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Trading Symbol: SXR - Toronto Stock Exchange, JSE Limited (Johannesburg
Stock Exchange)
TORONTO, Ontario, and JOHANNESBURG, South Africa, Jan. 30 /CNW/ - sxr Uranium One Inc. ("Uranium One") is pleased to provide an update on progress at its development and exploration projects as well as to announce several key management changes.
Dominion Reefs Uranium Mine
The Dominion Reefs Uranium Mine (DRUM) remains on schedule for commencement of production on February 28, 2007 and the production for the year 2007 projected in the October 26, 2006 independent technical report on the Dominion project feasibility study is expected to be met.
Permitting
Uranium One received its new order mining right for Dominion, as well as approval for its Environmental Management Programme in October 2006. In December 2006 Uranium One also received an additional water discharge permit from the South African Department of Water Affairs and Forestry to release an additional 70 l/s. This permission is in addition to the water use license granted in July 2006 and was required to enable the mine to discharge shaft water that is not required for the operation at present.
The Company has been advised by the National Nuclear Regulator of South Africa (the NNR) that its application for the Certificate of Registration required in connection with the Project has been approved in principle and issuance of the Certificate is expected imminently. In accordance with applicable regulatory requirements, applications for amendments to the Certificate of Registration relating to subsequent stages of the Project will be submitted by Uranium One to the NNR in due course.
Dominion Mill
The uranium plant is being commissioned in a staged approach and is on target for the start-up of production under atmospheric leach conditions during the first quarter of 2007. The pressure leach section will then be brought on line during April 2007. This staged approach facilitates a quicker ramp-up of production and recovery rates.
The crushing, milling and densification circuits were successfully commissioned on November 21, 2006. Gold ore and slimes material are currently being processed through these circuits. At present, the water, sulphuric acid, lime and ammonia storage facilities as well as the supply pumps and services are being commissioned. The coal-fired boiler has been cold commissioned and is now being hot commissioned.
The plant design allows for the pre-leach and pressure leach circuits to be bypassed. This allows for the staged commissioning of the circuit, from the crushing and milling stages through to atmospheric leaching, counter current decantation thickeners, pin bed clarifier, solvent extraction and ADU production. The more complex pressure leach circuit will be commissioned once the rest of the plant is operating satisfactorily. The brick lining for the first autoclave is scheduled for completion in February 2007 and is scheduled for cold commissioning in March 2007, followed by hot commissioning in April 2007. The commissioning of the pressure leach circuit will bring the plant up to full design efficiency and design throughput of 100,000 tonnes per month per autoclave. The second autoclave will be ready for commissioning in August 2007, thus increasing plant capacity to 200,000 tonnes per month.
The plant production ramp up is initially expected to exceed the ore production from underground and spare plant capacity will be filled by processing uranium and gold bearing slime from the Dominion dump resource. Test work has shown good recoveries are obtainable from the slime material and an 80,000 tonne per month hydraulic sluicing facility has been commissioned to supplement production from underground.
Mine Construction
At the Rietkuil Section, total development of the R1 decline stands at 1,213 metres. The Rietkuil incline shaft has been dewatered and re-commissioned to 5 level, where mine development operations have commenced. At the Dominion Section, development of the D1 and D2 declines total 690 and 280 metres, respectively. Mine development operations at the Dominion Section have commenced on 1 level.
Underground mine development is at an advanced stage, with over 3,800 metres of footwall development. In addition, approximately 458 metres of working face has now been opened up and stoping has commenced. Stoping at the Rietkuil Section commenced on January 3, 2007 and blasting continues on a daily basis. In the Dominion Section, the first blast on the D2 reef horizon took place on January 13, 2007.
DRUM Resource Update
On January 17, 2007, Uranium One announced an updated resource estimate for the Dominion Reefs Uranium Mine. This update showed a 37% increase in the Indicated uranium resources over the estimate reported in June 2006. The current mineral resource estimate shows an Indicated uranium resource of 36.4 million tonnes at a grade of 0.81 kg/tonne, containing 64.9 million pounds U(3)O(8). The focus of the current and ongoing exploration is to further increase the Indicated resource base by upgrading existing Inferred resources, such that mine planning may be expedited for production purposes and to evaluate the Company's ability to expand the rate of production to approximately 7.0 million pounds by 2012.
