Capital costs for First Uranium’s (FIU-T, FURAF-O) Buffelsfontein gold-uranium tailings recovery project in South Africa have increased 76% to US$260 million, compared with a preliminary assessment estimate released in May.
On the upside, a recently released prefeasibility study puts annual uranium production at 20 million lbs. U3O8 — 36% higher.
The company will immediately start construction to expand its existing gold plant, as well as the initial modules for a new uranium plant. Commissioning for the uranium plant is expected next November, while the gold plant expansion should be ready for November 2009.
Gold production is projected to be just 2% lower at 126,000 oz. per year. The company began producing gold last June. The operation has a capacity to process 500,000 tonnes of tailings per month, but First Uranium plans to increase that to 633,000 tonnes with the expansion.
The mine life will stay the same at 16 years, but cash costs for production of both gold and uranium have increased: gold cash costs are estimated to be 20% higher at US$264 per oz., while uranium cash costs are up 9% to US$24 per lb.
Overall recovery rates have improved to 33% from 27%, but will be lower to start off with. The company decided to add an atmospheric leach process and to refine the pressure-leach process, which will supply an acid byproduct for the gold circuit to improve gold recovery.
Flotation recovery is projected at 36.8%, up from 30%, but the plant is expected to start off with a recovery rate of 75%, down from 90%, by using the atmospheric leach process at startup in November 2008. The company says it will have completed sufficient testing by November 2009 to put the pressure-leach stage into action, which is expected to increase the plant recovery rate back to 90%.
First Uranium has increased the price assumptions for both gold and uranium. The gold price, previously US$500 per oz. across the board, now ranges from US$737 per oz. for March 2009 to US$635 per oz. beyond March 2012.
The new study uses a uranium price of US$104 per lb. for March 2009, dropping to US$45 per lb. by 2012, compared with US$50 previously used for the entire 4-year span.
The company has upgraded its mineral resources to reserves.
Proven and probable reserves now stand at 326.9 million tonnes grading 0.28 gram gold per tonne for nearly 3 million oz. gold, and 0.076 kg per tonne (0.0076% U3O8) for 54.85 million lbs. U3O8.
A new tailings dam location is also being discussed and will likely be farther from the project than originally planned, but will have less uranium, sulphur and pyrite, as well as a better design that will reduce erosion.
Gold production is projected to be just 2% lower at 126,000 oz. per year.
Be the first to comment on "First Uranium builds new plant"