Money for projects at First Uranium | Money for projects at First Uranium |
| CHARLOTTE MATHEWS | Published: 2009/08/18 06:57:54 AM |
GOLD and uranium miner First Uranium had enough funding to complete its developing projects at Mine Waste Solutions (MWS) and the Ezulwini underground mine, CEO Gordon Miller said yesterday.
The estimated cost of completing the two projects was 266m, of which 232m would be spent in the next 12 months.
First Uranium held 123m in cash at the end of June and had arranged a 20m one-year credit facility with Simmer & Jack, its 37% shareholder.
It was negotiating with a local bank for a longer-term debt facility.
These resources, together with the cash that would be generated by the two projects, should be sufficient.
If more money was needed, management would consider another South African project financing facility or would reprioritise its spending, the company said.
Miller said MWS had received government approval of the site for its new tailings dam last month , although The Weekender has reported that local residents were strongly opposed to its location.
Other achievements for First Uranium included reaching a preliminary agreement to supply the Koeberg nuclear reactor in the Western Cape with uranium between 2011 and 2017. At MWS, a tailings recovery operation, the group is completing a third module at its gold treatment plant and two uranium plant modules.
At Ezulwini, it is developing an underground mine that will feed its plants with gold and uranium.
Investment in these projects, together with exchange rate movements, contributed to a net loss for the June quarter of 0,22 a share compared with a loss of 0,04 in June last year.
The group sold 3378oz of gold from Ezulwini in the June quarter and 10676oz from MWS.
Revenue for the quarter almost doubled to 12,9m from 6,8m a year before, but the cost of sales was 15,6m (3,3m) because fixed costs at Ezulwini are being covered by only limited early-stage production.
Miller said Ezulwini was expected to be cash-positive by the December quarter.
At MWS, gross profit improved because of an increase in material processed and higher recoveries.
First Uranium made a foreign exchange loss of 16,4m for the quarter, against 0,5m a year ago, because it had to translate the value of its assets and liabilities in rands and Canadian dollars into a weaker US dollar, its reporting currency.