Gold Wheaton Buys Second First Uranium Gold Stream

VANCOUVER — Having purchased a gold stream from First Uranium’s (FIU-T, FIU-J) Mine Waste Solutions (MWS) project, Gold Wheaton Gold(GLW-V, GLWGF-O) is adding another from its Ezulwini underground gold mine. The projects are respectively about 160 km and 40 km southwest of Johannesburg, South Africa.

The companies have signed a definitive agreement that will see Gold Wheaton receive 7% of Ezulwini’s life-of-mine gold. To get it, Gold Wheaton will make an upfront payment to First Uranium of US$50 million and then pay US$400 per oz. gold, or the spot price of gold if it dips below that mark.

Four years down the road, the US$400 price will increase by 1%, in part, to account for inflation. The pricing terms match those agreed to in December 2008 for Gold Wheaton’s purchase of 25% of the life-of-mine gold from First Uranium’s MWS project. Gold Wheaton paid US$125 million to secure the right to that gold stream.

The Ezulwini agreement guarantees Gold Wheaton 16,500 oz. gold in 2010 and 19,600 oz. gold in 2011. Thereafter, Gold Wheaton expects to buy about 26,000 oz. gold a year. During this year’s second quarter, Gold Wheaton bought 6,954 oz. gold from the MWS project.

As outlined in a 2009 scoping study, First Uranium expects the Ezulwini mine to produce about 352,000 oz. gold and 1.1 million lbs. U₃0₈ a year over a 17-year mine life at a cash cost of US$418 per oz. gold.

The study was based on an indicated resource of 14 million tonnes grading 6.14 grams gold per tonne, of which 4.4 million tonnes graded 5.36 grams gold and 0.074% U₃0₈. The project has a substantially larger inferred resource.

In addition to the new gold stream with First Uranium, Gold Wheaton, which has about 1.4 billion outstanding shares, announced a 10-to-1 share consolidation, subject to shareholder approval.

Beyond its First Uranium gold streams, Gold Wheaton also has a gold streaming agreement with FNX Mining (FNX-T, FNXMF-O).

On news of the deal, Gold Wheaton shares gained 1¢ to 29¢. First Uranium shares rose 3¢ to $2.78. First Uranium has around 166.8 million shares outstanding.