First Uranium - www.yournuclearnews.com
First Uranium Ramping Up Production Of Both Uranium And Gold; Provides Guidance For The Remainder Of The Year
Wednesday, Aug 19, 2009

Toronto and Johannesburg – First Uranium Corporation (TSX:FIU, JSE:FUM) (ISIN:CA33744R1029) (“First Uranium” or “the Company”) today announced that during the quarter ended June 30, 2009 (“Q1 2010”) the Company produced 3,791 ounces of gold from the Ezulwini Mine and 11,007 ounces of gold from the Mine Waste Solutions tailings recovery project (“MWS”).  During the quarter, the Company also achieved a major milestone and produced its first batch of uranium in the form of “yellowcake” (ammonium diuranate). 

“First Uranium joined a small and exclusive group of uranium producers this past quarter.  The Company has commissioned its first uranium plant and is well positioned to fulfill its vision to be a long-term, low-cost producer of both uranium and gold,” commented Gordon Miller, President and CEO of First Uranium.  “Our focus continues to be on both increasing production at the operations and on strengthening the Company’s financial position, while simultaneously managing risk and optimizing margins for our shareholders, ensuring that our significant production ramp up plans are met.”

Milestones achieved at the Ezulwini Mine during the last quarter include:

·         the completion of significant underground work to further access the ore bodies. More specifically, new production stopes as at the end of Q1 2010 can be defined as follows:

o        The workable face length in the Upper Elsburg (“UE”) gold-only ore body was 369 metres at a grade of 4.66 grams per tonne, inclusive of the low grade de-stress mining cut, which is scheduled for completion in October;

o        The workable face length for the Middle Elsburg (“ME”) co-product gold and uranium ore body was 408 metres at a gold grade of 2.95 grams per tonne and a uranium grade of .049 percent.

·         the de-stress cuts required to open up mining of the high-grade ore in the shaft pillar of the UE ore body have proceeded as planned and are expected to be completed in Q3 2010;

·         the gold plant is working to design specifications;

·         production at the recently commissioned uranium plant is being optimized; and

·         the first dispatch of yellowcake was delivered to the local calcining plant prior to being shipped for conversion and ultimate sale to a nuclear power utility.

At MWS, commissioning of a second gold plant module has begun and once fully commissioned, is expected to more than double MWS low-cost gold production from 43,100 ounces to approximately 100,000 ounces per annum. 

During the most recently completed quarter, management made several strategic decisions regarding the third gold and uranium plant modules resulting in a more efficient capital investment program and optimized cash flow profile. The new plan requires an immediate start to the construction of the third gold plant module as well as the third stream of the uranium flotation plant, which will be used to optimize uranium grades delivered to the uranium plant. Inception of the third stream of the uranium flotation plant is expected to ensure that the planned life of mine gold production will be realized in all material respects.

Plans for construction and commissioning of the third gold plant module and the third stream of the uranium flotation plant at MWS have been finalized, the long-lead items have been ordered, major supplier contracts have been entered into and construction is underway, which has locked in costs and significantly reduced the potential for cost volatility in the Company’s capital expenditure program.

Construction of the third gold plant module and third stream of the uranium flotation plant has commenced and is proceeding on schedule for completion by June 2010.

The following table summarizes the production from each operation during the quarter.   Production from the four quarters of the previous fiscal year ended March 31, 2009 has been included for comparison purposes.  

Quarterly Production Results

Q1 2009

Q2 2009

Q3 2009

Q4 2009

Q1 2010

MWS

Tonnes of ore reclaimed (000s)

1,665

1,839

1,798

1,693

1,835

Average gold head grade (g/t)

0.37

0.41

0.42

0.41

0.42

Gold plant recovery (%)

43%

49%

50%

47%

44%

Gold reclaimed (oz)

8,530

11,821

12,235

10,513

11,007

Gold sold (oz)

7,741

12,118

12,581

10,417

10,676

Ezulwini

Total tonnes of ore milled

44,014

80,079

108,622

92,468

Gold produced (oz)

124

6,411

4,267

3,791

Gold sold (oz)

124

6,411

4,267

3,379

Outlook - Ezulwini Mine

At the Ezulwini Mine, the key elements that will drive the planned increases in gold and uranium production include:

·         the de-stress cuts required to open up mining of the high-grade ore in the shaft pillar of the UE ore body, which is scheduled for completion in Q3 2010; and

·         the creation of workable face length with grades of gold and uranium that are at or above the economic cut off of the ore mined.

The underground development of mining faces at economical grades of uranium and gold are the key to the success of the operation.  First Uranium has, with this news release, introduced new forecast metrics of face length, anticipated blasted face grade and kilograms per face length metre to help investors understand the expected acceleration of underground mine development (metrics that will now be regularly supplied in subsequent production updates).
Ezulwini Mine:  Underground Production Forecast

Q1 2010

Actual

Q2 2010

Forecast

Q3 2010

Forecast

Q4 2010

Forecast

Upper Elsburg Mining Activity

Metres of mining face

369

600

1,000

1,700

Blasted face grade – gold (g/t)

4.66

6.71

6.79

7.53

Middle Elsburg Mining Activity

Metres of mining face

408

575

1,050

1,500

Blasted face grade – gold (g/t)

2.95

2.74

3.27

3.53

Blasted face grade – uranium (g/t)

480

500

560

610

Facelength (“FL”) Buildup

Gold (kg/m of FL blasted)

15

24

45

76

Uranium (kg/m of FL blasted)

1,077

1,206

2,607

4,232

Mill Production (combined)

Tonnes of ore milled (000s)

92

145

215

293

Notes:

1.        Face-length buildup is a metric to indicate the content of gold and uranium produced for a horizontal metre of blasted facelength.

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.        Q1 and Q2 grades for the upper Elsburg ore body include grade dilution from the low-grade shaft pillar de-stress cut which is scheduled for completion in October 2009.

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.

 

Outlook – MWS

At MWS, management estimates that the second gold plant module, known as the phase 1B expansion, is expected to produce gold – as per design specification – by the end of Q2 2010.

The first two uranium plant modules, which also form part of the phase 1B expansion project, are expected to be completed and producing at design specification before the end of Q3 2010. For the final phase of construction, management has decided to delay portions of the third uranium plant module until such time that higher uranium prices are expected to occur.

MWS:  Tailings Recovery and Production Forecast

Q1 2010

Actual

Q2 2010

Forecast

Q3 2010

Forecast

Q4 2010

Forecast

Tonnes of ore reclaimed (000s)

1,835

3,200

3,900

3,900

Average gold head grade (g/t)

0.42

0.40

0.41

0.40

Gold plant recovery (%)

44%

50%

54%

58%

Gold reclaimed and sold (oz)

10,676

18,000

28,500

28,500

Tonnes of uranium ore reclaimed (000s)

370

370

Average uranium concentrate grade feeding the plant(g/t)

368

368

Uranium plant recovery (%)

75%

75%

Uranium reclaimed (lb)

225,000

225,000

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.

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.

For further information, please contact:

Bob Tait, Vice President, Investor Relations at bob@firsturanium.ca

+1 416 342-5639 (office) or +1 416 558-3858 (mobile)

1240-155 University Avenue, Toronto, ON M5H 3B7

 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 processing and development plans and future plans and objectives of First Uranium are forward-looking statements (or forward-looking information) that involve various risks and uncertainties.  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.

Source: First Uranium

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