First Uranium reports on production for quarter ended September 30, 2009
Thu Oct 8, 8:28 AM
ca.news.finance.yahoo.com
REPORTS RECORD GOLD PRODUCTION OF 21,374 OUNCES;
44% HIGHER THAN PREVIOUS QUARTER
All amounts are in US dollars unless otherwise noted.
TORONTO and JOHANNESBURG, Oct. 8 /CNW/ - First Uranium Corporation (TSX:FIU, JSE:FUM) (ISIN:CA33744R1029) ("First Uranium" or "the Company") today announced that during the quarter ended September 30, 2009 ("Q2 2010") the Company produced 7,952 ounces of gold from the Ezulwini Mine, a 110% percent increase compared to the previous quarter, and 13,422 ounces of gold from the Mine Waste Solutions tailings recovery project ("MWS"), a 22% increase compared to the previous quarter. During the quarter, the Company also continued to optimize its uranium production and has now sent two batches of uranium in the form of "yellowcake" (ammonium diuranate) for processing in South Africa.
"We believe that the best way for us to deliver value to our shareholders is to meet our near-term production and cost targets," commented Gordon Miller, President and CEO of First Uranium. "By the end of this fiscal year in March 2010 we expect to be completing our capital expansion program and generating positive free cash flow from both operations."
Milestones achieved at the Ezulwini Mine during the last quarter include:
- completion of the low-grade de-stress cut in the Upper Elsburg ("UE")
gold-only ore body, which opens up mining of the high-grade ore in
the shaft pillar;
- significant underground development to meet our production targets.
Production stopes mined during Q2 2010 were as follows:
- the workable face length in the UE gold-only ore body was 654
metres at a grade of 5.55 grams per tonne inclusive of low-grade
waste rock from the de-stress cut; and
- the workable face length for the Middle Elsburg ("ME") co-product
gold and uranium ore body was 444 metres at a gold grade of 4.04
grams per tonne and a uranium grade of 679 grams per tonne.
- the gold plant continues to run at design specifications;
- production at the recently commissioned uranium plant is being
optimized and beginning to run at design specifications; and
- a second dispatch of yellowcake was delivered to the local calcining
plant, building up an inventory of yellowcake for conversion and sale
to a nuclear power utility.
At MWS, commissioning of the second gold plant module (Phase 1B) is complete. The Phase 1A gold plant is operating at design specifications, achieving a recovery rate of 50% during the month of September 2009. MWS is expected to increase gold recovery rates for the balance of the year and more than double its low-cost gold production during this quarter ending December 2009 to an annualized production rate of approximately 100,000 ounces per annum.
At MWS, construction of the third gold plant module (Phase 2) and third stream of the flotation plant is proceeding on schedule for completion by June 2010.
The following table summarizes the production from each operation during Q2 2010. Production from the previous four quarters has been included for comparison purposes.
Quarterly Production Results
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Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010
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Ezulwini
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Total tonnes of ore
milled 44,014 80,079 108,622 92,468 94,599
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Gold produced (oz) 124 6,411 4,267 3,791 7,952
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Gold sold (oz) 124 6,411 4,267 3,379 7,047
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MWS
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Tonnes of ore reclaimed
(000s) 1,839 1,798 1,693 1,835 2,476
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Average gold head grade
(g/t) 0.41 0.42 0.41 0.42 0.39
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Gold plant recovery (%) 49% 50% 47% 44% 44%
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Gold reclaimed (oz) 11,821 12,235 10,513 11,007 13,422
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Gold sold (oz) 12,118 12,581 10,417 10,676 11,739
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Outlook - Ezulwini Mine
At the Ezulwini Mine, the near-term milestones that are expected to drive the planned increases in gold and uranium production include:
- the continued development of workable face length with grades of gold
and uranium that are at or above the economic cut off of the ore
mined;
- shipping the first uranium for conversion, which will mark the
Company's first sale of uranium; and
- achieving positive free cash flow for the quarter ended December 31,
2009.
The underground development of mining faces at economic grades of uranium and gold are the key to the success of the operation and are dependent upon favourable exchange rates and metal prices. Although the price of gold in US dollars rose above $1,000 in September, with the strengthening of the South African rand against the U.S. dollar, the price of gold in rand terms declined during the quarter. In this currency environment, the management team at the Ezulwini Mine has decided to temporarily focus its mining efforts on fewer, but higher-grade gold areas and, as a result, gold margins are expected to improve, but production is expected to decline. Until the rand gold price improves, the Company will continue to focus on higher-grade areas.