Potential Expansion of DRUM
The feasibility study for the Dominion Reefs Uranium Mine considered Phase 1 of the current mine plan, whereby an extraction rate of 200,000 tonnes per month of ore is planned for a 10 year duration, attaining in excess of 4.0 million lbs U(3)O(8) per annum at peak production. A preliminary assessment for Phase 2 was also presented and has been designed to sustain production rates at 200,000 tonnes per month for an additional 20 years.
Conceptual studies on Phases 3 and 4 of the mine plan are currently being undertaken and are scheduled to be completed by Q3 2007. Phase 3 and Phase 4 consider an increase in throughput capacity from 200,000 tonnes per month to 300,000 tonnes per month and 400,000 tonnes per month, respectively.
Current exploration activities are focussed on expanding the Indicated resource base in anticipation of supporting mine planning for the Phase 3 and Phase 4 expansions. This is being achieved through the delineation of down dip extensions of the higher grade channels and by delineating new shallow orebody extensions such as at Dominion North.
Access in the shallower (less than 500 metres below surface) areas will be by additional declines. Vertical shafts are planned to access the deeper areas, with a 1,000 metre deep vertical shaft being considered for the down dip extensions in the Rietkuil area.
A definitive cost estimate for expanding the plant capacity to 300,000 tonnes per month is being conducted by Bateman Africa. This expansion would include the addition of a SAG (semi-autogenous grinding) mill, a separate 100,000 tonne per month counter current decantation circuit, an additional autoclave, boiler and the expansion of the present solvent extraction circuit. The existing design and plant lay-out would allow for this expansion, with full integration into the existing plant.
A further increase in effective plant capacity is planned through the introduction of radiometric ore sorting after primary crushing. A 120 tonne per hour pilot plant has been ordered at a cost of US$4.3 million and will be constructed and commissioned by the end of 2007. Test work has indicated that in excess of 25% of the ore can effectively be sorted and discarded as waste material. Similar plants at other uranium operations (such as Rio Tinto's Rossing Uranium Mine in Namibia) have successfully proven the concept of radiometric sorting. It is anticipated that a full scale radiometric sorting plant could potentially increase plant throughput to 400,000 tonnes per month (4.8 million ore tonnes per year sorted to 3.6 million tonnes of ore processed through the plant per year using radiometric sorting) resulting in potential U(3)O(8) production by 2012 in excess of 7.0 million pounds per year at assumed current grades.
Uranium One will continue to assess areas not yet classified as resources in the Dominion and Rietkuil Sections. Exploration is continuing in these unclassified areas of the Dominion and Rietkuil Sections with the objective of further increasing the Inferred resource base and identifying additional ore-shoots for conversion to Indicated resources.
In addition to the areas being explored at the Dominion and Rietkuil Sections, Uranium One has also been awarded prospecting rights over the westerly extension of the Dominion Reefs (discussed in further detail under Global Exploration Update section below). These prospecting rights consider a Dominion Reef strike extent of approximately 60 km, effectively resulting in more than a 400% increase in the strike length of the Dominion Reefs previously controlled by the Corporation. Within the current mining rights area at Dominion, comprising an approximate 10 km Dominion Reef strike, three ore-shoots have been identified and are classified as Indicated resources. Two of these form the resource base for the current Dominion declines (D1 and D2) and the third (Dominion North) forms part of the resource base for the Phase 3 and Phase 4 production planning. The modelling of these ore-shoots illustrates the significant potential of the newly acquired mineral rights area.
Honeymoon Uranium Project Update
The Honeymoon Uranium Project is an advanced in situ leach project located in South Australia and was approved by the Board of Directors of Uranium One on August 28, 2006 upon review of a feasibility study prepared by Mayfield Engineering, Aker Kvaerner and others.
Work is proceeding on installing the required infrastructure for the Honeymoon Uranium Project. Staff quarters to provide on-site accommodation for 50 employees have recently been delivered and installed along with transportable buildings to provide additional office space. The water treatment and sewerage plants have been ordered. Design work on the access road is under way. Specifications on the power supply are being prepared by ETSA Utilities, South Australia's electricity distributor and easements for the power line are being sought from the relevant land holders.
In addition to a mining lease, Uranium One holds a newly granted ten year uranium export licence which expires on December 31, 2016.
Bateman Engineering has been awarded the Engineering, Procurement and Construction Management (EPCM) Contract for the Honeymoon Uranium Project. Development of the project is proceeding according to schedule with production expected to commence in Q1 2008.
