PRODUCTION UPDATE FOR THE THREE MONTHS ENDED DECEMBER 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 its production results for the three months ended December 31, 2011 ("Q3 2012") .
Abbreviation | Period | Abbreviation | Period |
Q1 2012 Q2 2012 Q3 2012 Q4 2012 2012 YTD FY 2012 FY 2013 | April 1, 2011 - June 30, 2011 July 1, 2011 - September 30, 2011 October 1, 2011 - December 31, 2011 January 1, 2012 - March 31, 2012 April 1, 2011 - December 31, 2011 April 1, 2011 - March 31, 2012 April 1, 2012 - March 31, 2013 | Q1 2011 Q2 2011 Q3 2011 Q4 2011 2011 YTD FY 2011 Q1 2013 | April 1, 2010 - June 30, 2010 July 1, 2010 - September 30, 2010 October 1, 2010 - December 31, 2010 January 1, 2011 - March 31, 2011 April 1, 2010 - December 31, 2010 April 1, 2010 - March 31, 2011 April 1, 2012 - June 30, 2012 |
For Q3 2012, the Company reported a 5% decrease in gold
ounces sold and a 14% decrease in uranium produced compared
to the gold ounces sold and uranium produced in Q2 2012. The
Company sold 38,548 ounces of gold in Q3 2012 compared to
40,529 ounces of gold in Q2 2012. Uranium produced was 30,887
pounds in Q3 2012 compared to 36,006 pounds in Q2 2012.
Said CEO Deon van der Mescht:
"The third quarter proved particularly challenging from a
safety and production perspective, especially for Ezulwini
Mine. The three fatal accidents in the latter half of the
2011 calendar year had a significant negative impact on
employee morale and productivity. This is reflected in the
lower than anticipated production figures which in turn
necessitated the restructuring of the Ezulwini Mine in order
to secure the future of this operation."
The following table summarizes the production from each operation during Q3 2012, compared to the previous quarters in FY 2012:
2012 YTD | Q3 2012 | Q2 2012 | Q1 2012 | |
MWS | ||||
Tonnes of ore reclaimed (000s) Average gold head grade (g/t) Gold plant recovery (%) Gold sold (oz) | 14,833 0.325 49% 74,141 | 5,107 0.319 51% 25,142 | 4,822 0.348 51% 27, 453 | 4,903 0.309 44% 21,546 |
Ezulwini Mine | ||||
Tonnes of ore milled Average gold recovery grade (g/t) Gold sold (oz) Uranium produced (lbs) | 474,914 2.58 39, 374 87,254 | 148,072 2.40 13, 406 30,887 | 162, 577 2.53 13, 076 36,006 | 164,265 2.79 12,892 20,361 |
Following two fatal accidents in August and September 2011,
the mining team managed to build good production momentum
into late October and early November, but on November 14,
2011 the mine regrettably suffered another fatal accident as
a result of a fall of ground. This resulted in a mandatory
stoppage which although necessary, had the effect of
undermining the progress that had been made to that
point.
As a result, in Q3 2012 gold ounces sold by the Ezulwini Mine
improved only slightly (3%)
compared to Q2 2012 and uranium production was 14% down
compared to Q2 2012.
As previously reported, the Ezulwini Mine has been the
subject of an intensive turn- around process during the past
nine months. Management has devoted significant resources to
helping the operation achieve the production levels necessary
for it to be sustainable. The expected improvement in
production did not however materialize, primarily as a
consequence of the extremely unfortunate fatal accidents in
the latter half of the calendar year which impacted
negatively on morale. As a consequence, on December 19, 2011,
management announced a planned restructuring in accordance
with Section 189A and 189 of The South African Labour
Relations Act and, at the same time, stopped mining of all
marginal production panels. The new operating plan may result
in up to 1850 jobs being affected. The consultation process
with organized labour is well underway and management hopes
to conclude the process within the mandatory
60-day period.
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Although the new operating plan is not yet completed, it is
clear that the Ezulwini Mine will not achieve its previously
disclosed target of between 70,000 to 80,000 ounces of gold
sold and uranium sales of between 110,000 and 130,000 pounds
for FY 2012.
In previous updates, the Ezulwini Mine reported on various
business development initiatives aimed at leveraging the
available capacity of the gold and uranium plant
infrastructure, including the uranium concentrate float plant
project and possible toll treatment of third party ore. Given
the current restructuring of operations at the mine and
within First Uranium as a whole, all business development
initiatives of this type have been placed on hold for future
review.
The revised business plan is being designed to optimize cash
flow and result in the overall profitability of Ezulwini.
At MWS, the 6% quarter on quarter improvement in throughput
was offset by a lower delivered feed grade which decreased by
8% from 0.348g/t in Q2 2012 to 0.319g/t in Q3
2012.
The first of MWS's three gold modules processes material from
the higher grade Buffelsfontein No. 2 tailings dam as well as
Buffelsfontein No. 3 tailings dam. The planned contribution
from the high grade Buffelsfontein No. 2 tailings dam was not
realised, primarily due to the inability to reclaim the
remnant footprint material at the desired rate with the knock
on effect of an altered mining mix with a lower delivered
feed grade. This lower-grade mining mix is anticipated to
continue until the end of Q4
2012, by which time process improvements designed to enhance
recoveries and mitigate the impact of a lower grade, will
have been implemented.
The second gold module is performing well and this
performance is expected to continue for the remainder of FY
2012 and into FY 2013.
The third gold module processes material from the
Hartebeesfontein No. 1 tailings dam which as previously
reported has posed some challenges in terms of lower than
planned grade as well as material particle size. By blending
the Hartebeesfontein No. 1 tailings dam material with
material from higher grade remote satellite dams, the overall
grade delivered to the third gold module as well as recovery
performance has been preserved, albeit at slightly below
planned grade. During Q3 2012 however, the required
contribution from the remote satellite dams was not fully
realized which impacted negatively on grade delivered and
hence gold production. The requisite contribution from the
remote satellite dams can be sustained until the end of FY
2012 where after process improvements are required to
maintain circuit performance and preserve gold production.
Test work is currently underway to deal with this challenge
and is expected to continue into Q1 2013.
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As a result of the challenges encountered with the first and
third gold modules, guidance for gold production for FY 2012
has been downgraded from a range of 105, 000 ounces and 115,
000 ounces to between 98,000 ounces and 100,000 ounces.
As reported in the Company's news release issued on January 4, 2012, the South African Water Tribunal dismissed an appeal by a local pressure group, the Federation for a Sustainable Environment, against the issuing of MWS's Water Use Licence and the Tribunal has closed its file on the matter. While MWS is operating legally in terms of current authorizations and legislation, discussions with the DMR continue regarding the new order mining right for MWS.
CASH RESOURCESAs at December 31, 2011, the cash reserves of the Company were US$10.6 million.
About First Uranium Corporation
First Uranium Corporation (TSX:FIU, JSE:FUM) is focused on
its goal of becoming a low- cost producer of gold and uranium
through the expansion of the underground development to feed
the gold and uranium plants at 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.
For further information, please contact: Scot Sobey scot.sobey@firsturanium.comTel: +27 82 786 1039
Gail Strauss, gailstrauss@mweb.co.za
Tel: +27 82 936 8481
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.
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
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