TORONTO/JOHANNESBURG (Commodity Online): First Uranium Corporation is going great guns in South Africa with its second gold plant going operational.
The second gold plant opened at its Mine Waste Solutions tailings recovery operation in South Africa. The company is hopeful that with the gold prices soaring across the globe, this is the right moment to ramp up production.
According to the company, having met design specifications for throughput and gold recovery rates, the new gold plant has a production life expectancy of 15 years. Over the next 12 months beginning October 1, 2009, the new gold plant is expected to produce approximately 55,000 ounces of gold.
The additional cash flow from doubling gold production at MWS is expected to partially offset the necessary capital expenditures to complete the expansion of the MWS operation.
The company hopes that the cash resources of $123 million at June 30, 2009 and the cash forecast to be generated from the sale of gold and uranium, together with $20 million Simmer and Jack Mines credit facility, will be sufficient to fund the completion of the current capital projects at the company’s two operations.
To provide a buffer in the event of a funding shortfall due to volatility in uranium and gold prices, exchange rates or production rates, management is in discussion to advance its long-standing intention to secure a project financing facility for MWS in South Africa.
In the last fiscal quarter, MWS’s Phase 1A gold plant produced 11,007 ounces of gold at a cash cost of $338 per ounce, placing the MWS operation among the lowest cost gold mines in South Africa.
The phase 1B uranium plant and the third and final gold plant will be completed on schedule for their planned startups in December 2009 and by June 2010, respectively, the company said.
The efficiency of gold recovery at Phase 1A gold plant improved by 9 per cent so far this quarter, and is expected to increase again during September. Gold recovery and unit operating costs at both gold plants are expected to improve even further when these plants begin to operate in series with the Phase 1B uranium plant, which we plan to begin operating in December 2009.
