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First Uranium announces financial results for the three and twelve months ended March 31, 2011

First Uranium Corporation (TSX:FIU), (JSE:FUM) (ISIN:CA33744R1029) (“First Uranium” or “the Company”) today announced total gold sales for its financial year ended March 31, 2011 (“FY 2011”) of 142,630 ounces of gold, which is a significant increase over the 91,657 ounces sold at the end of March 31, 2010 (“FY 2010”).

The Company’s consolidated revenue of $172 million for FY 2011, an increase of 86% from $93 million in revenue for FY 2010, resulted in the Company reflecting a $20 million gross profit margin from operations in FY 2011 compared to a loss of $18 million in FY 2010. Remembering that First Uranium remains in a capital development and growth phase, the consolidated pre-tax loss for the year was $76 million, which is a 19% improvement over the pre-tax loss of $94 million in FY 2010.

During FY 2011, Mine Waste Solutions (“MWS”), which is a large tailings retreatment operation that is currently extracting gold from 15 tailings dams, produced and sold 82,941 (FY 2010: 62,019) ounces of gold generating $93 million (FY 2010: $61 million) in revenue at an average Cash Cost* of $483 (FY 2010: $392) per ounce of gold sold. The 34% increase in gold sold for FY 2011 from FY 2010 was mainly attributable to the additional production from the second gold plant module, along with the 8% improvement in gold recoveries. The 13.4 million tonnes processed in FY 2011 was 21% higher compared to FY 2010. The 65% overall increase in costs, year-on-year, was mainly driven by the increase in production in Q2 2010, combined with the impact of the stronger South African Rand in FY 2011.

The Ezulwini Mine, which is an underground gold and uranium producer that is currently in a production build-up phase, produced and sold 59,689 (FY 2010: 29,638) ounces of gold generating $78 million (FY 2010: $31 million) in revenue at an average Cash Cost* of $1,691 (FY 2010: $2,600) per ounce of gold. The 150% increase in revenue reflects the overall increase in throughput, grade and gold price over the comparative periods. Although costs increased by 31% year-on-year, the costs did not increase in direct correlation to the revenue increases, due to the mine’s fixed operating costs being spread over higher production than the comparative periods, resulting in the decrease in Cash Cost* compared to FY 2010. Consequently the mine’s gross losses in FY 2011 decreased by 47% compared to FY 2010. Only 20,500 pounds of uranium was sold in FY 2011, as a result of a failure of two Ion Exchange (“IX”) columns in the uranium plant in August 2010, which resulted in the manufacturing of two new columns and a $1.5 million impairment of the two failed columns.  The uranium plant has since been successfully re-commissioned.

During FY 2011, First Uranium utilized $48 million (FY 2010: $49 million) of its cash resources to fund its operating activities. The Company spent $103 million (FY 2010:  $215 million) on capital projects in FY 2011 comprising mainly the construction and successful commissioning of MWS’s third gold plant module, including adjoining infrastructure (“Phase 2”) and its new tailings storage facility (“TSF”). As at March 31, 2011, the Company’s remaining cash and cash equivalents amounted to $50 million.

On April 26, 2010, First Uranium raised $142 million in net proceeds through a private placement offering of Cdn$150 million in secured convertible notes due March 31, 2013.

On March 1, 2011, the Company concluded a public offering of 46 million common shares at a price of Cdn$1.00 per share. The agents to the offering exercised in full their over-allotment option to acquire an additional 6 million common shares at the same price, resulting in First Uranium selling an aggregate of 52 million common shares for total gross proceeds of $53 million.

Deon van der Mescht commented, “This capital raising was concluded shortly before the devastating series of earthquakes and the accompanying tsunami that hit the Japanese island of Honshu during March 2011. The unfolding events at the Fukushima nuclear plant continue and the impact on physical uranium demand had a destructive effect on most uranium stocks. While there has been a level of recovery for most uranium operators, we remain under pressure. This is ironic when one considers that First Uranium is largely a gold producer, having only recently recommenced uranium production at the Ezulwini Mine”.

First Uranium’s total gold sales from its two operations for the year ended March 31, 2012 are forecast to be in the range of 215,000 to 250,000 ounces, whilst anticipated uranium sales are forecast to be in the range of 250,000 to 300,000 pounds. The uranium plant at MWS is largely complete. Commissioning of this plant will involve significant upfront working capital investment in in-process inventory. Management is considering a temporary deferral in the commissioning of the uranium plant in light of currently depressed uranium prices and its objectives of focusing cash resources towards the maturity of the 4.25% convertible debentures in June 2012 and the ramp up of the Ezulwini Mine.

Read the full news release here.