[miningmx.com] — FIRST Uranium (FIU) shares lost almost 15% during the JSE’s final half-hour’s trade on Friday, following an announcement that subsidiary Mine Waste Solutions’ mining right has been “withdrawn’.
Following the announcement at 16:30, FIU closed down 14.97% at R2.50 when trading closed at 17:00.
“The notice received (from the Department of Mineral Resources) is fatally defective and correspondence to this effect has been sent to the Minister,’ read the announcement.
“We have been consistently advised by our.Counsel, and maintain the opinion, that under current South African legislation, reclamation activities such as MWS are not classified as a mining project and therefore do not require a mining right.
“The MPRDA does not make provision for the “withdrawal’ of a mining right. (It) does make provision for.other actions in relation to mining rights provided due process is followed.’
First Uranium said it would take legal action to uphold its rights, if necessary.
It was not the first time this year that Mine Waste Solutions had a run in with authorities. In July, it was closed down by the National Nuclear Regulator for a week due to “spillages and leakages of tailings materials along the pipeline and also on the properties of livestock farmers’.
Analysts at RBC Capital Markets on Thursday, prior to the MWS notice, revised their target price for First Uranium’s Toronto-listed shares downward (from 60c to 50c), saying a fatality and subsequent closure of Ezulwini earlier this week casted doubt about the mine’s ability to deliver on current targets.
“This in turn increased the financial risk and the likelihood of having to do yet another equity raising,’ said the analysts.
In a separate announcement on Friday, First Uranium said operations at Ezulwini have resumed.
