First Uranium to Refocus Ezulwini Mine Operations to Improve Profitability
TORONTO AND JOHANNESBURG, Dec. 19, 2011 /PRNewswire/ – First Uranium
Corporation (Toronto: FIU.TO) (JSE: FUM) (ISIN: CA33744R1029) (“First Uranium” or the “Company”)
announced today that it is assessing options to develop and implement a
new operating plan at the Ezulwini Mine in order to optimize cash flow
and overall profitability. The focus of the new operating plan will be
on safety, improving mining efficiency, and reducing fixed costs by
mining ore from the more profitable sections of the mine. Today’s
announcement is part of the Company’s strategic review announced on
July 12, 2011, and the new plan is intended to provide a stable
platform for the sustainability of the Ezulwini Mine.
One of the steps in the process is consultation with the unionized
employees at the Ezulwini Mine as mandated by Sections 189A and 189 of
the South African Labour Relations Act (the “SALRA”). This process
will begin with a view to minimizing contemplated potential job
losses. In accordance with the SALRA, the consultation period is for
60 days from the date the prescribed notice is given to the unions.
First Uranium President and CEO, Deon van der Mescht said: “This is a
necessary step if we are to safeguard the considerable investment made
to date in this operation and the future sustainability of the mine.
For the past nine months, the Ezulwini Mine has been the subject of an
intensive turn-around process. We have devoted significant resources
to position this operation to achieve the production levels necessary
for it to be profitable. The extremely unfortunate fatal accidents in
the latter half of the calendar year have had a significant impact on
employee morale and productivity, and as such the expected improvement
in production has not been forthcoming. We will, therefore, as
required under South African labour laws, give notice today pursuant to
Section 189(3) of SALRA in order to allow for contemplated possible
employee reductions at the mine as part of developing a new operating
plan that will focus on mining more profitable areas of the mine and
reducing fixed costs in-line with the scale of the operation. The new
operating plan may result in up to 1,850 employees being affected. The
operation currently employs approximately 3,745 people.
“While the Company continues to believe in the inherent value and
potential of the Ezulwini Mine, decisive action is required in order to
stem ongoing operating losses. Although it is the holiday season and
the timing is unfortunate, management has determined that action must
be taken now to mitigate the effects of the Christmas shut down and
provide employees with an opportunity to increase productivity levels
while reaching a consensus around the nature and scope of changes
necessary to implement the new operating plan.
The Company’s operation at the Mine Waste Solutions tailings
reprocessing project is not involved in the process being undertaken at
the Ezulwini Mine.
First Uranium will conduct a conference call with investors to discuss
the information in this news release on Tuesday December 20, 2011 at 09h00 (Toronto time) and 15h00 (South African time).
Conference Call Numbers:
Canada & USA Toll Free Dial In: 1-800-319-4610
South Africa Toll Free Dial In: 0800-981-705
Other International Locations Dial In: +1-604-638-5340
Callers should dial in 5 – 10 min prior to the scheduled start time and
simply ask to join the First Uranium call.
Conference Call Replay Numbers:
Canada & USA Toll Free: 1-800-319-6413
Outside Canada & USA Call: +1-604-638-9010
Code: 2128, followed by the # sign
Duration: Available for 30 days
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 new gold and uranium plants
at the Ezulwini Mine and the ramp-up of production at the Mine Waste
Solutions (MWS) tailings recovery facility following the completion of
a significant gold capital expansion program in May 2011. Both
operations are located in South Africa.
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.
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, including without
limitation, the statements regarding the new operating plan for
Ezulwini Mine. No assurance can be given that the Company will be
successful in developing and implementing a new operating plan that
achieves the desired results. 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 Corporation