Thankyou for your note and for your interest in First Uranium.
Themoney being raised is primarily for MWS as the majority of the capital projectat Ezulwini has now been completed. With regard to your question, the answeris as we disclosed in our February 15, 2010 Management’s Discussion and Analysisdisclosure document for the quarter ended December 31, 2009. On page 3 of thatdocument (which I have attached to this e-mail for your reference) wewrote:
The withdrawal of the EA not only caused a delay in theconstruction of the TSF, it has also disrupted the above-mentioned advancedfinancing options, and along with the much slower than expected productionbuild-up at the Ezulwini Mine, has severely compromised First Uranium’sfinancial position.
Management estimates that,based on the current revised and restructured mine plans as discussed under theOperations Review and Outlook sections of this MD&A, the additional cashrequired would be approximately $50 million. The current revised andrestructured mine plans are based on the assumption that it will take theCorporation up to a year to resolve the permitting issue and that the futuredevelopment projects at MWS will only resume in a year’s time, upon resolutionof the permitting issue. If, however, in the next threemonths the permitting issue was to be resolved and the capital projects at MWSwere to resume, the additional cash required would be approximately $100million. These funding requirements do not include any cash outflowrelating to the potential $42 million penalty to GW or the repayment of the$22.4 million Facility with Simmer and Jack Mines, Limited (“Simmer & Jack”)(see Commitments and Contingencies section to this MD&A).
The Board of Directors of the Corporation has formed aSpecial Committee to review the financial position of the Corporation and toreview and advise the Corporation on strategic alternatives that may beavailable. To this end, the Special Committee and its advisors have beenactively engaged in discussions with respect to alternative financingarrangements and is assessing various financing alternatives, however the termsof these alternatives are likely to be more onerous than the previous financingoptions.
Ihope that answers your question.
Regards,
Bob