First Uranium pushes on after first uranium

Tuesday, 18 August 2009

First Uranium is ramping up production at its South African gold and uranium operations following the first yellowcake production at its Ezulwini mine, but has put the construction of a third uranium module at its other South African site on hold.

The company reached the milestone of first yellowcake production at Ezulwini during the quarter ended 30 June 2009 (which the company refers to as Q1 2010), and dispatched its first batch to a local calcining facility in July. "First Uranium joined a small and exclusive group of uranium producers this past quarter," said company president and CEO Gordon Miller.

 

Ezulwini (Image: First Uranium)

Although the first of two streams of the 100,000 tonne per month Ezulwini uranium plant has now been commissioned, it is not yet deemed to be in commercial operation and the company has therefore not reported any uranium production or revenues in its newly released quarterly figures. However, according to Miller, the gold and uranium mine is expected to turn "cash positive" in Q3 2010 - that is, by the end of 2009.

The underground Ezulwini mine operated from the 1960s and produced over 6000 tU before it was put into a state of care and maintenance in 2001. Five years later, First Uranium acquired the gold and uranium mine, which it said contains some 2700 tU in measured and indicated resources and 78,000 tU of inferred and additional resources. Gold production restarted on a toll-milling basis in 2007, with First Uranium commissioning its first gold mill at the site in 2008.

The company's other South African uranium and gold project is the Mine Waste Solutions (MWS) operation to recover resources from old mine tailings at the Buffelsfontein mine. The first two uranium plant modules at the MWS project are also expected to be completed and in production by the end of 2009, but the company has now announced that it will delay portions of the third uranium plant module "until such time that higher uranium prices are expected to occur." Nevertheless, the company is forecasting uranium production of 225,000 pounds U₃O₈ (86.5 tU) per quarter from Q3 2010 onwards.

Koeberg bound?

First Uranium has not yet signed any uranium supply contracts, but says it has entered into a letter of intent to supply South African utility Eskom with uranium for the country's only operating nuclear power plant, Koeberg, covering the period 2011-2017. According to the company, the long-term supply agreement is due to be signed by the end of Q2 2010 (in other words, by the end of September 2009). After calcining, First Uranium's yellowcake will be shipped overseas for conversion and sale to nuclear utilities so the company warns that any sales are likely to lag about three months behind production.