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Monday
Jul022012

First Uranium reports marginal increase in 2012 gold sales

 

JOHANNESBURG (miningweekly.com) – TSX- and JSE-listed First Uranium, which is selling its assets to AngloGold Ashanti and Gold One, on Monday reported a marginal increase in gold sales for its 2012 financial year ended March, of 146 445 oz, up from 142 630 oz in 2011.

The miner attributed the marginal increase to the 21% decrease in gold production out of its Ezulwini gold and uranium mine, about 40 km south-west of Johannesburg, which offset the 19% increase in gold sales out of the company’s subsidiary Mine Waste Solutions (MWS).

Total uranium sales rose sharply from 20 500 lb in the 2011 financial year to 82 862 lb in 2012, following the recommissioning of the uranium plant at Ezulwini in April 2011. According to Mining Weekly.

First Uranium is selling Ezulwini to Gold One for $70-million and MWS to AngloGold for $335-million to raise cash to pay off its debt. First Uranium expected to conclude and implement the AngloGold transaction by July 24, while the Gold One transaction was expected to be concluded by July 31.

The company increased its revenue 30% year-on-year to $195-million in the 2012 financial year, resulting in the corporation reflecting a $7-million gross profit from operations compared with $6-million in 2011.

During the reporting period, MWS produced and sold 99 003 oz of gold, in line with the downgraded forecast issued in the third quarter of 2012, of between 98 000 oz and 100 000 oz for the 2012 financial year.

MWS generated $132-million, a marked increase from $89-million in revenue in 2011, at an average cash cost of $687/oz of gold sold, up from $516/oz the previous year.

The 19% increase in gold sold in 2012 from 2011 was mainly attributable to the completion of the third gold module and the tailings storage facility, which boosted processing capacity. As a result, tons reclaimed rose 48% year-on-year.

However, the achievement was offset by challenges encountered around the composition of the mining mix that saw an 11% drop in recovered grade during the period under review.

The 33% year-on-year overall increase in cash costs was mainly driven by the increase in processing capacity, running costs and teething problems associated with the newly completed infrastructure, largely as a result of increased fuel, water and power use.

Ezulwini produced and sold 47 442 oz of gold in 2012 generating $63-million. This is a decrease from the 59 689 oz it sold in 2011, which generated $61-million in revenue. As a result of the lower-than-anticipated gold production, combined with a 34% increase in the average cash cost per ounce of gold sold, the mine’s gross losses increased to $48-million, from $46-million.

Revenue from uranium sold at Ezulwini increased from $1-million in the 2011 financial year, to $5-million in the 2012 financial year. It sold 82 862 lb of uranium in the year under review.

The current Ezulwini mine plan was targeting a gold output of about 50 000 oz for the 2013 financial year from an average monthly production of 44 000 t.

Despite the uranium sections of the mine having been closed and the uranium plant placed on care and maintenance, Ezulwini would realise revenue from uranium sales in the first quarter of 2013 related to the sale of the 25 000 lb of uranium carried over from uranium production in 2012, prior to the halting of uranium mining operations.

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