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First Uranium Corporation – Production Update for the Three Months Ended December 31, 2011

January 26, 2012

All amounts are in US dollars unless otherwise noted.

TORONTO AND JOHANNESBURG, Jan. 26, 2012 /PRNewswire/ – 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            April 1, 2011       Q1 2011            April 1, 2010
                       - June 30,                             - June 30,
                       2011                                   2010

    Q2 2012            July 1, 2011        Q2 2011            July 1, 2010
                       - September                            - September
                       30, 2011                               30, 2010

    Q3 2012            October 1,          Q3 2011            October 1,
                       2011 -                                 2010 -
                       December 31,                           December 31,
                       2011                                   2010

    Q4 2012            January 1,          Q4 2011            January 1,
                       2012 - March                           2011 - March
                       31, 2012                               31, 2011

    2012 YTD           April 1, 2011       2011 YTD           April 1, 2010
                       - December                             - December
                       31, 2011                               31, 2010

    FY 2012            April 1, 2011       FY 2011            April 1, 2010
                       - March 31,                            - March 31,
                       2012                                   2011

    FY 2013            April 1, 2012       Q1 2013            April 1, 2012
                       - March 31,                            - June 30,
                       2013                                   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.”

SUMMARY OF Production Results 

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         14,833         5,107          4,822         4,903
    reclaimed
    (000s)

    Average gold           0.325         0.319          0.348         0.309
    head grade
    (g/t)

    Gold plant               49%           51%            51%           44%
    recovery (%)

    Gold sold (oz)        74,141        25,142        27, 453        21,546

    Ezulwini Mine                                                          

    Tonnes of ore        474,914       148,072       162, 577       164,265
    milled

    Average gold            2.58          2.40           2.53          2.79
    recovery grade
    (g/t)

    Gold sold (oz)       39, 374       13, 406        13, 076        12,892

    Uranium               87,254        30,887         36,006        20,361
    produced (lbs)

EZULWINI MINE

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.

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.

MINE WASTE SOLUTIONS

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 # 2 tailings dam as well as Buffelsfontein # 3
tailings dam. The planned contribution from the high grade
Buffelsfontein # 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 # 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 # 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.

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.

MWS PERMITTING

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 RESOURCES

As 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.

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. 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

SOURCE First Uranium Corporation


Source: PR Newswire