Capital costs for First Uranium‘s (FIU-T) Buffelsfontein gold-uranium tailings recovery project in South Africa have increased 76% to US$260 million from estimations in a preliminary assessment released last May.
On the upside, annual uranium production is expected to be 36% higher at 20 million lbs. U3O8.
A prefeasibility study released today says the company will start construction to expand its existing gold plant as well as the initial modules for a new uranium plant immediately. Commissioning for the uranium plant is expected next November and while the gold plant expansion should be ready for November 2009.
Gold production is projected to be a just 2% lower at 126,000 oz. per year. The company began producing gold last June at 500,000 tonnes of tailings per month but the company plans to increase that to 633,000 tonnes with the expansion.
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 U$737 per oz. for March 2009 to US$635 per oz. beyond March 2012.
The uranium price being used has increased to US$104 per lb. for March 2009 but drops to US$45 per lb. by 2012, compared to US$50 for the four-year span used before.
The mine life will stay the same at 16 years but cash costs for 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.
The company’s share price fell 7% in Toronto today, or about 72 to $9.57 per share on a trading volume of 390,000 shares.
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