Update on U.S. Growth Strategy
Uranium One continues to pursue growth opportunities in the United States. On January 8, 2007 the Company announced that it had extended for a further three months the period of exclusivity with U.S. Energy to negotiate definitive terms for the acquisition of the Shootaring Canyon uranium mill in Utah and a portfolio of uranium property interests in Utah, Wyoming, Arizona and Colorado.
The United States comprises approximately one-quarter of global nuclear generating capacity, representing annual demand of over 50 million pounds U(3)O(8). Domestic production of U(3)O(8) is currently running at an annualized rate of 4 million pounds per year in the United States. Uranium One believes that a growing preference for reliance upon domestic sources of energy points to a need to develop domestic uranium resources within the United States.
To support our strategy of pursuing growth in the United States, as well as in other jurisdictions, Uranium One has created a new Projects and Integration Team comprising members of the DRUM project team. This new team will provide the necessary capacity to evaluate and progress acquisition targets as identified by the Company and will provide transitional technical expertise while full local operational teams are being assembled.
Aflease Gold Update
Uranium One's 71.4% owned subsidiary Aflease Gold Limited continues to develop its Modder East gold project located approximately 30 kilometres east of Johannesburg, South Africa. The portal of the decline was completed during the third quarter of 2006 and trackless decline development has initiated from the base of the portal excavation and advanced a total of 500 metres to date.
The Modder East gold project is expected to be completed on schedule, with the first gold pour expected in the third quarter of 2009. N M Rothschild & Sons has been appointed as exclusive financial advisor to Aflease Gold with respect to securing approximately R300 million (approximately US$41 million) in project finance to further fund development activities at Modder East.
Global Exploration Update
South Africa
The Company will continue to drill aggressively throughout 2007, with a focus on further increasing the confidence of the existing Inferred resource base to the Indicated category at the Dominion Uranium Project. This focus will aid Uranium One in completing the preliminary assessment of the potential to expand the Project to a production rate of approximately 7.0 million pounds of uranium oxide annually by 2012.
As discussed in the Company's press release dated January 17, 2007 Uranium One has been formally granted additional prospecting rights to the west of the Dominion Reefs Uranium Mine over an area of 57,565 hectares. Additional prospecting rights are currently pending, which would bring the total area of newly acquired ground to 74,380 hectares. Assuming the formal grant of prospecting rights currently pending, the newly acquired land package would represent approximately 60 kilometres of strike length of the Dominion Reefs, representing more than a 400% increase in the strike length previously controlled by the Company. A map showing the areas covered by the new prospecting rights is available on the Corporation's website at www.uranium1.com.
For 2007, Uranium One has planned a US$14.1 million exploration program in South Africa. This includes a 75,000 metre surface diamond drilling program, focused on the Dominion and Rietkuil Sections, with an overall objective of delineating the down-dip extensions of identified high grade zones as well as newly identified high grade ore-shoots. On the newly acquired prospecting rights, Uranium One is planning a program of airborne geophysics, surface mapping and surface exploration drilling, expected to commence during Q2 2007.
Australia
Uranium One has planned a 2007 exploration budget of US$3.4 million for Australia. The focus of the exploration program for 2007 will be geared towards further development of existing projects as well as generating additional targets for future evaluation.
At the Company's existing projects, the 2007 program will include a deep test drill hole at Karkarook during the first quarter, geophysical surveys on the Stuart Shelf and in the Honeymoon granite area, as well as an initial 15,000 metre rotary mud drill program at Goulds Dam.
Uranium One will also purchase a second PFN tool and will build a logging truck for a platform to run the new PFN tool by the middle of the year.
Canada
On January 11, 2007 Uranium One was notified by Pitchstone Exploration Ltd., that it had completed its requirements under a joint venture agreement between the two companies to earn a 50% interest in five projects in the eastern Athabasca Basin. Pitchstone is the operator of the joint venture and recently announced a C$5 million 2007 exploration programme that anticipates drilling 13,000 metres at the Darby-Candle, Waterfound and Moon Lake properties. An electromagnetic survey is also planned for the Darby-Candle and Lynx Lake properties to test for conductive basement formations.
Management Changes
Uranium One is also pleased to announce several changes to its management team. In order to create capacity for the development of acquired assets, a new Projects and Integration Team has been created. The Projects and Integration Team will be tasked with the investigation, approval and implementation of such projects as identified by the Company on a global basis.
