annual Reports.
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 License by FSE. For more details on these estimates, assumptions,
risks and uncertainties, see 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 9 November 2011
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.
Non-IFRS Measures
The Company believes that in addition to conventional measures prepared in
accordance with International Financial Reporting Standards ("IFRS"), the
Company and certain investors and analysts use certain other non-IFRS
financial measures to evaluate the Company`s performance including its ability
to generate cash flow and profits from its operations. The Company has
included certain non-IFRS measures in this document. Non-IFRS measures do not
have any standardized meaning prescribed under IFRS, and therefore they may
not be comparable to similar measures employed by other companies. The data is
intended to provide additional information and should not be considered in
isolation or as a substitute for measures of performance prepared in
accordance with IFRS. Readers are advised to read all IFRS accounting
disclosures presented in the Company`s financial statements for more detail.
29 December 2011
Date: 29/12/2011 09:26:10 Supplied by www.sharenet.co.za
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