[miningmx.com] — FIRST Uranium said on Wednesday the week-long outage of its surface operations at Mine Waste Solutions (MWS) would not affect the outcome of the Gold Wheaton/Franco Nevada completion test.
South Africa’s National Nuclear Regulator (NNR) earlier this week conditionally lifted the suspension directive – issued July 25 – on MWS.
According to the Gold Wheaton completion test, a make or break issue for First Uranium, the MWS gold plant has to reach steady-state production and satisfy certain key criteria prior to September 1 this year.
The plant must achieve a period of consistent production over three consecutive months during which the tonnage processed exceeds 1,643,000 tonnes of tailings per month – a total which represents 85% of steady state production of 1,933,000 tonnes per month.
The plant must also meet certain grade and recovery criteria for 14 consecutive days within a 90-day period.
If the completion test was not achieved by the September deadline, the company would be liable to pay interest of $1.5m per month until December. If the target was still not met by that time, MWS would incur a penalty of $30m.
The test relates to an earlier deal in which Gold Wheaton had provided $175m upfront to First Uranium in return for the right to purchase gold from the company on favourable terms over the life of the operations.
Gold Wheaton agreed to modified terms in June last year as part of a financial package to keep First Uranium going. It accepted 14 million shares in First Uranium, along with a commitment to complete the third gold plant module at MWS and meet the technical completion tests before the September deadline.
Franco-Nevada recently took over the agreement as part of its acquisition of Gold Wheaton.
In a terse response to a question by Miningmx over whether the production interruption would jeopardize meeting the test, a company spokesperson said “First Uranium can continue to deliver into the completion of the test; on schedule’.
CONDITIONAL LIFTING
The NNR said last week MWS was issued the directive due to “spillages and leakages of tailings materials along the pipeline and also on the properties of livestock farmers”.
It ordered MWS to stop depositing slimes materials on existing tailings stories facilities, and ensure pipelines were maintained, NNR CEO Boyce Mkhize said.
“Following a site inspection on July 29, the regulator agreed to lift the suspension on condition that MWS adhered strictly to the conditions of nuclear authorisation.inter alia that MWS provide the NNR with monthly self inspection reports in accordance with the enhanced pipeline maintenance program that the company had developed and has implemented,’ read Wednesday’s statement.
“The NNRD will review MWS’ compliance after a period of one month to satisfy itself that the operation is complying with the conditions imposed on the lifting of the directive.’
First Uranium’s JSE-listed shares traded up 18.38%, at R3.80, on Wednesday following the announcement.