Bruce Jones, formerly Executive Vice President, Africa and Europe, has been appointed to lead this team and now holds the title of Executive Vice President, Projects and Integration. Robert van Niekerk will now assume the role of Executive Vice President, Africa and Europe with primary focus on Dominion. Robert was previously Executive Vice President, Aflease Gold. Norman Schwab has been appointed Acting Chief Operating Officer at Aflease Gold. Norman previously held the position of Vice President, Mining and Projects at Aflease Gold.
Commenting on the Company's progress with its projects, Neal Froneman, Uranium One CEO said:
"I am pleased that Uranium One has delivered on all its targets thus far at Dominion, Honeymoon and at Aflease Gold. All key personnel are now focused on achieving a smooth transition from development to production at Dominion. We are focused on maximizing value for our shareholders by working to expand production at Dominion expeditiously to approximately 7.0 million pounds U(3)O(8) per annum by 2012. We look forward to completing our preliminary assessment of the potential expansion to demonstrate to the market the tremendous organic growth potential within our company."
About sxr Uranium One
sxr Uranium One Inc. is a Canadian uranium and gold resource company with a primary listing on the Toronto Stock Exchange and a secondary listing on the JSE Limited (the Johannesburg stock exchange). The Corporation owns the Dominion Uranium Project in South Africa and the Honeymoon Uranium Project in South Australia, and is actively pursuing growth opportunities in the uranium sector in the United States. The Corporation holds an approximate 71.4% interest in Aflease Gold Limited, which owns the Modder East Gold Project in South Africa. Through a 50/50 joint venture with Pitchstone Exploration Ltd., the Corporation is also engaged in uranium exploration activities in the Athabasca Basin of Saskatchewan.
Cautionary Statement
No stock exchange, securities commission or other regulatory authority
has approved or disapproved the information contained herein.
This News Release includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian legislation. All statements other than statements of historical fact included in this release including, without limitation, statements regarding potential mineralization, reserves, resources, estimates of future mining, recovery, production rates and operating costs, and future plans and objectives of Uranium One, are forward-looking statements (or forward-looking information) that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors could cause actual results to differ materially from Uranium One's expectations. Such factors include, among others, the actual results of exploration activities, actual results of reclamation activities, the estimation or realization of mineral reserves and resources, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, availability of capital required to place Uranium One's properties into production, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, future prices of commodities, possible variations in ore grade or recovery rates, failure of plant, equipment or processes to operate as anticipated, accidents, labour disputes and other risks of the mining industry, delays in obtaining governmental approvals, permits or financing or in the completion of development or construction activities, Uranium One's hedging practices, currency fluctuations, title disputes or claims limitations on insurance coverage, as well as those factors discussed under "Risk Factors" in Uranium One's Annual Information Form and Management's Discussion and Analysis as filed with securities regulatory authorities in Canada. Although Uranium One has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended.
There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Uranium One does not undertake to update any forward-looking statements that are included herein, except in accordance with applicable securities laws.
In addition, this news release uses the terms "indicated resources" and "inferred resources" as defined in accordance with the SAMREC Code (South African Code for Reporting of Mineral Resources and Mineral Reserves prepared by the South African Mineral Resource Committee) ("SAMREC") under the auspices of the South African Institute of Mining and Metallurgy effective March 2000 or as amended from time to time. A mineral resource is a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the earth's crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge. A measured mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes that are spaced closely enough to confirm both geological and grade continuity. An indicated mineral resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes that are spaced closely enough for geological and grade continuity to be reasonably assumed. An inferred mineral resource is that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited exploration and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes. Mineral resources which are not mineral reserves do not have demonstrated economic viability.
The indicated and inferred resource estimates provided herein in accordance with SAMREC will be reconciled to the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Mineral Reserves, adopted by CIM Council on August 20, 2000, as may be amended from time to time by the CIM, in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects, ("NI 43-101") in the independent technical report being prepared by SRK for filing in accordance with the requirements of NI 43-101.
Investors are cautioned not to assume that all or any part of the mineral deposits in the Measured and Indicated resource categories will ever be converted into reserves. In addition, "Inferred resources" have a great amount of uncertainty as to their existence and economic and legal feasibility. It cannot be assumed that all or any part of an Inferred mineral resource will ever be upgraded to a higher category. Under South African rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies or economic studies except under conditions noted in SAMREC. Under Canadian rules, estimates of Inferred mineral resources may not form the basis of feasibility or pre-feasibility studies or economic studies except for preliminary assessments as defined under NI 43-101. Investors are cautioned not to assume that all or any part of an Inferred resource exists or is economically or legally mineable.
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