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MEI Online: Commodities: Metallic Ores: Gold: Latest News: April 10th 2007


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:: First Uranium Buys Gold Processing Plant

Canada-based uranium development company First Uranium has agreed to buy Mine Waste Solutions (MWS) and its subsidiary Chemwes, for the equivalent of R200-million in First Uranium shares, the company said on Wednesday.

First Uranium has two gold and uranium projects in South Africa, Buffelsfontein and Ezulwini, which it is working on bringing to production.

MWS owns and operates a gold-mine tailings and reprocessing plant next to the company’s Buffelsfontein tailings-recovery project and the acquisition is expected to increase the life of the operation by three years, from 14 to 17 years, the company said.

The MWS gold plant has a proven capacity for processing 570 000 t/m, First Uranium said in a note to shareholders.

Other assets include three tailings dams, from which gold and uranium can be recovered, as well as rock dumps, and the deal would will increase the Buffelsfontein project net present value to $240-million, from the $211-million originally planned.

“The acquisition of the MWS gold plant will eliminate the necessity of building the first gold plant planned for the Buffelsfontein project, reducing both the time and capital required to begin gold production," First Uranium said.

"This acquisition is very positive for our Buffelsfontein project as we will be able to begin a significant amount of our gold production one year ahead of schedule, establish a lower cost for our first gold plant module, and begin the first phase of uranium production at twice the rate previously contemplated, thus achieving peak uranium production eight months ahead of schedule," First Uranium president and CEO Gordon Miller said.

In the first year the company expects to recover approximately 43 000 oz of gold, at a cash cost of $317/oz, including royalties.

By the end of 2007, the company also expects to complete a pipeline from the Buffelsfontein site to the MWS gold plant to process tailings with the highest gold grade available from select areas of the Buffelsfontein site.

First Uranium expects to increase the gold plant’s average monthly processing capacity to 1,2-million tons a month by November 2008, with the construction of a 600 000 t/m plant module.

The company had originally planned to build a uranium plant at the Buffelsfontein site by June 2008, but it now plans to postpone commissioning to November 2008, but with twice the previously contemplated capacity.

The addition of the MWS tailings deposition capacity will enable First Uranium to process 40 000 t of tailings a day as soon as the uranium plant is completed, compared with its original plan of processing 20 000 t/d until June 2009, and then increasing its processing to 40,000 tonnes per day.

The acquisition will also allow the company to move forward by eight months the construction of the third plant module, which is designed to increase processing to 60 000 t/d.




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