First Uranium has, in the following table, set new forecasts for face length development, anticipated blasted face grade and kilograms per face length metre to help investors understand the planned underground mine development rate.
Ezulwini Mine: Underground Production Forecast
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Q1 2010 Q2 2010 Q2 2010 Q3 2010 Q4 2010
Actual Forecast Actual Forecast Forecast
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Upper Elsburg Mining
Activity
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Metres of mining face 369 600 605 749 1,856
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Blasted face grade
- gold (g/t) 4.66 6.71 7.79 6.43 6.89
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Middle Elsburg Mining
Activity
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Metres of mining face 408 575 754 1,131 1,752
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Blasted face grade
- gold (g/t) 2.95 2.74 3.13 3.06 3.48
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Blasted face grade
- uranium (g/t) 480 500 439 552 597
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Facelength ("FL") Buildup
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Gold (kg/m of FL blasted) 15 24 28 75 86
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Uranium (kg/m of FL
blasted) 1,077 1,206 1,377 3,328 5,373
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Mill Production (combined)
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Tonnes of ore milled
(000s) 92 145 95 145 338
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Notes:
1. Face-length buildup is a metric to indicate the content of gold
and uranium produced for a horizontal metre of blasted face length.
2. The current mining rate is not expected to immediately fill the
uranium and gold plants that have production capacities of 100,000
tonnes per month and 200,000 tonnes per month, respectively.
3. A minimum three-month delay is expected between uranium production
and sales, allowing time for calcining, shipment and conversion.
4. Q2 grades for the Upper Elsburg ore body include grade dilution from
the low-grade shaft pillar de-stress cut.
5. The anticipated increase in stope grades has been determined on the
basis of current in situ sampling of reef development and sampling of
new stopes that are being opened up.
6. The forecast face length represents the amount of face length
available for mining, not necessarily what will be mined.
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Outlook - MWS
The first two uranium plant modules, which form part of the phase 1B expansion project, are expected to be completed by the end of December 2009. As previously announced, management has deferred construction of the final and third uranium plant module, until uranium prices improve.
MWS: Tailings Recovery and Production Forecast
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Q1 2010 Q2 2010 Q2 2010 Q3 2010 Q4 2010
Actual Forecast Actual Forecast Forecast
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Tonnes of ore reclaimed
(000s) 1,835 3,200 2,476 3,880 3,796
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Average gold head grade
(g/t) 0.42 0.40 0.39 0.39 0.38
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Gold plant recovery (%) 44% 50% 44% 51% 55%
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Gold reclaimed and sold
(oz) 10,676 18,000 11,739 25,019 25,477
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Tonnes of uranium ore
reclaimed (000s) - - - - 395
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Average uranium
concentrate grade
feeding the plant(g/t) - - - - 337
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Uranium plant recovery (%) - - - - 75%
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Uranium reclaimed (lb) - - - - 144,541
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Notes:
1. The increase in gold recoveries is possible through the introduction
of gold concentrates into the uranium plant where exposure of
material to an acidic environment liberates additional gold that
would otherwise not be available for cyanidation.
2. The average uranium concentrate grade is a derived number as the
plant feed is expected to be ore from a variety of sources, only some
of which will be concentrated in the flotation process.
3. Due to plant commissioning, the uranium production ramp up in Q4 2010
is expected to be 60%, 70% and 80% of plant capacity for January
2010, February 2010 and March 2010, respectively.
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Gordon Miller further commented, "By the end of December 2009, we expect to:
- commence uranium production at MWS;
- conclude our first sale of uranium from Ezulwini;
- finalize a contract to supply uranium to Eskom, the South African
power utility; and
- finalize arrangements for a debt facility with a South African bank."
About First Uranium Corporation
First Uranium Corporation (TSX:FIU, JSE:FUM) is focused on its goal of becoming a significant 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 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.
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 including, without limitation, statements regarding the timing and amount of estimated future production, processing and development plans and future plans and objectives of First Uranium are forward-looking statements (or forward-looking information) that involve various estimates, assumptions, risks and uncertainties. For more details on these estimates, assumptions, risks and uncertainties, see the Company's most recent Annual Information Form 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.
Contacts
Bob Tait
Vice President
Investor Relations at bob@firsturanium.ca
(416) 342-5639 (office) or (416) 558-3858 (mobile)
1240-155 University Avenue
Toronto
ON
M5H 3B7 |
