Ezulwini Will Be a Cornerstone of First Uranium

Ezulwini Will Be a Cornerstone of First Uranium

ONE of the cornerstones of the planned $300m development of the assets of First Uranium, which Simmer & Jack plans to list in Toronto, will be its Ezulwini gold and uranium mine.

This mine, known formerly as the Randfontein Number 4 Shaft, is one that previous owners have tried, and failed, to mine economically since the 1990s.

But Simmers, through its new subsidiary, believes that it can succeed.

Simmers and First Uranium CE Gordon Miller said last week there were two main reasons for confidence. The first was that gold and uranium prices had strengthened considerably since 2000.

The value of ore in the ground had trebled since 2001 because of rising gold and uranium prices and had doubled since 2003. In 2000, the in situ value was $350/ton, and it was now $1400/ton.

The second reason was that Simmers had spent two years studying the mine, and more particularly how the substantial gold that remained in the shaft pillar could be extracted safely and economically, Miller said.

Ezulwini is 40km from Johannesburg, near Westonaria. According to the First Uranium prospectus, Western Areas Gold Mining Company started mining on the site in 1961 and the mine was sold to Randfontein Estates Gold Mining in 1997. In January 2000, Harmony acquired Randfontein Estates and continued mining there until July 2001, when it was closed.

The mine has produced gold and sometimes uranium, but uranium recovery ceased in 1997. The main reasons for closing the mine were a shortage of capital, compounded by weak gold and uranium prices.

There were two ore-bearing reefs on the property, the Upper Elsburg Reef, which had been mined to a depth of about 1000m, and the Middle Elsburg reef, about 400m below the Upper Elsburg.

There was also a substantial unexploited resource around the original shaft pillar.

Miller said about 50 holes had been drilled so far to improve definition of the resource. The total estimated measured and indicated mineral resource was 1,4-million ounces of contained gold in the shaft pillar and 641000 ounces in Middle Elsburg. Middle Elsburg also contained 6,8-million pounds of uranium.

No one studied the resource in the shaft pillar before because the technology was not available to mine it, Miller said.

A shaft pillar is the area around the shaft that is left unworked to protect the shaft and surface areas from subsidence. Extracting shaft pillars has been done at other mines in recent years, but each shaft presents a unique set of problems.

Miller said individuals who knew the mine were hand-picked to investigate the feasibility of mining the shaft pillar at Ezulwini, and the mining risk was now very well understood.

The prospectus said there had been ground movement around the Ezulwini shaft in the past because of a weaker section of rock in the vicinity.

First Uranium proposed to overcome this by mining out a portion, called a destress cut, and filling the cut with backfill. That would make it possible to mine the rest of the ore without stress-related problems.

The expected total cash cost of the Ezulwini project was $270/oz of gold including a credit of $122/oz for the uranium.

Including a capital cost of $54/oz over the life of the mine, the total production cost would be $324/oz of gold.

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