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Gold/Mining/Energy : Uranium Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Yamakita who wrote (10439)	4/17/2007 12:32:50 AM
From: greatplains_guy	Respond to of 30229

First Uranium studies tripling output Allan Seccombe Posted: Mon, 16 Apr 2007 [miningmx.com] -- FIRST URANIUM will raise C$130m towards restarting gold and uranium extraction at its mothballed South African mine, and the Toronto-listed company is investigating a strategy to more than triple uranium production. First Uranium raised C$203m in a December initial public offering and will now have a total C$333m ($294m) to put towards its Ezulwini project, which used to be owned by Harmony Gold, and its Buffelsfontein dump re-treatment operation. The latest capital raising in the form of unsecured convertible debentures will be privately placed with a consortium of investment banks led by RBC Capital Markets. The terms will be finalised on Wednesday this week. an opportunity to increaseThe IPO document estimated a capital cost of U$280m to produce 5.2 million oz of gold dore and 15.8 million pound of U3O8 over 19 years. “We are using only 20% of our resource over 20 years so there is an opportunity to increase that. The current consumption of the resource is limited by the current shaft capacity,” First Uranium chief operating officer Jim Fisher told Miningmx. The current shaft system has a 200,000 tonnes/month capacity. Ezulwini has measured and indicated resources of two million ounces of gold and 6.8 million pounds of uranium oxide. There is an inferred resource of 32 million gold ounces and 230 million pounds of uranium. Johannesburg-listed gold miner Simmer & Jack owns 67% of First Uranium. First Uranium will use its funds to develop the existing mine and build a gold and uranium processing plant. It will also fund a study into the sinking of a 250,000 tonnes/month shaft to triple the planned uranium plant’s capacity to 350,000 tonnes/month. The shaft could be between 600 metres and more than 1,800 metres deep, depending on where it is placed to intersect the uranium and gold-bearing Middle Elsburg reef, said Fisher. An added factor in the decision making process will be the results of an exploration programme to determine the extent of the Middle Elsburg reef. First Uranium has submitted a prospecting application for contiguous land to the east to the Department of Minerals and Energy. Click Here to subscribe to our daily newsletter“With the prospecting right, we might move the shaft somewhere different and we have to put that information in the mix as well. That could make it a little bit deeper, but the information we have is that Middle Elsburg flattens off at depth,” Fisher said. The exploration programme on the contiguous land will involve sinking holes from surface to a depth of 2,000 metres. Once the prospecting permit is granted, First Uranium will have access to old drilling results compiled by Gencor. The feasibility study into the expanding production from the Middle Elsburg reef will take three years. The cost of a twin shaft system could be in the region of R3bn. By 2010, First Uranium expects to generate $100m annually at current prices. “We might be able to fund the shaft out of current operations, but we might also want to go to the market,” Fisher said. With the envisioned expansion programme, uranium output would triple to three million pounds a year and gold output will grow by 16,100 oz per annum to some 305,000 oz. “I don’t think placing that much uranium is a problem. The increase will be dictated by the price,” Fisher said, adding First Uranium did not expect the current price of $113/lb to still be in place in five to seven year’s time. “We don’t see it falling below $40 though.” Gold production will start in October as ore is toll treated at the nearby Harmony Doornkop plant before in-house treatment from June next year. A plan to sell water pumped out of the mine to the local municipality to offset costs is still some years off, he said. miningmx.com